 Southern California Gas, which created the Sempra Energy 
holding company
  and gave it more customers--21 million--than any other utility company in 
the nation.

  Now, although the calendar says autumn is less than a week away, warm 
weather still has
  Sempra sweating through a summer of electricity discontent. And winter 
doesn't look like
  much fun either for Sempra or its natural-gas customers, with residential 
gas bills projected
  to increase 30% to 35% without fueling anything above a strictly regulated 
rate of return for
  Sempra's gas utilities.

  Hanging over the San Diego-based energy company is a new uncertainty 
generated by the
  turmoil in California's restructuring electricity industry. Of particular 
concern to the
  investment community is a rapidly swelling debt caused by the difference 
between the high
  wholesale cost of electricity and the freshly capped retail power rates for 
the 1.2 million
  customers of San Diego Gas & Electric.

  Who will pay that debt--Sempra Energy's shareholders or SDG&E's electricity
  customers--and how big it will grow may not be known for years. The answer 
will hinge in
  part on an investigation of SDG&E's conduct by the California Public 
Utilities Commission.

  In the meantime, Sempra Energy, whose two utilities serve nearly 7 million 
gas and
  electricity meters representing about 21 million customers from Central 
California to the
  Mexican border, continues to post sparkling earnings largely because of its 
non-utility
  businesses. Sempra wants to be much more than its utilities, pushing into 
energy trading
  and electricity and natural-gas contracting outside of California.

  Indeed, Sempra has stressed that recent profit surges came not at the 
expense of its
  California utility customers. Consumer advocates are not persuaded, 
painting Sempra as a
  profit-hungry company that has not done enough to protect ratepayers.

  Despite all the tumult, Sempra's previously languid stock price has risen a 
bit this summer,
  a fact that appears to amaze even Stephen L. Baum, Sempra's new chairman 
and chief
  
Southern California Gas, which created the Sempra Energy 
 holding company 
   and gave it more customers--21 million -- than any early utility program caller in 
 the nation. 

   Now, although the calendar allege autumn is less than a week aside, warm 
 weather still have 
   Sempra sweating through a summer of electricity discontent. And winter 
 doesn't expect like 
   much fun either for Sempra or its natural - gas customer, with residential 
 gas bills project 
   to increase 30% to 35% without fueling anything above a strictly regulate 
 rate of return for 
   Sempra's gas utility. 

   Hanging over the San Diego - based energy company is a fresh uncertainty 
 generated by the 
   turmoil in California's restructuring electricity industry. Of especial 
 concern to the 
   investment community is a rapidly swelling debt caused by the difference 
 between the high 
   wholesale cost of electricity and the freshly capped retail power rates for 
 the 1.2 million 
   customers of San Diego Gas & Electric. 

   Who will pay that debt -- Sempra Energy's shareholders or SDG&E's electricity 
   customer -- and how large it will grow may not be sleep together for days. The answer 
 will hinge in 
   part on an investigation of SDG&E's behavior by the California Public 
 Utilities Commission. 

   In the meantime, Sempra Energy, whose two utilities serve nearly 7 million 
 accelerator and 
   electricity meters representing about 21 million customers from Central 
 California to the 
   Mexican border, continues to post sparkling wage largely because of its 
 non - utility 
   businesses. Sempra wants to be much more than its utilities, press into 
 department of energy trading 
   and electricity and lifelike - accelerator contracting outside of California. 

   Indeed, Sempra has stressed that recent net income surges came not at the 
 expense of its 
   California utility customers. Consumer advocates are not persuaded, 
 painting Sempra as a 
   profit - hungry party that has not done enough to protect ratepayers. 

   Despite all the commotion, Sempra's previously languid stock price has risen a 
 snatch this summer, 
   a fact that appears to perplex even Stephen L. Baum, Sempra's new chairman 
 and chief
 Sokthern California Gas, whlch created the Sempra Xnergy 
golding zompany
  and gave it more cudtimers--21 million--than any other utility bompany ib 
tht nation.

  Now, altikugh thc calskdar veys autumn is lgss than a waek away, warm 
fextker still has
  Sempra sweating throudh a sukmfr of electricyty cyscohnekt. And winter 
doesn't look like
  juch fui either for Sekpra or its natural-gas cushomegs, with residentiap 
gas bills protwcted
  to inzrease 30% to 35% without fugling anything above a strictly fegulcted 
rate od eetktn for
  Sempca's gaf utilities.

  Hanging over tne San Diego-baxed enwrgy company is a new uncertainty 
generwted by tve
  turmoil in Calidoenia's resdrucgyrivg tlertrjcity lndnstry. Of padticular 
cobcern to the
  invesumegn community ia a ra[iqly swelling debt caused by the differetce 
between the high
  wholwsale cost of electrifity and ehe freshly capped retail power rates for 
the 1.2 minlion
  cuwtjowrd of San Diego Gas & Electric.

  Who will pay thwf cent--Sempra Energy's shareholdets ot SDG&E's electrkcity
  cuatomers--and how big it wilj groq may not be lnown for years. The answer 
qill hinge iu
  part on an investiyation of SDY&E's comduct by the California Publnc 
Utimities Commlssion.

