FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2019



RECURRING FAIR VALUE MEASURES – SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
	Fair value at September 30, 2019
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	465		$	5	$	—	$	470
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	39			12		—		51
Municipal bonds	—			291		—		291
Other securities	—			236		—		236
Total debt securities	39			539		—		578
Total nuclear decommissioning trusts⁽¹⁾	504			544		—		1,048
Interest rate and foreign exchange instruments	—			9		—		9
Commodity contracts not subject to rate recovery	—			12		—		12
Effect of netting and allocation of collateral⁽²⁾	18			—		—		18
Commodity contracts subject to rate recovery	1			6		253		260
Effect of netting and allocation of collateral⁽²⁾	11			—		6		17
Total	$	534		$	571	$	259	$	1,364

Liabilities:
Interest rate and foreign exchange instruments	$	—		$	169	$	—	$	169
Commodity contracts not subject to rate recovery	—			18		—		18
Commodity contracts subject to rate recovery	15			5		74		94
Effect of netting and allocation of collateral⁽²⁾	(15		)	—		—		(15		)
Total	$	—		$	192	$	74	$	266

	Fair value at December 31, 2018
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	407		$	4	$	—	$	411
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	43			10		—		53
Municipal bonds	—			269		—		269
Other securities	—			234		—		234
Total debt securities	43			513		—		556
Total nuclear decommissioning trusts⁽¹⁾	450			517		—		967
Interest rate and foreign exchange instruments	—			2		—		2
Commodity contracts not subject to rate recovery	—			24		—		24
Effect of netting and allocation of collateral⁽²⁾	19			—		—		19
Commodity contracts subject to rate recovery	2			9		278		289
Effect of netting and allocation of collateral⁽²⁾	28			—		5		33
Total	$	499		$	552	$	283	$	1,334

Liabilities:
Interest rate and foreign exchange instruments	$	—		$	150	$	—	$	150
Commodity contracts not subject to rate recovery	—			34		—		34
Commodity contracts subject to rate recovery	2			5		99		106
Effect of netting and allocation of collateral⁽²⁾	(2		)	—		—		(2		)
Total	$	—		$	189	$	99	$	288


⁽¹⁾	Excludes cash and cash equivalents.


⁽²⁾	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 – SDG&E
(Dollars in millions)
	Fair value at September 30, 2019
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	465		$	5	$	—	$	470
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	39			12		—		51
Municipal bonds	—			291		—		291
Other securities	—			236		—		236
Total debt securities	39			539		—		578
Total nuclear decommissioning trusts⁽¹⁾	504			544		—		1,048
Commodity contracts subject to rate recovery	—			1		253		254
Effect of netting and allocation of collateral⁽²⁾	8			—		6		14
Total	$	512		$	545	$	259	$	1,316

Liabilities:
Commodity contracts subject to rate recovery	$	15		$	1	$	74	$	90
Effect of netting and allocation of collateral⁽²⁾	(15		)	—		—		(15		)
Total	$	—		$	1	$	74	$	75

	Fair value at December 31, 2018
	Level 1			Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Equity securities	$	407		$	4	$	—	$	411
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies	43			10		—		53
Municipal bonds	—			269		—		269
Other securities	—			234		—		234
Total debt securities	43			513		—		556
Total nuclear decommissioning trusts⁽¹⁾	450			517		—		967
Commodity contracts subject to rate recovery	1			6		278		285
Effect of netting and allocation of collateral⁽²⁾	23			—		5		28
Total	$	474		$	523	$	283	$	1,280

Liabilities:
Interest rate instruments	$	—		$	1	$	—	$	1
Commodity contracts subject to rate recovery	2			—		99		101
Effect of netting and allocation of collateral⁽²⁾	(2		)	—		—		(2		)
Total	$	—		$	1	$	99	$	100


⁽¹⁾	Excludes cash and cash equivalents.


