FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2017



RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
	Fair value at March 31, 2017
	Level 1		Level 2		Level 3		Netting(1)			Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	606	$	5	$	—	$	—		$	611
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	40		11		—		—			51
Municipal bonds	—		221		—		—			221
Other securities	—		167		—		—			167
Total debt securities	40		399		—		—			439
Total nuclear decommissioning trusts(2)	646		404		—		—			1,050
Interest rate and foreign exchange instruments	—		99		—		—			99
Commodity contracts not subject to rate recovery	—		23		—		9			32
Commodity contracts subject to rate recovery	—		2		90		20			112
Total	$	646	$	528	$	90	$	29		$	1,293

Liabilities:
Interest rate and foreign exchange instruments	$	—	$	211	$	—	$	—		$	211
Commodity contracts not subject to rate recovery	—		6		—		—			6
Commodity contracts subject to rate recovery	25		8		186		(24		)	195
Total	$	25	$	225	$	186	$	(24	)	$	412

	Fair value at December 31, 2016
	Level 1		Level 2		Level 3		Netting(1)			Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	508	$	—	$	—	$	—		$	508
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	36		16		—		—			52
Municipal bonds	—		206		—		—			206
Other securities	—		141		—		—			141
Total debt securities	36		363		—		—			399
Total nuclear decommissioning trusts(2)	544		363		—		—			907
Interest rate and foreign exchange instruments	—		9		—		—			9
Commodity contracts not subject to rate recovery	—		15		—		9			24
Commodity contracts subject to rate recovery	1		3		96		32			132
Total	$	545	$	390	$	96	$	41		$	1,072

Liabilities:
Interest rate and foreign exchange instruments	$	—	$	252	$	—	$	—		$	252
Commodity contracts not subject to rate recovery	16		11		—		(17		)	10
Commodity contracts subject to rate recovery	19		8		170		(18		)	179
Total	$	35	$	271	$	170	$	(35	)	$	441


(1)	Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.


(2)	Excludes cash balances and cash equivalents.



RECURRING FAIR VALUE MEASURES – SDG&E
(Dollars in millions)
	Fair value at March 31, 2017
	Level 1		Level 2		Level 3		Netting(1)			Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	606	$	5	$	—	$	—		$	611
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	40		11		—		—			51
Municipal bonds	—		221		—		—			221
Other securities	—		167		—		—			167
Total debt securities	40		399		—		—			439
Total nuclear decommissioning trusts(2)	646		404		—		—			1,050
Commodity contracts not subject to rate recovery	—		—		—		1			1
Commodity contracts subject to rate recovery	—		—		90		19			109
Total	$	646	$	404	$	90	$	20		$	1,160

Liabilities:
Interest rate instruments	$	—	$	22	$	—	$	—		$	22
Commodity contracts subject to rate recovery	25		7		186		(24		)	194
Total	$	25	$	29	$	186	$	(24	)	$	216

	Fair value at December 31, 2016
	Level 1		Level 2		Level 3		Netting(1)			Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	508	$	—	$	—	$	—		$	508
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	36		16		—		—			52
Municipal bonds	—		206		—		—			206
Other securities	—		141		—		—			141
Total debt securities	36		363		—		—			399
Total nuclear decommissioning trusts(2)	544		363		—		—			907
Commodity contracts not subject to rate recovery	—		—		—		1			1
Commodity contracts subject to rate recovery	1		2		96		30			129
Total	$	545	$	365	$	96	$	31		$	1,037

Liabilities:
Interest rate instruments	$	—	$	25	$	—	$	—		$	25
Commodity contracts subject to rate recovery	17		7		170		(16		)	178
Total	$	17	$	32	$	170	$	(16	)	$	203


(1)	Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.


(2)	Excludes cash balances and cash equivalents.



RECURRING FAIR VALUE MEASURES – SOCALGAS
(Dollars in millions)
	Fair value at March 31, 2017
	Level 1		Level 2		Level 3		Netting(1)			Total
Assets:
Commodity contracts subject to rate recovery	$	—	$	2	$	—	$	1		$	3
Total	$	—	$	2	$	—	$	1		$	3

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	1	$	—	$	—		$	1
Total	$	—	$	1	$	—	$	—		$	1

	Fair value at December 31, 2016
	Level 1		Level 2		Level 3		Netting(1)			Total
Assets:
Commodity contracts not subject to rate recovery	$	—	$	—	$	—	$	1		$	1
Commodity contracts subject to rate recovery	—		1		—		2			3
Total	$	—	$	1	$	—	$	3		$	4

Liabilities:
Commodity contracts subject to rate recovery	$	2	$	1	$	—	$	(2	)	$	1
Total	$	2	$	1	$	—	$	(2	)	$	1

(1)

Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.

Recurring Fair Value Measures Level 3 Rollforward Table

The following table sets forth reconciliations of changes in the fair value of CRRs and long-term, fixed-price electricity positions classified as Level 3 in the fair value hierarchy for Sempra Energy Consolidated and SDG&E:



LEVEL 3 RECONCILIATIONS
(Dollars in millions)
	Three months ended March 31,
	2017			2016
Balance at January 1	$	(74	)	$	19
Realized and unrealized losses	(13		)	(1		)
Settlements	(9		)	(7		)
Balance at March 31	$	(96	)	$	11
Change in unrealized losses relating to
instruments still held at March 31	$	(16	)	$	(1	)

Fair Value of Financial Instruments Table

The following table provides the carrying amounts and fair values of certain other financial instruments that are not recorded at fair value on the Condensed Consolidated Balance Sheets at March 31, 2017 and December 31, 2016:



FAIR VALUE OF FINANCIAL INSTRUMENTS
(Dollars in millions)
	March 31, 2017
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates(1)	$	168	$	—	$	78	$	86	$	164
Total long-term debt(2)(3)	14,971		—		15,123		496		15,619
SDG&E:
Total long-term debt(3)(4)	$	4,493	$	—	$	4,546	$	302	$	4,848
SoCalGas:
Total long-term debt(5)	$	3,009	$	—	$	3,121	$	—	$	3,121

	December 31, 2016
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates(1)	$	184	$	—	$	91	$	84	$	175
Total long-term debt(2)(3)	15,068		—		15,455		492		15,947
SDG&E:
Total long-term debt(3)(4)	$	4,654	$	—	$	4,727	$	305	$	5,032
SoCalGas:
Total long-term debt(5)	$	3,009	$	—	$	3,131	$	—	$	3,131


(1)	Excluding accumulated interest outstanding of $19 million and $17 million at March 31, 2017 and December 31, 2016, respectively.

(2)

Before reductions for unamortized discount (net of premium) and debt issuance costs of $105 million and $109 million at March 31, 2017 and December 31, 2016, respectively, and excluding build-to-suit and capital lease obligations of $382 million and $383 million at March 31, 2017 and December 31, 2016, respectively. We discuss our long-term debt in Note 6 above and in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report.


(3)	Level 3 instruments include $302 million and $305 million at March 31, 2017 and December 31, 2016, respectively, related to Otay Mesa VIE.


(4)	Before reductions for unamortized discount and debt issuance costs of $43 million and $45 million at March 31, 2017 and December 31, 2016, respectively, and excluding capital lease obligations of $239 million and $240 million at March 31, 2017 and December 31, 2016, respectively.

(5)

Before reductions for unamortized discount and debt issuance costs of $26 million and $27 million at March 31, 2017 and December 31, 2016, respectively.