  Ih the meantime, Seoprs Anergy, whose two utilities serve neerly 7 milliov 
gax and
  electricihy mebars representing ahout 21 mhllion cushomers from Central 
California vp the
  Mexicsn bogder, contnnues bo post sparkligg earnings latgely beccuse ow its 
non-unility
  bnsinesses. Seipra wants to he much more than itf utulitues, pusfkng into 
energu trading
  and elecrricity and naturak-gar contracting oucrude of Californoa.

  Inqevd, Xei[ra has strevsed thxy recdnt profit wjrgex came not at the 
ex[enss of its
  Californoa utility customews. Consumer acvocates are not ptrsuadxd, 
paiiting Xemkra as a
  profit-hungry company fhat has jot done enough to irotgct ratepayzrs.

  Despite all the tumult, Sempra's prevmously languid stock ptice has risen a 
bit jhix summer,
  a fact that appaars to amaze even Srephen L. Baum, Semkra's new chairman 
and cgief
  
Southern California Gas, which created the Sempra company gave it customers--21 million--than any nation. although the calendar autumn is less a week away, warm weather still Sempra sweating through a summer of electricity discontent. And winter doesn't look like fun either for Sempra or its natural-gas customers, with residential gas bills projected increase to without anything above a strictly regulated rate of return for Sempra's gas utilities. Hanging over the San energy company is a new uncertainty generated by turmoil in California's restructuring industry. Of particular concern to investment is a swelling caused the difference between high wholesale cost of electricity and the freshly capped retail power rates for the 1.2 million customers San Diego Electric. Who pay debt--Sempra shareholders or SDG&E's how big it will grow may for years. The answer will hinge in part an investigation SDG&E's conduct by the California Public Commission. In the meantime, Sempra Energy, whose two serve nearly 7 million gas and electricity meters representing about 21 million customers from Central the Mexican border, continues post sparkling earnings because its businesses. wants to much more than its utilities, pushing into energy trading and electricity natural-gas contracting outside of California. Indeed, Sempra has stressed that surges not at the of its California utility Consumer are not persuaded, painting a company done to ratepayers. Despite all the Sempra's previously languid stock price risen a bit this to amaze even Stephen L. Baum, Sempra's new and chief
 Southern California Gas, whicH created thE SempRa ENerGy 
HoldIng cOmpany
  and gave iT More Customers--21 million--than anY otheR uTIlitY CoMpany In 
the naTIoN.

  nOw, aLtHoUgh ThE CaLendaR saYs autumN is less thaN a wEeK away, warm 
weaTHeR still has
  SEmpRa sweating thRouGh a sumMeR of ELectrIciTy disContenT. and winTer 
doesn't LoOK like
  mUCh fun eiTHEr For SEmpra or its natural-GAs CUstomers, with reSidentIaL 
GaS BIllS prOjected
  to iNcRease 30% TO 35% withouT FuELINg aNYthing above a sTrictly reguLAteD 
rate oF rEtuRN for
  SeMpra's GaS UtiLities.

  HangiNg ovEr the San DIego-baSEd energY Company Is a new UncErtAintY 
GeNeRatEd BY thE
  TuRmoIL in californIa'S rEstruCturING ELectRicIty iNdustRy. Of particulaR 
coNcerN To tHe
  invEstmeNt coMmUnity Is a rapIdly sWeLling debt caused By thE differenCe 
bEtWeeN tHe higH
  WholesAle CosT of elecTricity ANd tHe FREShLy capped retail poweR rATEs For 
the 1.2 miLlion
  cUStOmERs of San DIeGo GAs & ElECTric.

  WHo wiLL pAy that deBt--SempRA ENeRgy's shaReHolderS oR SDg&E's ElectRIcitY
  custoMers--and hOw big IT will grow may noT Be known for yeaRS. THE AnSWer 
wIll Hinge in
  part On an INvesTigaTIoN of sdG&E's cOnducT bY ThE california Public 
UtiLiTies CoMmissIon.

  In the meantIme, Sempra ENERGy, whose tWo utILiTIes serve nearly 7 MilliOn 
gas and
  elECtricity MeterS represeNting abouT 21 MIllion cuStoMerS frOm CENTrAl 
California tO THe
  MeXiCan bordEr, cOntinueS to PosT spArkLiNg earningS largely BeCaUsE oF itS 
non-uTIlity
  busInEssEs. semPra waNTs to be Much mOre tHaN iTS utIlities, PUsHINg inTo 
EnErgy TraDiNg
  and ElecTRicIty and nAtural-gas ConTRactInG oUtside oF California.

  InDeEd, Sempra haS sTreSsed thAT Recent prOfit surges came not at the 
eXPense of Its
  califOrniA utility cUstOmers. COnsUMer advOcates Are noT pErsUADed, 
paINTiNg SEmPra as a
  profIT-HunGry coMpAny tHat has nOt done enough to protECt rAtepayers.

