Sempra Energy Unit To Surrender Nova Scotia Natural Gas Distribution Franchise
SAN DIEGO, Sept. 24, 2001 - Sempra Energy's Sempra Atlantic Gas unit has notified the Government of Nova Scotia and the Nova Scotia Utility and Review Board (UARB) that the company intends to surrender its natural gas distribution franchise.
The decision comes after months of detailed consideration of whether, under the current regulatory environment, a viable business case can be made for moving forward in Nova Scotia, company officials said.
In June 2001, Sempra Atlantic Gas advised the UARB that, since receiving the franchise, actions beyond the control of the company have had a substantial negative impact on the company's proposed plans. Under the terms and conditions of the franchise agreement, this entitles the company to surrender its franchise.
Sempra Atlantic Gas was awarded the natural gas distribution franchise in December 1999. After two years of continued construction delays, the company said it now has no option but to take this action.
Sempra Energy's investment in the natural gas distribution project to date is approximately $35 million. The company expects to recover a portion of the investment. Even with a third-quarter charge for costs expected to be unrecovered, Sempra Energy continues to project earnings per share for 2001 of approximately $2.50.
Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500 energy services holding company with annualized 2001 revenues of about $11 billion. Through its eight principal subsidiaries -- Southern California Gas Company, San Diego Gas & Electric, Sempra Energy Solutions, Sempra Energy Trading, Sempra Energy International, Sempra Energy Resources, Sempra Communications and Sempra Energy Financial -- the Sempra Energy companies' 12,000 employees serve more than 9 million customers in the United States, Europe, Canada, Mexico, South America and Asia.
This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995. When the company uses words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "should" or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. 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: national, international, regional and local economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources and the Federal Energy Regulatory Commission; capital market conditions, inflation rates and interest rates; energy markets, including the timing and extent of changes in commodity prices; weather conditions; business, regulatory and legal decisions; the pace of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; and other uncertainties, all of which are difficult to predict and many of which are beyond the company's control. These risks and uncertainties are further discussed in the company's reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov.
Sempra Energy Solutions, Sempra Energy Trading, Sempra Energy International, Sempra Energy Resources and Sempra Energy Financial are not the same companies as the utilities, SDG&E/SoCalGas, and are not regulated by the California Public Utilities Commission.