⁽²⁾	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 – SOCALGAS
(Dollars in millions)
	Fair value at September 30, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	1	$	5	$	—	$	6
Effect of netting and allocation of collateral⁽¹⁾	3		—		—		3
Total	$	4	$	5	$	—	$	9

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	4	$	—	$	4
Total	$	—	$	4	$	—	$	4

	Fair value at December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	1	$	3	$	—	$	4
Effect of netting and allocation of collateral⁽¹⁾	5		—		—		5
Total	$	6	$	3	$	—	$	9

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	5	$	—	$	5
Total	$	—	$	5	$	—	$	5

⁽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 table below 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⁽¹⁾
(Dollars in millions)
	Three months ended September 30,
	2019			2018
Balance at July 1	$	176		$	(31	)
Realized and unrealized (losses) gains	(24		)	6
Settlements	27			13
Balance at September 30	$	179		$	(12	)
Change in unrealized gains (losses) relating to instruments still held at September 30	$	1		$	6
	Nine months ended September 30,
	2019			2018
Balance at January 1	$	179		$	(28	)
Realized and unrealized (losses) gains	(32		)	21
Allocated transmission instruments	—			3
Settlements	32			(8		)
Balance at September 30	$	179		$	(12	)
Change in unrealized gains (losses) relating to instruments still held at September 30	$	12		$	—

⁽¹⁾

Excludes the effect of the contractual ability to settle contracts under master netting agreements.

Schedule of Fair Value Inputs

The fair value of the net electricity positions classified as Level 3 is derived from a discounted cash flow model using market electricity forward price inputs. The range and weighted-average price of these inputs at September 30 were as follows:



LONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTS

Settlement year		Price per MWh					Weighted-average price per MWh
2019	$	21.60	to	$	57.20	$	38.29
2018		20.40	to		57.70		38.87

For the CRRs settling from January 1 to December 31, the auction price inputs, at a given location, were in the following ranges for the years indicated below:



CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS

Settlement year	Price per MWh						Median price per MWh
2019	$	(8.57	)	to	$	35.21	$	(2.94	)
2018	(7.25		)	to	11.99		0.09

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.



FAIR VALUE OF FINANCIAL INSTRUMENTS
(Dollars in millions)
	September 30, 2019
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates	$	712	$	—	$	735	$	—	$	735
Long-term amounts due to unconsolidated affiliates	39		—		38		—		38
Total long-term debt⁽¹⁾	21,554		—		23,142		26		23,168
SDG&E:
Total long-term debt⁽²⁾	$	5,141	$	—	$	5,780	$	—	$	5,780
SoCalGas:
Total long-term debt⁽³⁾	$	3,809	$	—	$	4,290	$	—	$	4,290

	December 31, 2018
	Carrying amount		Fair value
	Carrying amount		Level 1		Level 2		Level 3		Total
Sempra Energy Consolidated:
Long-term amounts due from unconsolidated affiliates	$	644	$	—	$	648	$	4	$	652
Long-term amounts due to unconsolidated affiliates	37		—		35		—		35
Total long-term debt⁽⁴⁾⁽⁵⁾	21,340		—		20,616		247		20,863
SDG&E:
Total long-term debt⁽⁴⁾⁽⁶⁾	$	4,996	$	—	$	4,897	$	220	$	5,117
SoCalGas:
Total long-term debt⁽⁷⁾	$	3,459	$	—	$	3,505	$	—	$	3,505


⁽¹⁾	Before reductions of unamortized discount and debt issuance costs of $221 million and excluding finance lease obligations of $1,285 million.


⁽²⁾	Before reductions of unamortized discount and debt issuance costs of $49 million and excluding finance lease obligations of $1,270 million.


⁽³⁾	Before reductions of unamortized discount and debt issuance costs of $35 million and excluding finance lease obligations of $15 million.


⁽⁴⁾	Level 3 instruments include $220 million related to Otay Mesa VIE.


⁽⁵⁾	Before reductions of unamortized discount and debt issuance costs of $206 million and excluding build-to-suit and capital lease obligations of $1,413 million.


⁽⁶⁾	Before reductions of unamortized discount and debt issuance costs of $49 million and excluding capital lease obligations of $1,272 million.


⁽⁷⁾	Before reductions of unamortized discount and debt issuance costs of $32 million and excluding capital lease obligations of $3 million.