2013 Analyst Conference

Transcription

1 2013 Analyst Conference May 23, 2013 New York City

2 Information Regarding Forward-Looking Statements This presentation contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements can be identified by words like believes, expects, anticipates, intends, plans, forecasts, estimates, may, will, would, could, should, potential, target, outlook, project, maintian, depends, pursue 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. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions and the timing of actions by the California Public Utilities Commission, California State Legislature, Federal Energy Regulatory Commission, U.S. Department of Energy, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries in which we operate; capital markets conditions, including the availability of credit and the liquidity of our investments; inflation, interest and exchange rates; the impact of benchmark interest rates, generally Moody s A- rated utility bond yields, on our California Utilities cost of capital; the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of granting of, permits, licenses, certificates and other authorizations; energy markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures; weather conditions, natural disasters, catastrophic accidents, and conservation efforts; risks inherent in nuclear power generation and radioactive materials storage, including the catastrophic release of such materials, the disallowance of the recovery of the investment in or operating costs of the generation facility due to an extended outage, and increased regulatory oversight; risks posed by decisions and actions of third parties who control the operations of investments in which we do not have a controlling interest; wars, terrorist attacks and cybersecurity threats; business, regulatory, environmental and legal decisions and requirements; expropriation of assets by foreign governments and title and other property disputes; the impact on reliability of SDG&E s electric transmission and distribution system due to increased power supply from renewable energy sources; the impact on competitive customer rates of the growth in distributed and local power generation and the corresponding decrease in demand for power delivered through our electric transmission and distribution system; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond our control. Additional information concerning factors that could cause actual results to differ materially from these forward looking-statements are further discussed in the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system free-ofcharge on the SEC s website, and on the company s website at We caution you not to rely unduly on any forward-looking statement. These forward-looking statements speak only as of May 23, 2013, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or other factors.

3 Strategy & Priorities Debbie Reed Chairman & Chief Executive Officer Analyst Conference May 23, 2013

4 Conference Outline Strategy & Priorities Debbie Reed Chairman & CEO, Sempra Energy California Utilities Anne Smith Jessie Knight, Jr. CEO, SoCalGas CEO, SDG&E International Utilities & Energy Infrastructure Mark Snell President, Sempra Energy Sempra U.S. Gas & Power Sempra International Jeff Martin George Liparidis President & CEO, Sempra U.S. Gas & Power President & CEO, Sempra International Financial Joe Householder Executive VP & CFO, Sempra Energy 2

5 Organizational Structure California Utilities U.S. Gas & Power International Southern California Gas San Diego Gas & Electric Sempra U.S. Gas & Power Sempra International Sempra Renewables Sempra Natural Gas Sempra South American Utilities Sempra Mexico 3

6 Excellence in Operations and Safety Continued in 2012 Listed on Dow Jones Sustainability Index and Carbon Disclosure Leadership Index Ranked on lists of 100 Best Corporate Citizens (1) and World s Most Ethical Companies (2) Best in the West for electric reliability (3) for the 7th year in a row ServiceOne Customer Service Award (3) Highest Residential Natural Gas Customer Satisfaction (4) for the 2nd year in a row Award of Excellence in Safety (5) for the 10th year in a row (1) Corporate Responsibility Magazine (2) Ethisphere Institute (3) PA Consulting Group (4) J.D. Power & Associates, as among large utilities in Western U.S. (5) Mapfre 4

7 Delivering Superior Shareholder Return 1-Year Total Return 34% 10-Year Total Return 305% 16% 170% 99% 1% Sempra S&P 500 Utilities Index S&P 500 Sempra S&P 500 Utilities Index S&P 500 Source: Bloomberg Note: 10-year total return from 12/31/02 through 12/31/12 1-year total return from 12/30/11 through 12/31/12 5

8 SoCalGas and SDG&E Goals/Initiatives Accomplishments Combined California utility earnings growth of 8% in 2012 Organic growth through execution of major investments Pipeline Safety Enhancement Plan (PSEP) SoCalGas advanced metering infrastructure Electric transmission and renewables California utility rate base grew by 18% in 2012 Final decision in our General Rate Case Pipeline safety memorandum account authorized Cost of capital proceeding finalized Launched SoCalGas AMI project Sunrise Powerlink put into service ahead of schedule 6

9 South American Utilities and Mexican Midstream Goals/Initiatives Accomplishments Increase local ownership and optimize the capital structure of our international investments Issued over $400 million of local debt in Mexico IPO of IEnova (1) generated net proceeds of about $575 million Consider midstream growth opportunities in Mexico, including through the Pemex JV Consider organic and adjacent growth opportunities in Chile and Peru Announced plans to build $1 billion Sonora pipeline in Mexico $865 million of opportunities through Pemex JV Began construction of ethane pipeline Announced plans to build 1 st phase of Los Ramones natural gas pipeline Santa Teresa hydro project in Peru on-track to be completed next year Awarded $150 million transmission projects in Chile through JV with SAESA (1) Formerly Sempra México, S.A de C.V. 7

10 U.S. Gas Midstream Goals/Initiatives Develop liquefaction joint venture to enhance returns from existing Cameron assets and limit our incremental investment Accomplishments Signed definitive tolling and joint venture agreements with Mitsubishi, Mitsui and GDF SUEZ for LNG export facility (1) Received DOE FTA permit in 2012; non- FTA and FERC permits expected early next year First and only liquefaction development project to receive notice of schedule for FERC environmental review Reduce capital allocation for additional storage development beyond 43 Bcf until market conditions improve Will complete 43 Bcf build-out in 2014 with minimal incremental capital (1) These agreements are subject to a final investment decision to proceed by each party, finalization of permit authorizations, securing financing and other customary conditions. 8

11 Renewables and Gas Generation Goals/Initiatives Accomplishments Renewables Grow and diversify portfolio using 50/50 partnerships Completed construction of 5 renewable projects totaling ~500 MW over the last 12 months Signed power purchase agreement for 250 MW Copper Mountain Solar 3 Announced sale of 50% of Copper Mountain Solar 2 and Mesquite Solar 1 Gas Generation Contract capacity of remaining plants to enhance value Sold 50% stake in Mesquite power plant for ~$600 / kw Contracted ~50% of remaining capacity at Mesquite for 25 years 9

12 Updates to Market Assessment Trend Natural gas renaissance Utility Investment Latin America Green Initiatives Change from 2012 Implications U.S. has 100+ year supply of natural gas, providing support for export of LNG Increasing supply and low prices will drive new sources of commercial and transportation demand that require infrastructure and services EPA regulation will cause retirement of older and less efficient coal plants, creating opportunities for natural gas U.S. utilities expected to invest nearly $1 trillion over the next decade to replace and upgrade energy infrastructure, improve disaster preparedness, reduce emissions and transition to smart technologies 2012 GDP growth: Mexico 3.9%; Peru 6.3%; Chile 5.5% Energy demand growth of 5% 6% and customer growth of 2.5% 3.5% annually in South America Renewables share of U.S. power demand set to triple between 2011 and 2040 Renewed focus on climate change in Washington Sources: EEI, EIA, Latin Focus Consensus Forecast 10

