SAN DIEGO, December 19, 2006 -- The following statement was issued today by Javade Chaudhri, executive vice president and general counsel of Sempra Energy, regarding the Ninth Circuit Court of Appeals decision:

        Today the Ninth Circuit Court of Appeals reversed a June 2003 Federal Energy Regulatory Commission (FERC) order,  which upheld certain long-term power contracts, including one signed by Sempra Generation with the California Department of Water Resources (CDWR),  during the 2000-01 energy crisis.

        The FERC has been instructed to reconsider the appropriate standard to apply in its review of the contracts, and may ultimately apply a more rigorous review.  We are still reviewing the court’s decision and whether we will seek further appellate review of this ruling.  If no further appellate review occurs, the case will be remanded back to FERC for additional proceedings in accordance with the Ninth Circuit’s decision. 

        We believe the contracts were and are beneficial to the State of California and should be upheld under whatever standard the FERC ultimately applies.  

        The 10-year contract with the CDWR, signed May 4, 2001, provides California with up to 1,900 megawatts (MW) of electricity. Sempra Generation has invested more than $1.3 billion in constructing more than 2,000 MW to help meet California’s current and future energy needs.

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This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation 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: local, regional, national and international 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, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company.  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 and on the company’s Web site, www.sempra.com.

Sempra Generation is not the same company as the utilities, SDG&E or SoCalGas, and is not regulated by the California Public Utilities Commission.