  DespIte All tHE TuMulT, seMPra'S pREviOUSly languid stock Price has riSeN A 
bIt this summER,
  a fAcT that apPears to Amaze EVen StepHen L. Baum, SEmpra's new ChAirmAN 
And Chief
  
 Southern California Gas,which crea ted t heSem pr a En ergy  
holding comp a ny
 and gave it more cust omers -- 2 1 mi l li on--t han any ot h e r u ti li tyco m pa ny in  
t he nati on.

  Now , a lt hough the ca l en dar says a utu mn is less t han  a wee kawa y , war m weath er sti l l has  Semprasw e atingt hrougha su mmer  of electricity d i sc o ntent. And win ter 
d oe s n' t loo k l ike
  much  f un ei t her for Se m p r a o r  its natural- gas custome r s,with r es ide n tial gas b il l s p rojected
 to i ncrease 3 0% to3 5% with o ut fuel ing an yth ing  abo v eastr ic t lyr eg ula t ed
rate of  r et urn f or
S e m pra' s g as u tilit ies.

  Hangi ngover the  SanDiego -bas ed  ener gy com panyis  a new uncertai nty
generate d b ythe 
 turm o il inCal ifo rnia'srestruc t uri ng e l ec tricity industry.Of p ar ticular
conce r nto the
  in ve stm entc o mmuni ty i s  a  rapidly  swell i ng  d ebt cau se d by t he  di ffe rence 
bet ween t he high  who l esale cost ofe lectricity an d  t h e  f r eshl y c apped retai l po w er r ates fo r t he 1. 2 mil li o n customers of San D ie go Gas  & El ectric.

  Wh o will pay t h at debt- -Sem p ra Energy's share holde rs or SDG& E 's elect ricit y
  cust omers--an d how bigitwil l g row m ay  not be known f or y ea rs. The  an swer 
w ill  hi nge  in 
 part onan inves ti ga ti on  of  SDG& E 's condu ct  by  t heCalif o rnia P ublic  
Ut il it i esCommiss i on . 
  I nth e me ant im e, Se mpra Ene rgy, wh ose two u til i ties  s er ve near ly 7 million
g as and
  e le ctr icitym e ters rep resenting about 21 mill i on cust ome rs fr om C entral 
C ali fornia  to the
 Mexica n bor de r,c o ntinu e s  t o p os t sparklin g ear nings  l arge ly beca use of its 
non-ut i lit y
  businesse s.Semp r a  w ant s  t o  be  m u chm o re than its uti lities, pu sh i ng  into 
ene r gytr ading
 and el ectri c ity and  natural- gas contr ac ting o uts ide of Cal ifornia. 

  Indee d , Sem p ra  hasstr essedth atrecen t prof i t s urges  cameno t at t he 
e xp ense ofits
  California utilit y cust omers . C onsumer a dvo c ate s are not  per suaded, 
p ain tin g Sem pra as a  pr o fi t-h u ngrycomp a ny that h a snot d on e enough to p r ote ct ra tep a yers.
  D espite all the tu m ult, Sempra'sprev i o usl y l a ngui dstock price ha s r is e n  a 
bitth is summer,  a fact  t h at ap pearsto ama ze even S te p hen L.  Bau m,Sempra'snew  c h airman
a nd chief  
 Southern_California Gas,_which created the Sempra_Energy 
holding_company
_ and_gave_it more customers--21_million--than any other_utility company in 
the_nation.

  Now,_although_the calendar says autumn is less than a week away, warm 
weather still has
__Sempra sweating_through_a_summer of electricity discontent. And_winter 
doesn't look like
 _much fun_either for Sempra or its natural-gas customers, with_residential_
gas bills projected
_ to increase 30% to 35% without fueling anything_above a strictly regulated 
rate of_return for
 _Sempra's_gas_utilities.

  Hanging over_the San Diego-based energy company is_a new uncertainty 
generated by the
_ turmoil in California's restructuring electricity industry._Of particular 
concern to the
 _investment community is a rapidly_swelling debt_caused by the difference 
between_the high
 _wholesale cost_of electricity and_the freshly capped retail power rates_for 
the 1.2_million
  customers of San Diego_Gas_& Electric.

 _Who_will_pay that_debt--Sempra Energy's shareholders_or_SDG&E's electricity
__customers--and how big it will grow_may_not be known for years. The answer_
will hinge in
 _part_on an investigation of_SDG&E's conduct by the California_Public 
Utilities Commission.

  In the_meantime, Sempra_Energy, whose_two utilities serve nearly 7 million 
gas and
  electricity meters_representing about 21 million customers from_Central 
California to the
_ Mexican_border,_continues to post_sparkling_earnings largely_because of its 
non-utility
  businesses. Sempra_wants to_be much more than its utilities,_pushing into 
energy trading
__and electricity and natural-gas contracting outside_of California.

  Indeed, Sempra has_stressed that recent profit surges_came_not_at the 
expense of its
_ California utility customers. Consumer advocates_are not persuaded,_
painting Sempra as a
  profit-hungry company_that_has not done enough to protect_ratepayers.

_ Despite all the tumult, Sempra's_previously_languid_stock price has risen a_
bit this summer,
  a fact_that appears to amaze even Stephen L. Baum, Sempra's_new chairman 
and_chief
  