13 Key Future Priorities Continue focus on top-quartile growth Maintain balance sheet strength Emphasize superior capital allocation Sequence decisions to maximize value Grow combined CA utility rate base at CAGR of 7% 9% Complete major infrastructure projects on schedule Execute on additional tangible growth projects in all businesses Maintain strong credit ratings across all businesses Further optimize capital structure through additional subsidiary debt and equity issuances, including possible MLP Deploy capital in areas of strategic focus that exceed hurdle rates Discipline driven by growth opportunities in excess of capital available to deploy Execute on opportunities in an order that creates the greatest shareholder value Beginning construction on Cameron liquefaction is top priority 11

14 Long-Term Adjusted EPS Growth Outlook $4.30 to $4.60 EPS guidance excluding 2012 Retroactive GRC Adjustment 2012 Retroactive GRC Adjustment Development opportunities not yet in plan Cameron Liquefaction $4.00 to $4.30 California Utilities Reliability, Innovation, and Operational Excellence Base Capital Pipeline Safety Enhancement Phase 1A Advanced Meters ECO Substation South Bay Relocation South Orange County Cleveland National Forest Aliso Canyon $14.5 billion capital program in the plan: Latin America Natural Gas Emphasis in Mexico; Emerging Markets Sonora Pipelines Los Ramones Pipeline (1) Ethane Pipeline (1) ESJ Wind Project Phase I (1) Guadalajara Propane Terminal (1) Santa Teresa Hydro I Chilean JV Transmission Projects (1) U.S. Gas Midstream Shale Gas Revolution Cameron Liquefaction (1) Storage Expansion Cameron Pipeline U.S. Renewables Industry Leading Development Copper Mountain Solar 3 Rosamond Solar 1 $5.10 to $ Expect adjusted earnings per share growth of 6% 8% (2) from $4.00 to $4.30, based upon current 5-year $14.5 billion capital program (2) (1) Capital to be funded by JV entities not included in the $14.5 billion (2) CAGR is calculated from the 2013 Adjusted EPS Range adjusted EPS of $4.00-$4.30 excludes $0.30 reflected in 2013 guidance for the California Utilities General Rate Case related to the 2012 retroactive adjustment. The $0.30 EPS is the midpoint of the estimated range of $70-$80mm for the 2012 retroactive adjustment. 12

15 Long-Term Adjusted EPS Growth Outlook $4.30 to $4.60 $4.00 to $4.30 EPS guidance excluding 2012 Retroactive GRC Adjustment 2012 Retroactive GRC Adjustment Development opportunities not yet in plan Cameron Liquefaction California Utilities Reliability, Innovation, and Operational Excellence Gas System Expansion Additional Renewables Development Smart Grid Full Deployment EPS Beyond 2017: Additional Pipeline Safety Enhancement Phases Development opportunities not yet in plan: Latin America Natural Gas Emphasis in Mexico; Emerging Markets Los Ramones Phase II Expand ESJ Wind Project Santa Teresa Hydro II Additional Electric Transmission in Chile Further PEMEX JV Growth Greenfield Power Generation EPS Beyond 2017: ECA Liquefaction U.S. Gas Midstream Shale Gas Revolution Additional Storage Build Outs including LA Storage Pipeline Laterals LNG Fuels Market Entry Acquire Adjacent Gas Distribution New Pipelines EPS Beyond 2017: 4 th Train of Cameron U.S. Renewables Industry Leading Development Additional Solar using Existing Land Positions Additional Opportunities Related to State RPS Mandates Additional growth could be achieved through development projects not yet in the plan Cameron expected to provide robust long-term growth with first full year of full capacity in 2019 $5.10 to $5.60 (2) (1) CAGR is calculated from the 2013 Adjusted EPS Range adjusted EPS of $4.00-$4.30 excludes $0.30 reflected in 2013 guidance for the California Utilities General Rate Case related to the 2012 retroactive adjustment. The $0.30 EPS is the midpoint of the estimated range of $70- $80mm for the 2012 retroactive adjustment. (2) Note that the 2019 earnings per share projection holds 2017 projection flat for two years while increasing expected growth only for Cameron Liquefaction 13

16 Southern California Gas Company Anne Smith Chief Executive Officer Analyst Conference May 23, 2013

17 Outline Business Overview 2012 Accomplishments SoCalGas Capital Plan General Rate Case Update Major Projects Pending Regulatory Approval Advanced Meter Update Rate Base Outlook Customer Bill Impacts Summary 2

18 Business Overview Nation s largest natural gas distribution utility 21.1 million consumers 5.8 million gas meters In business for 140 years 20,000 square miles of service territory 12 counties served 500+ communities served 136 Bcf of gas storage capacity (3% of national storage capacity) Approximately 3,750 miles of transmission pipeline Approximately 100,000 miles of distribution pipeline Rate base of $3.2 billion in 2012 (1) (1) 2012 weighted average 3

19 2012 Accomplishments Customers Customer satisfaction ranked highest among western U.S. utilities by residential customers (in 2012) and business customers (in 2013) (1) Gas procurement costs are some of the lowest in the nation Residential bills are lowest in the state and half of the national average Operational excellence Continued to operate system safely, reliably and efficiently Investments in employee safety resulted in record low number of injuries in 2012 Shareholders Delivered $289 million in earnings Received constructive outcome in Cost of Capital proceeding (1) J.D. Power & Associates 4

20 SoCalGas Capital Plan: $5.9 Billion Base business Storage Fields 4% Other Programs 2% Infrastructure replacement, system integrity, new business, information technology Pipeline Safety Enhancement Plan (PSEP) Pipeline Safety Enhancement Plan 28% Base Business Funded Through GRC 53% Replacement and testing of transmission lines and installation of additional control valves Advanced meters Storage enhancements Advanced Meters 13% Improve storage field operating performance Development projects incremental to financial plan include gas system expansion, and PSEP beyond

21 2012 General Rate Case (GRC) Update GRC funds the majority of our operating costs Excludes energy efficiency programs, incentive mechanisms, and major projects such as Advanced Meters, Pipeline Safety Enhancement Program, and storage projects Final Decision was issued on May 9, 2013 Revenue requirement increase of $115 million (6%) to $1.96 billion for 2012 Rate base of $3.4 billion escalation rates of 2.65%, 2.75% and 2.75% Z-factor mechanism for exogenous cost increases retained Two-way balancing for environmental costs, mandated pipeline integrity programs, and pension and retiree healthcare costs; One-way balancing for RD&D (1) expenses Next GRC will be for 2016 test year Impact of retroactive 2012 and 2013 revenues will be recognized in Q2-13 (1) Research, Development and Demonstration 6

22 Pipeline Safety Enhancement Plan CPUC-mandated plan Test or replace transmission pipelines that have not been pressure tested to modern standards Add more remote and automatic shut-off valves Enhance the integrity of the system Covers work on approximately 3,750 miles of transmission pipeline for SoCalGas and 250 miles for SDG&E 7

23 Pipeline Safety Enhancement Plan (Continued) Phase 1A & 1B Phase 1A Primarily test/replace untested pipe in populated areas; automate 200 valves Phase 1B automate 300 valves; replace pre-1946 pipe; SDG&E Line 1600 Phase 2 Phase 2 Primarily test/replace untested pipe in non-populated areas and pipe not tested to modern standards Phase 1 Filing 8/26 Project Plan (SoCalGas and SDG&E): Phase 1A up to $1.7 billion (as filed): CPUC approval expected Q2-13 Phase 1B $1.4 billion (estimated): filing to be made in a future proceeding Phase 2 $1.5 - $3 billion (estimated): filing to be made in a future proceeding CPUC approved interim funding of $78 million for SoCalGas and $10 million for SDG&E until Phase 1A decision is issued 8

24 Aliso Canyon Compressor Replacement $200 million capital project Project benefits Replaces obsolete gas turbine driven compressors Increases efficiency of operations Increases injection capacity by 35% CPUC decision expected by YE-13 Project to be completed in

25 Advanced Meter Infrastructure Update Approved by CPUC in 2010; project completion in 2017 $875 million capital project to upgrade approximately 6 million gas meters Launched deployment in 2012 with 22,000 modules Expect to have over 900,000 modules installed by YE-13 Enhances operating efficiencies and service to customers, and lowers cost to customers in the long run 10

26 SoCalGas Rate Base & CWIP Growth Outlook ($ billions) Consistent with authorized rate of return and capital structure (see appendix) $3.7 $4.1 - $4.3 $6.2 - $6.6 Flat incentive earnings 2013 Outlook 2014 Outlook 2017 Outlook Rate Base CWIP (1) Compound Annual Growth Rate from based on midpoint of range. Values shown in chart are rate base which does not include construction work-in-progress (CWIP). 11

27 Estimated Customer Bill Impact $51 Average Residential Monthly Bill $50 Commodity Delivery $ Average monthly residential bill in 2017 is expected to be comparable to the bill from 2008 Commodity costs have declined, but are forecast to increase at an 8% annual rate over the period Delivery costs are expected to increase at a 4% annual rate over this same period Note: Nominal dollars 12

28 Summary Largest capital investment program in history Major capital projects either approved or pending approval Capital expenditures funded by operating cash flow and debt financing Strong credit ratings and company reputation Stable rates and bills Robust earnings growth from rate base investments Upside potential from incremental opportunities not in current plan 13

29 Appendix 5/23/13

30 Current CPUC Capital Structure / Authorized Return Authorized Capital Structure Authorized Return Weighted Return Long-term debt 45.6% 5.77% 2.63% Preferred equity 2.4% 6.0% 0.14% Common equity 52.0% 10.1% 5.25% Rate of return 8.02% Cost of capital term: Cost of capital adjustment mechanism uses a benchmark based on a 10-year utility bond index with a +/- 100 basis point trigger 15

31 San Diego Gas & Electric Jessie Knight, Jr. Chief Executive Officer Analyst Conference May 23, 2013

32 Outline Business Overview 2012 Accomplishments Strategic Overview Key Regulatory Proceedings San Onofre Nuclear Generating Station Capital Investments Electric Transmission Projects Innovation and Renewables Updates Customer Bill and Rate Impacts Summary 2

33 Business Overview 4,100 square miles of service territory in San Diego and southern Orange counties Serving 3.4 million electric and gas consumers Rate base of $7 billion (1) CPUC: 62% FERC: 38% Additional $800 million of construction work in progress (1) Period ending rate base as of 12/31/12; 13-month weighted average rate base of $6.3 billion as of 12/31/12 3

34 2012 Accomplishments Customer value Energized Sunrise Powerlink Transmission Line CPUC approved ECO Substation Project Advanced green footprint Delivered 20% of energy from renewables and secured path to 33% goal by 2020 Best in the West in electric reliability (1) Outstanding results in safety and customer service Shareholder value Earnings of $484 million; 12% increase over 2011 Capital expenditures of $1.2 billion aligned with state energy policies Strong cash flow from operations (1) For the seventh year in a row by PA Consulting Group 4

35 Strategic Overview Integrating core strengths with innovation to deliver customer value Operational Excellence Customer Innovation Core Values Safety Reliability Customer service Deploying New Technology Customer connectivity Environmental enhancement Proven Project Execution Sunrise Smart Meter Growth Opportunities Renewables integration System resiliency Customer Value Cost reductions Equitable rate structure Sustainable energy future Earnings Growth 5

36 Key Regulatory Proceedings General Rate Case - Final Decision issued May 9, 2013 Provides funding for enhancing system safety and reliability, fire protection and insurance, and deploying new technology Results in revenue requirement of $1.73 billion for 2012 Increase of 7% over 2011 authorized revenue requirement Increases to base margin of 2.65% to 2.75% for Authorizes rate base of $4.07 billion (95% of our request) Financial impact on both 2012 and YTD 2013 will be recognized in Q2-13 CPUC Cost of Capital: Effective January 1, 2013 Authorized 10.3% ROE and 52% common equity ratio FERC Cost of Capital: Effective September 1, % ROE requested 6

37 San Onofre Nuclear Generating Station (SONGS) 20% Share Southern California Edison filed Unit 2 re-start plan with Nuclear Regulatory Commission Decision expected Q2-13 for potential re-start Ongoing evaluation of Unit 3 CPUC initiated proceeding to address cost recovery Phase 1 decision addressing 2012 costs expected in Q4-13 ($ in Millions) Net Book Investment (1) 2012 Rate Base Earnings (2) Unit 2 $274 $10 Unit 3 $238 $9 Replacement power costs of $107 million from January 1, 2012 through March 31, 2013 (1) Total fixed assets (plant in service, work in progress, and nuclear fuel) net of accumulated depreciation as of 12/31/12 (2) Net earnings excluding AFUDC equity 7

38 Capital Investment Plan: Plan: $5.7 billion CPUC Other PSEP (1) 7% CPUC Base Technology (2) 9% Renewables 7% Electric and Natural Gas Distribution 34% Rate Base (in millions) $7,300 $7,700 $8,900 Substations 15% Electric Generation 6% FERC FERC Base 22% (1) Pipeline Safety Enhancement Plan (2) Technology capital investments include both CPUC and FERC jurisdictions 8

39 Electric Transmission Investments $1.1 billion (1) capital investment in FERC infrastructure to increase reliability and access to renewable energy Project CPUC Approval Status In Service Description ECO Approved 2014 South Bay Relocation Q South Orange County 2H (Phases) New substation providing access to renewable energy Replace/upgrade aging substation Replace/upgrade electric system and substations Cleveland National Forest Electric system hardening (1) Total project costs (excluding AFUDC) incurred within the plan period 9

40 Customer and Environmental Innovation Driving customer value Investments in new technology reduce costs and increase options for customers Trusted energy advisor Enhancing customer experience Energy management tools Smart meters Time variant rates Environmental solutions Integrated grid enables renewables growth Leader in solar PV and electric vehicle market development 10

41 Renewables Portfolio Management On track to meet state renewables goals (33% by 2020) Lowest cost provider of renewable energy among California utilities Optimizing value for structure of new and existing contracts Innovative investments to lower costs of renewable procurement Utility tax equity investment reduces cost of purchase power agreement Approved financial structure can be used for future renewables investments 11

42 $/Month Cents/kWh 5/23/13 Estimated Electric Bill and Rate Impacts Average Residential Bill (1) System Average Rates $125 National Average (2) SDG&E 25 National Average (2) SDG&E $100 $107 $94 $ $75 $ $50 10 $25 5 $ (3) (3) (1) Average bill assumes 500 kwh usage by a typical residential customer (2) Reflects national average rates and bills in 2011 per U.S. Energy Information Administration (3) Reflects anticipated rate change in Q3-13 to include GRC implementation 12

43 Cents/kWh 5/23/13 Tiers and Rate Impacts - Residential Four Tier Structure Impact to Customers < 300 kwh 400 kwh 500 kwh > 600 kwh Tier 1 Tier 2 Tier 3 Tier Allocation of Customers Tiers 1 & 2 72% Tier 3 17% Tier 4 11% 28% Tier 1 Tier 2 Tier 3 Tier 4 13

44 Summary Proven track record of operational excellence Superior safety and reliability Execution and delivery of major projects Increasing access to renewable energy Innovation driving customer value Deployment of technology enhances services and reduces costs Cost-effective renewables portfolio management Customer solutions and equitable rate structure Continued financial strength Predictable earnings growth Customer-focused investments aligned with state policies 14

45 Appendix 5/23/13

46 Financial Plan Drivers Anticipated capital investment ( ) FERC: $2.2 billion CPUC: $3.5 billion Anticipated rate base growth ( CAGR) FERC: 9% CPUC: 3% Current authorized return on equity FERC: 11.35% (1) CPUC: 10.30% Effective income tax rates range from 28% to 32% Capital program funded with operating cash flows and debt financing (1) Current FERC ROE requesting new ROE of 11.3% effective 9/1/13 16

47 Current Capital Structure/Authorized Return Authorized Capital Structure Authorized Return CPUC Long-Term Debt 45.25% 5.00% CPUC Preferred Equity 2.75% 6.22% Common Equity CPUC FERC 52.00% 10.30% 11.35% (1) (1) Current FERC ROE requesting new ROE of 11.3% effective 9/1/13 17

48 Current CPUC Composition Commissioner Last Appointed Term Expires Mark Ferron 2011 December 2014 Mike Florio 2011 December 2016 Mike Peevey 2008 December 2014 Carla Peterman (1) 2013 December 2018 Catherine Sandoval 2011 December 2016 (1) Appointed by the governor in January 2013 senate confirmation required in early

49 International Utilities & Energy Infrastructure Mark Snell President Analyst Conference May 23, 2013

50 Overview Sempra International Sempra U.S. Gas & Power Sempra South American Utilities Sempra Mexico Sempra Renewables Sempra Natural Gas Strong operating history Chile and Peru 14 years Optimize value of existing natural gas assets Mexico 20+ years LNG export facility opportunity Successful IPO on IEnova Continue progress on Cameron liquefaction export facility Expand strategic natural gas infrastructure for possible MLP 2

51 LNG Asset Overview Energía Costa Azul 1.0 Bcf/d of import capacity 1 berth accommodating up to Q-Max size ships (~5.7 Bcf) 2 x 160,000 m 3 LNG storage (~7 Bcf) total Fully contracted until 2028 Cameron LNG 1.5 Bcf/d of import capacity 2 berths accommodating up to Q-Flex size ships (~4.7 Bcf) 3 x 160,000 m 3 LNG storage (~10 Bcf) total Partially contracted with ENI 3

52 Bcf/d 5/23/13 Competition for Global LNG Demand Existing liquefaction satisfies global LNG demand through 2018 (1) Less than 50% of possible LNG projects are contracted to meet global demand through Speculative Probable Under Construction 60 Operating LNG Demand 40 Capacity (2) Includes Cameron LNG Source: Wood Mackenzie (1) Includes facilities under construction (2) Includes operating facilities, projects under construction and probable and speculative projects that have signed contracts (SPAs, HOAs, MOUs, etc.) 4

53 Marginal Cost of U.S. Gas Supply Still Falling Source: Bloomberg, EIA Annual Energy Outlook 5

54 Bcf/d 5/23/13 Incremental Natural Gas Demand ( ) Our customers are well positioned to meet LNG demand (1) Incremental gross LNG imports Net indigenous & pipe imports (5) China North America Middle East Asia Pacific ex. China Europe Africa Latin America Former Soviet Union Source: Wood Mackenzie (1) Net of intra-regional LNG trade 6

55 U.S. Liquefaction Projects Brownfield Projects (Owners) DOE / FERC filed capacity (Bcf/d) (1) Order of DOE non- FTA application FERC prefiling prior to 12/5/12 Filed FERC application FERC Notice of Schedule Fully subscribed (2) No additional marine & storage facilities Sabine Pass I (Cheniere) 2.2 / 2.2 Freeport Phase I (Smith/ConocoPhillips) Japanese customers 1.4 / 1.8 Lake Charles (Energy Transfer/BG) 2.0 / Cove Point (Dominion) 1.0 / Freeport Phase II (N/A) 1.4 / NA 3 Cameron (Sempra) 1.7 / Elba Island (Kinder Morgan) 0.5 / Gulf LNG (Kinder/GE/Others) 1.5 / Golden Pass (ExxonMobil/Qatar) 2.0 / NA 14 Greenfield Jordan Cove (Veresen/Energy Projects) 0.8 / Oregon (LNG Development) 1.3 / Corpus Christi (Cheniere) 2.1 / Lavaca Bay (Excelerate) 1.3 / Gulf Coast (Smith/Trusts) 2.8 / NA 10 (1) ~140 million cubic feet per day is equivalent to 1 million tonne per annum (2) Based on DOE filed capacity. 7

56 Cameron Liquefaction Project New Build Facilities 8

57 Commercial Update Joint venture and tolling agreements Definitive agreements signed earlier this month (1) Opportunity for expansion with a fourth train Sempra retains 50.2% of the equity Tolling capacity agreements 20-year agreements Competitive pricing relative to other LNG export projects Customers assume commodity risk and provide feed gas Reimbursement of O&M costs provides inflation protection EPC contract Invitation to bid issued in January based on FEED Two construction consortiums currently bidding (1) These agreements are subject to a final investment decision to proceed by each party, finalization of permit authorizations, securing financing and other customary conditions. 9

58 Project Structure Joint Venture Owners Tolling Customers 33% Mitsubishi Customer Co. Cameron LNG JV 33% Mitsui Customer Co. 33% GDF SUEZ Customer Co. Existing Regasification Terminal New Build Liquefaction Plant 10

59 Cameron Liquefaction Tolling Customers Mitsubishi and Mitsui are the two largest trading companies in Japan GDF SUEZ is one of the largest international energy/utility/lng companies in world Customer Credit Rating (S&P) Total Assets ($ billions) Strength A+ $152 (1) Leading LNG supplier to Japan A+ $109 (1) Ownership interests in 29% of global LNG (2011) A $271 (2) Third largest LNG portfolio in the world BBB+ $37 Owner and operator of two regasification terminals (1) JPY/USD exchange rate as of 3/31/13 (2) EUR/USD exchange rate as of 12/31/12 11

60 Projected Financial Information Project $9 - $10 billion of total cost $6 - $7 billion of incremental construction costs $750 $875 million of annual EBITDA to Sempra (1) $300 $350 million of annual earnings to Sempra Additional upside with expansion Financing 60% 70% leverage Sources of financing Export credit agencies Commercial banks Capital markets Access to low cost capital Strong debt coverage ratio Non-recourse financing (2) (1) Reconciliation of earnings to EBITDA (a non-gaap measure) provided in the Appendix. (2) Recourse to owners during construction 12

61 Updated Project Timeline Major Milestones Completed DOE Free Trade Agreement (FTA) Permit Received Commercial Development Agreements Signed Front End Engineering Design (FEED) Completed Formal FERC Application Filed Tolling Agreements with Customers Signed Joint Venture Partnership Agreements Signed Underway Target Date DOE Non-FTA Permit 2013 Financing Commitments 2H 13 EPC Contract 2H 13 FERC Permit Q4 13 / Q1 14 Upcoming Financing Funding 1H 14 Begin Construction 1H 14 Begin Commercial Operations 2H 17 13

62 Cameron LNG Well Positioned for Success Brownfield Facilities Japanese Customers Proven Commercial Technology Planned Project Financing Local Support Tolling Agreements Strategic Location EPC Contract Bids Issued Strong Partners Regulatory Permits Underway 14

63 Appendix 5/23/13

64 Reconciliation of GAAP Earnings to EBITDA ($ millions) Annual EBITDA and Earnings to Sempra from Cameron Liquefaction GAAP Earnings $ $ 350 Depreciation & Amortization Interest Expense Income Taxes EBITDA $ $ 875 EBITDA is non-gaap (GAAP represents accounting principles generally accepted in the United States) financial measure. Management believes EBITDA (earnings before interest, income taxes, depreciation and amortization) is a useful measurement of the performance of the project because it can be used to evaluate the effectiveness of our operations exclusive of interest, income taxes, depreciation and amortization; none of which is directly relevant to the efficiency of those operations. Non-GAAP financial measures are supplementary information that should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. The table above reconciles EBITDA to GAAP earnings, which we consider to be the most directly comparable financial measure calculated in accordance with GAAP. 16

65 Sempra U.S. Gas & Power Jeff Martin President & Chief Executive Officer Analyst Conference May 23, 2013

66 Outline Overview 2012 Accomplishments Renewables Market Strategy Partnership Growth Natural Gas Market Strategy Incremental Development Opportunities Summary 2

67 Sempra U.S. Gas & Power Overview (2) (3) 300 MW in operation 310 MW in construction 830 MW permitted 1,080 MW in operation 625 MW generating capacity 1,700 miles of pipeline (4) 30 Bcf of storage in operation 2 local distribution utilities 1.5 Bcf/d LNG terminal (1) Reflects 100% project capacity. (2) Reflects total potential capacity of solar project(s) at full build-out; net ownership interest expected to be 50%. (3) Sempra ownership interest is 50%. (4) Sempra ownership interest is 25%. (5) Cameron LNG regasification facility is currently in development phase for conversion to a liquefaction facility. 3

68 2012 Accomplishments Renewables Natural Gas Completed construction of two solar projects with a total capacity of 242 MW Completed construction of three wind projects with a total capacity of 317 MW (1) Signed 20-year PPA (2) for 250 MW Copper Mountain Solar 3 Completed four project financings totaling $670 million (2) Launched financing process for Copper Mountain Solar 2 Launched solar partnership process Expanded natural gas storage from 23 Bcf to 30 Bcf Sold one block of Mesquite Power to Salt River Project for ~$600 / kw Increased EBITDA by 5% at Mobile Gas Acquired natural gas utility in Hattiesburg, Mississippi Filed FERC permit and commenced development of Cameron Interstate Pipeline Opened a regional marketing office in Greenville, South Carolina (1) Reflects Sempra s share. (2) PPA - Power Purchase Agreement 4

69 Renewables: Market View New Renewable Generation by 2020 West 22.8 GW Midwest 10.6 GW Northeast 5.4 GW Southeast 13.2 GW Opportunities for Sempra Significant Moderate Limited Nine of 12 states in the West have a Renewables Portfolio Standard (RPS) Production Tax Credit (PTC) extended for wind facilities that begin construction in 2013 California RPS requirement: 20% in 2013, 25% in 2016 and 33% in 2020 Investment Tax Credit (ITC) for solar facilities placed in service prior to 2017 Source: Wood Mackenzie GW = Gigawatts 5

70 Renewables: Strategy Solar Wind Leverage existing project sites to obtain power purchase agreements (1) Continue to partner in wind projects Obtain project financing for Copper Mountain Solar 2 and 3 Leverage solar partnership process to enter into new wind opportunities Select joint venture partner for Mesquite Solar 1 and Copper Mountain Solar 2 Prioritize opportunities with 2013 construction start (1) Represents 830 MW of opportunities. 6

71 Renewables: Solar Partnership Strategy Strategy: High-grade returns, reduce risk and deconsolidate project debt Target: Large balance sheet, repeatable-growth partner News: Entered into a joint venture partnership with Con Edison in both our Mesquite Solar 1 and Copper Mountain Solar 2 projects Next: Will be launching partnership process for Copper Mountain Solar 3 later this year Partnership Process Launched Round 1 Bids Received Round 2 Bids Received Close CMS2 Financing and Execute Partnership Transaction Expected Transaction Close Q Q Q Q Due-diligence & site visits Final negotiatons Launch CMS3 Partnership Process 7

72 MW 5/23/13 Renewables: Historic and 5-Year Plan Growth Outlook (1) 2,000 Partners share Sempra s share 5-Year Additions 470 MW 1,850 MW 1, MW Added Solar Equity Sale 225 MW 1,200 (120 MW) MW 550 MW 950 MW MW CAGR: 22% Average PPA term: 22 years (2) Over 90% of 2017 capacity target is currently operating or under construction (1) Assumes 50% ownership of wind and solar project capacity excluding Copper Mountain Solar 1 (58 MW). (2) From inception 8

73 Renewables: Solid Strategy with Attractive Returns Advantaged land positions Fully permitted development land Located where RPS needs are highest Low-risk execution Long-term PPAs with investment-grade credit counterparties Turn-key EPC (1) contracts Rapid return of capital Front-loaded cash flows Portfolio ROEs exceed 25% (2) Attractive, bond-like cash flows Low-risk technology No variable fuel costs with predictable O&M (1) EPC - Engineering, Procurement and Construction contract (2) Represents 10-year average. 9

74 Natural Gas: Market View Gas-Fired Capacity and Gas Demand Growth by 2020 Midwest 2 GW Northeast 1.1 Bcfd 11 GW 2.2 Bcfd West 0 GW 0.7 Bcfd Southeast 32 GW 3.5 Bcfd Gas-Fired Capacity Gas Demand Growth Excludes 6 Bcf per day of U.S. exports Opportunities for Sempra Significant Moderate Limited Source: Wood Mackenzie 10

75 Natural Gas: Strategy Midstream Focus on natural gas storage, pipelines and exports in the Southeast Expand current asset base to support LNG exports Improve contracted cash flows of pipeline and storage assets Expand natural gas storage from 30 Bcf to 43 Bcf Utilities Focus on improving safety, service and reliability Grow existing natural gas distribution businesses Acquire adjacent gas distribution utilities to expand our footprint (1) Sempra ownership interest is 25%. (2) Cameron LNG regasification facility is currently in development phase for conversion to a liquefaction facility. 11

76 Incremental Development Opportunities Not in Plan 1 3 Years Utilities Acquire adjacent gas distribution utilities Pipeline Infrastructure Lateral pipelines from new natural gas fields Lateral pipelines to natural gas generation Wind PTC extension Solar California RPS Southeast RPS 3 5 Years Storage Additional capacity at Bay Gas, MS Hub or LA Storage Pipeline Infrastructure New inter- and/or intrastate pipelines Fuels Evaluate and execute market entry into LNG fuels business Liquefaction (4th train) Incremental build-out beyond planned 3-train facility 12

77 Summary Disciplined and integrated investment approach across renewables and natural gas Measured renewables growth with solid returns Pursue joint ventures Capitalize on project financing Reducing merchant power exposure Southeast-focused Leverage current assets to support LNG exports Make new investments to support LNG exports $2.5 billion (1) of capital returned over next five years (1) 5-year operating cash flow, cash grant proceeds, sale proceeds, and return of capital from investments 13

78 Appendix 5/23/13

79 Renewables Project Summary Name Location Present Capacity (MW) PPA Term (yrs) COD Sempra's Planned Share by 2017 In Operation 842 MW 721 MW Copper Mountain Solar 1 Nevada 58 MW (100%) / MW (100%) (1) Copper Mountain Solar 2 Nevada 92 MW (100%) MW (50%) (1) Mesquite Solar 1 Arizona 150 MW (100%) MW (50%) (1) Cedar Creek 2 Wind Colorado 125 MW (50%) (1) MW (50%) (1) Fowler Ridge 2 Wind Indiana 100 MW (50%) (1) MW (50%) (1) Flat Ridge 2 Wind Kansas 235 MW (50%) (1) MW (50%) (1) Mehoopany Wind Pennsylvania 71 MW (50%) (1) MW (50%) (1) Auwahi Wind Hawaii 11 MW (50%) (1) MW (50%) (1) In Construction 308 MW 154 MW Copper Mountain Solar 2 Copper Mountain Solar 3 Nevada Nevada 58 MW (150 MW total) 250 MW (100%) ( MW) MW (50%) (1) / MW (50%) (1) In Development 830 MW 75 MW Rosamond Solar - Phase 1 California 150 MW (100%) N/A 2015 / MW (50%) (1),(2) Rosamond Solar - Phase 2 California 150 MW (100%) N/A 2015 / 2016 Not in Plan Mesquite Solar 2 Arizona 530 MW (100%) N/A 2015 / 2016 Not in Plan (1) Reflects Sempra s expected net ownership interests. (2) 75 MW of incremental renewables is the only project in plan not currently in operation or under construction. 15

80 Sempra International George Liparidis President and Chief Executive Officer Analyst Conference May 23, 2013

81 Outline Business Overview Accomplishments Macroeconomic Conditions South America Assets Overview Mexico Assets Overview IPO of IEnova Future Opportunities Summary 2

82 Business Overview Chilquinta Energía 100% owned Electric distribution Electric transmission (under construction) Luz del Sur 80% owned Electric distribution Power generation (under construction) IEnova 81% owned Midstream gas Gas distribution LNG regasification Power generation Confirmation of Strategy: Emerging markets, high energy growth Proven track record with existing operations Growth funded by continuing operations, local debt and equity Substantial integration of US/Mexico energy markets (shale gas) 3

83 Accomplishments Chilquinta Energía Completed rate case (4 year cycle) Awarded two transmission projects to be built in 50/50 partnership with SAESA (total cost $150 million, funded by Chilean cash flows) Luz del Sur Santa Teresa hydro project on budget and schedule (funded 100% debt in local currency) IEnova Won bid to build $1 billion natural gas pipeline network in the states of Sonora and Sinaloa Closed on $408 million public debt financing Completed a $574 million IPO Added $865 million of new projects to Pemex Joint Venture (Guadalajara propane terminal, ethane pipeline, Los Ramones natural gas pipeline, all funded at JV level) 4

84 Strong Macroeconomic Conditions Economies in Chile, Peru and Mexico continue to outperform Stable political environments GDP growth Proven regulatory compacts Indicators 2012 South America Energy Growth (2) Chilquinta Energía Luz del Sur Energy sales 7.1% 5.7% 2012 Economic Growth (1) Customer growth 2.3% 3.6% Indicators Chile Peru Mexico GDP growth 5.5% 6.3% 3.9% GDP per capita $16,511 $7,309 $11,313 S&P rating AA- Stable BBB Positive BBB Positive Indicators Mexico Energy Growth (3) CAGR Electricity demand 4.7% Natural gas demand 3.7% (1) Latin Focus Consensus Forecast (2) Actual growth rate (3) Mexican Energy Ministry 5

85 South American Utilities Electric Distribution 968,000 customers 6,700 GWh New rates Q4-13 Electric Distribution 628,000 customers 2,700 GWh New rates Q4-12 6

86 Mexico Asset Overview IEnova Gas Segment Three natural gas pipelines Sonora pipelines in construction: Sásabe-Guaymas Guaymas-El Oro Regasification terminal Three natural gas distribution systems (94,000 customers) IEnova-Pemex Joint Venture Two natural gas pipelines Propane pipeline and terminal Guadalajara propane storage facility under construction Ethane pipeline, 140-miles under construction Los Ramones, 70-mile gas pipeline in negotiations IEnova Power Segment Combined cycle generation plant Wind project under development 7

87 IEnova s Initial Public Offering Sold 19% for ~$575 million First publicly traded energy company in Mexico Priced at top of IPO range Over 50% of initial allocations to Mexican investors Creates currency and a self-funding growth platform Mirrors equity ownership structure of Luz del Sur IEnova Stock Chart (1) ($MXP) $49.01 $44.28 $34.00 Market Cap = USD $4,622mm (2) (1) Stock Prices 3/21/13 to 5/16/13 (2) Market Cap using MXN/USD exchange rate as of 5/16/13 8

88 Mexico New Pipeline Projects Sonora Pipelines ($1 billion) IEnova 25-year contract for 100% of capacity with CFE 100% of pipe purchased Construction contract signed at fixed unit prices Right-of-Way trust, co-managed with CFE and states, with incentives to obtain land at market prices Environmental permit received Ethane Pipeline ($330 million) IEnova-Pemex Joint Venture 21 year contract for 100% of the capacity with Pemex Fixed price EPC contract reflected in negotiated rate Capacity rate escalated annually for inflation Los Ramones Gas Pipeline IEnova-Pemex Joint Venture Regulatory approval received Contract under negotiation with Pemex; similar to ethane pipeline 9

89 Incremental Opportunities Chile New electric transmission bids Greenfield power generation Peru 250 MW hydroelectric plant, Santa Teresa II Southern Peru natural gas pipeline Mexico Los Ramones II 700km+ pipeline project Liquefaction opportunity at ECA New projects at Pemex joint venture Gas distribution consolidation Expand wind project, potential for additional 1,000 MW 10

90 Summary International investments complementary to Sempra s portfolio strategy Operate in countries with stable political and regulatory environments resulting in robust economic and energy demand growth Major projects recently announced in 2012 will be funded through local capital markets Expect predictable financial results to be driven by reliable growth Significant incremental opportunities provide potential upside for accelerated growth 11

91 Appendix 5/23/13

92 Mexican Midstream Asset Summary Name Ownership Interest Length of Pipeline (km) Design Capacity Full COD Contract Term (yrs) NATURAL GAS SYSTEMS Samalayuca Pipeline 50% (1) MMcfd Dec-97 Annual Baja West Pipeline System 100% MMcfd Jun Baja East Pipeline System 100% 302 3,450 MMcfd (2) Aug Aguaprieta Pipeline 100% MMcfd Nov San Fernando Pipeline 50% (1) 114 1,000 MMcfd Nov Los Ramones Pipeline (3) 50% (1) 110 (5) 2,100 MMcfd 2H-14 (5) 20 SONORA PIPELINE EXPANSION Sásabe-Guaymas (4) 100% MMcfd 2H Guaymas-El Oro (4) 100% MMcfd 2H LNG FACILITY Energía Costa Azul 100% NA 1 Bcf/d May LPG SYSTEM TDF Pipeline and Terminal 50% (1) ,000 Bbld (6) Dec Guadalajara Terminal (4) 50% (1) NA 80,000 Bbld (6) 1H ETHANE PIPELINE Ethane Pipeline (4) 50% (1) MMcfd 2H (1) Assets owned under our 50% joint venture with Pemex Gas. (2) Design capacity including compression. (3) Per Pemex announcement; parties still negotiating terms of the transportation services agreement (4) Projects currently under development or in construction. (5) Represents phase 1 of Los Ramones project only. (6) In barrels of LPG. 13

93 Financial Joe Householder Executive VP & Chief Financial Officer Analyst Conference May 23, 2013

94 Financial Goals Strong and Sustainable Goals Sustain top-quartile growth Align the capital allocation with our business objectives Drivers Grow adjusted EPS at least 6% 8% (1) over the long term Optimize capital structure and global tax position Structure renewables and Cameron liquefaction through partnerships and project financing Distribute earnings from international operations Continue to evaluate MLP using Cameron liquefaction as a foundation Maintain a strong balance sheet and ample liquidity Produce growing and predictable earnings and cash flows Maintain a growing and competitive dividend Commit to strong investment-grade credit ratings Maintain capital structure; no current plans to issue Sempra Energy equity (1) Compound annual growth rate from 2013 to 2017; CAGR is calculated from the 2013 Adjusted EPS Range adjusted EPS of $4.00-$4.30 excludes $0.30 reflected in 2013 guidance for the California Utilities General Rate Case related to the 2012 retroactive adjustment. The $0.30 EPS is the midpoint of the estimated range of $70-$80mm for the 2012 retroactive adjustment. 2

95 Long-Term Adjusted EPS Growth Outlook $4.30 to $4.60 EPS guidance excluding 2012 Retroactive GRC Adjustment 2012 Retroactive GRC Adjustment Development opportunities not yet in plan Cameron Liquefaction $4.00 to $4.30 California Utilities Reliability, Innovation, and Operational Excellence Base Capital Pipeline Safety Enhancement Phase 1A Advanced Meters ECO Substation South Bay Relocation South Orange County Cleveland National Forest Aliso Canyon $14.5 billion capital program in the plan: Latin America Natural Gas Emphasis in Mexico; Emerging Markets Sonora Pipelines Los Ramones Pipeline (1) Ethane Pipeline (1) ESJ Wind Project Phase I (1) Guadalajara Propane Terminal (1) Santa Teresa Hydro I Chilean JV Transmission Projects (1) U.S. Gas Midstream Shale Gas Revolution Cameron Liquefaction (1) Storage Expansion Cameron Pipeline U.S. Renewables Industry Leading Development Copper Mountain Solar 3 Rosamond Solar 1 $5.10 to $ Expect adjusted earnings per share growth of 6% 8% (2) from $4.00 to $4.30, based upon current 5-year $14.5 billion capital program (2) (1) Capital to be funded by JV entities not included in the $14.5 billion (2) CAGR is calculated from the 2013 Adjusted EPS Range adjusted EPS of $4.00-$4.30 excludes $0.30 reflected in 2013 guidance for the California Utilities General Rate Case related to the 2012 retroactive adjustment. The $0.30 EPS is the midpoint of the estimated range of $70-$80mm for the 2012 retroactive adjustment. 3

96 Long-Term Adjusted EPS Growth Outlook $4.30 to $4.60 $4.00 to $4.30 EPS guidance excluding 2012 Retroactive GRC Adjustment 2012 Retroactive GRC Adjustment Development opportunities not yet in plan Cameron Liquefaction California Utilities Reliability, Innovation, and Operational Excellence Gas System Expansion Additional Renewables Development Smart Grid Full Deployment EPS Beyond 2017: Additional Pipeline Safety Enhancement Phases Development opportunities not yet in plan: Latin America Natural Gas Emphasis in Mexico; Emerging Markets Los Ramones Phase II Expand ESJ Wind Project Santa Teresa Hydro II Additional Electric Transmission in Chile Further PEMEX JV Growth Greenfield Power Generation EPS Beyond 2017: ECA Liquefaction U.S. Gas Midstream Shale Gas Revolution Additional Storage Build Outs including LA Storage Pipeline Laterals LNG Fuels Market Entry Acquire Adjacent Gas Distribution New Pipelines EPS Beyond 2017: 4 th Train of Cameron U.S. Renewables Industry Leading Development Additional Solar using Existing Land Positions Additional Opportunities Related to State RPS Mandates Additional growth could be achieved through development projects not yet in the plan Cameron expected to provide robust long-term growth with first full year of full capacity in 2019 $5.10 to $5.60 (2) (1) CAGR is calculated from the 2013 Adjusted EPS Range adjusted EPS of $4.00-$4.30 excludes $0.30 reflected in 2013 guidance for the California Utilities General Rate Case related to the 2012 retroactive adjustment. The $0.30 EPS is the midpoint of the estimated range of $70-$80mm for the 2012 retroactive adjustment. (2) Note that the 2019 earnings per share projection holds 2017 projection flat for two years while increasing expected growth only for Cameron Liquefaction 4

97 Earnings Outlook 2013 Outlook 2014 Outlook ($mm, except per share amounts) Low High Low High SDG&E $470 $500 $480 $520 SoCalGas Sempra U.S. Gas & Power Sempra International Parent and Other (180) (150) (200) (170) Sempra Consolidated excluding retro GRC $975 $1,110 $1,030 $1,180 Retroactive 2012 GRC Adjustment Sempra Consolidated (with retro GRC) $1,045 $1,190 $1,030 $1,180 Weighted Average diluted shares (mm) Adjusted diluted EPS excluding retro GRC $4.00 $4.30 $4.25 $4.55 Diluted EPS (with retro GRC) $4.30 $4.60 Solid recurring earnings growth in each business unit Reflects reduced ownership in Mexico 5

98 Five Year Capital Expenditures & Investments Plan SoCalGas $5.9bn International $1.8bn U.S. Gas & Power $1.1bn $14.5 billion capital program over five years (1) 80% California utilities 12% Latin American utilities, midstream and renewables 08% U.S. renewables and midstream SDG&E $5.7bn (1) Capital to be funded by JV entities not included in the $14.5 billion 6

99 Align the Capital Allocation with Our Business Objectives Structure renewables using partnerships and project financing to manage risks and maximize returns Liquefaction opportunity increases value of Cameron LNG facility Partnership structure with project financing enhances Sempra s return Recent re-allocation of capital includes IEnova equity carve-out Continue to sell merchant assets and those where market values exceed our view of potential future value 7

100 Maintain a Strong Balance Sheet and Ample Liquidity Debt / ($bn) Debt Equity Debt + Equity December 31, 2012 $12.89 Operating activities Earnings (6.0) 6.0 Depreciation Working capital and other non cash (6.4) (1.6) Investing activities Capital expenditures 14.5 Asset sales and return of capital (1) (1.5) Financing activities Dividends 3.4 (3.4) Common equity financing (0.1) 0.1 Preferred financing (0.2) 0.2 Other Change in non controlling interest (0.6) 0.5 Change in cash and other 0.7 $ % December 31, 2017 $15.1 $ % Actions Provide a strong, competitive and growing dividend Robust growth while maintaining strong investment-grade credit ratings $2.7 billion debt increase at California utilities Maintain strong and diversified credit lines Over $4 billion committed Spread among more than 20 lenders Cash from operations supports large capital program and strong balance sheet (1) Includes expected proceeds from asset sales, renewable grants, and return of capital from project financing 8

101 Cash Flow from International Operations Projected strong performance from International operations allows for distributions to the U.S. of approximately $200 million in 2013 and $300 million each year starting in 2014 Benefits Highlights synergistic effect of our diversified portfolio Leverages current tax position Accelerates the utilization of renewable energy tax credits Majority of cash used to repay debt and support higher dividend Considerations Reduces EPS by approximately $0.25 in 2013 and $0.30 thereafter Majority of cash tax impact is beyond 2018 Proposed International Distributions Timeline International Distributions U.S. Tax Loss Minimal Cash Taxes Utilize Tax Credits (1) (1) No U.S. tax loss 9

102 Total Shareholder Return Comparison (1) 60% Sempra Energy 57.8% Luz del Sur 57.4% 30% S&P % S&P 500 Utilities 16.9% 0% IEnova 44.2% Mexico Bolsa IPC 0.0% (1.8%) March 21, 2013 May 16, 2013 (30%) Jan 2012 Mar 2012 May 2012 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 (1) Source: SNL and Bloomberg as of May 16,

103 Dividend-Per-Share Growth Dedicated to providing a stable dividend with growth Seek to maintain a long-term dividend payout ratio of 45% 50% Over plan horizon, higher payout ratio expected due to repatriation plan $2.40 $2.52 $1.56 $ A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 11

104 Summary Expect top-quartile EPS growth Cash from operations and IEnova IPO support large capital program and strong balance sheet Commitment to strong investment-grade credit ratings Dividend increase of 5% supported, in part, by cash flows from Sempra International Capital allocation aligned with strategy Solid near-term growth coupled with visible high-value, long-term prospects should accelerate growth 12

105 Appendix 5/23/13

106 Credit Ratings As of May 16, 2013 S&P Moody s Fitch Sempra Energy Unsecured Debt BBB+ Baa1 BBB+ Commercial Paper A-2 P-2 F2 SoCalGas Secured Debt A+ Aa3 AA- Unsecured Debt A A2 A+ Preferred Stock BBB+ Baa1 A- Commercial Paper A-1 P-1 F1 SDG&E Secured Debt A+ Aa3 AA- Unsecured Debt A A2 A+ Preferred Stock BBB+ Baa1 A- Commercial Paper A-1 P-1 F1 14

107 Capital Expenditures & Investments Outlook (1) Average of $2.9 billion per year over five-year period 2013 Outlook 2014 Outlook Averages ($mm) Low High Low High SDG&E $1,550 $1,000 $1,200 $900 $1,100 SoCalGas 1,000 1,300 1,400 1,150 1,250 California Utilities 2,550 2,300 2,600 2,050 2,350 U.S. Gas & Power International Total $3,350 $2,900 $3,350 $2,475 $2,900 (1) Capital to be funded by JV entities not included in the capital plan 15

108 Liquidity (1) California Utilities Sempra Global Sempra Energy ($mm) Corporate Aggregate bank commitments $877 $2,189 $1,067 $4,133 Outstanding letters of credit 0 0 (34) (34) Outstanding commercial paper 0 (747) 0 (747) Available capacity under facilities $877 $1,442 $1,033 $3,352 Over $4 billion in credit lines (1) Figures as of Q