DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
 9 Months Ended
Sep. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Commodity Derivative Volumes Table
We summarize net energy derivative volumes at September 30, 2016 and December 31, 2015 as follows:
NET ENERGY DERIVATIVE VOLUMES
(Quantities in millions)
Segment and Commodity
Unit of measure
 
September 30,
2016
 
December 31,
2015
California Utilities:
 
 
 
 
 
SDG&E:
 
 
 
 
 
Natural gas
MMBtu(1)
 
56

 
70

Electricity
MWh(2)
 
4

 
1

Congestion revenue rights
MWh
 
46

 
36

SoCalGas – natural gas
MMBtu
 
2

 
1

 
 
 
 
 
 
Energy-Related Businesses:
 
 
 
 
 
Sempra Natural Gas – natural gas
MMBtu
 
35

 
43

(1)
Million British thermal units
(2)
Megawatt hours
Notional Amounts of Interest Rate Derivatives Table
At September 30, 2016 and December 31, 2015, the net notional amounts of our interest rate derivatives, excluding joint ventures, were:
INTEREST RATE DERIVATIVES
(Dollars in millions)
 
September 30, 2016
 
December 31, 2015
 
Notional debt
 
Maturities
 
Notional debt
 
Maturities
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Cash flow hedges(1)(2)
$
753

 
2016-2028

 
$
384

 
2016-2028
Fair value hedges
—

 
—

 
300

 
2016
SDG&E:
 
 
 
 
 
 
 
Cash flow hedge(1)
307

 
2016-2019

 
315

 
2016-2019
(1)
Includes Otay Mesa VIE. All of SDG&E’s interest rate derivatives relate to Otay Mesa VIE.
(2)
At September 30, 2016, includes GdC, which was previously a joint venture and excluded from this table.
At September 30, 2016 and December 31, 2015, the net notional amounts of our foreign currency derivatives, excluding joint ventures, were:
FOREIGN CURRENCY DERIVATIVES
(Dollars in millions)
 
September 30, 2016
 
December 31, 2015
 
Notional amount
 
Maturities
 
Notional amount
 
Maturities
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Cross-currency swaps
$
408

 
2016-2023
 
$
408

 
2016-2023

Other foreign currency derivatives(1)
1,481

 
2016-2018
 
—

 
—

(1)
At September 30, 2016, includes GdC, which was previously a joint venture and excluded from this table.
Derivative Instruments on the Condensed Consolidated Balance Sheets Table
The following tables provide the fair values of derivative instruments on the Condensed Consolidated Balance Sheets at September 30, 2016 and December 31, 2015, including the amount of cash collateral receivables that were not offset, as the cash collateral is in excess of liability positions.
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
 
September 30, 2016
 
Current
assets:
Fixed-price
contracts
and other
derivatives(1)
 
Other
assets:
Sundry
 
Current liabilities:
Fixed-price
contracts
and other
derivatives(2)
 
Deferred
credits
and other
liabilities:
Fixed-price
contracts
and other
derivatives
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate and foreign exchange instruments(3)
$
3

 
$
—

 
$
(20
)
 
$
(224
)
Commodity contracts not subject to rate recovery
—

 
—

 
(4
)
 
—

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange instruments
2

 
—

 
(25
)
 
—

Commodity contracts not subject to rate recovery
122

 
25

 
(128
)
 
(17
)
Associated offsetting commodity contracts
(114
)
 
(15
)
 
114

 
15

Associated offsetting cash collateral
—

 
(2
)
 
17

 
2

Commodity contracts subject to rate recovery
11

 
86

 
(59
)
 
(165
)
Associated offsetting commodity contracts
(5
)
 
(1
)
 
5

 
1

Associated offsetting cash collateral
—

 
—

 
12

 
17

Net amounts presented on the balance sheet
19

 
93

 
(88
)
 
(371
)
Additional cash collateral for commodity contracts
not subject to rate recovery
15

 
—

 
—

 
—

Additional cash collateral for commodity contracts
subject to rate recovery
19

 
—

 
—

 
—

Total(4)
$
53

 
$
93

 
$
(88
)
 
$
(371
)
SDG&E:
 
 
 
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate instruments(3)
$
—

 
$
—

 
$
(13
)
 
$
(18
)
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Commodity contracts subject to rate recovery
8

 
86

 
(55
)
 
(165
)
Associated offsetting commodity contracts
(3
)
 
(1
)
 
3

 
1

Associated offsetting cash collateral
—

 
—

 
12

 
17

Net amounts presented on the balance sheet
5

 
85

 
(53
)
 
(165
)
Additional cash collateral for commodity contracts
not subject to rate recovery
1

 
—

 
—

 
—

Additional cash collateral for commodity contracts
subject to rate recovery
17

 
—

 
—

 
—

Total(4)
$
23

 
$
85


$
(53
)

$
(165
)
SoCalGas:
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Commodity contracts subject to rate recovery
$
3

 
$
—

 
$
(4
)
 
$
—

Associated offsetting commodity contracts
(2
)
 
—

 
2

 
—

Net amounts presented on the balance sheet
1

 
—

 
(2
)
 
—

Additional cash collateral for commodity contracts
not subject to rate recovery
1

 
—

 
—

 
—

Additional cash collateral for commodity contracts
subject to rate recovery
2

 
—

 
—

 
—

Total
$
4

 
$
—

 
$
(2
)
 
$
—

 
(1)
Included in Current Assets: Other for SoCalGas.
(2)
Included in Current Liabilities: Other for SoCalGas.
(3)
Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
(4)
Normal purchase contracts previously measured at fair value are excluded.
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
 
December 31, 2015
 
Current
assets:
Fixed-price
contracts
and other
derivatives(1)
 
Other
assets:
Sundry
 
Current liabilities:
Fixed-price
contracts
and other
derivatives(2)
 
Deferred
credits
and other
liabilities:
Fixed-price
contracts
and other
derivatives
Sempra Energy Consolidated:
 
 
 
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate and foreign exchange instruments(3)
$
4

 
$
1

 
$
(15
)
 
$
(156
)
Commodity contracts not subject to rate recovery
13

 
—

 
—

 
—

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Commodity contracts not subject to rate recovery
245

 
32

 
(239
)
 
(21
)
Associated offsetting commodity contracts
(232
)
 
(20
)
 
232

 
20

Associated offsetting cash collateral
(6
)
 
—

 
4

 
—

Commodity contracts subject to rate recovery
28

 
49

 
(61
)
 
(64
)
Associated offsetting commodity contracts
(2
)
 
(2
)
 
2

 
2

Associated offsetting cash collateral
—

 
—

 
28

 
26

Net amounts presented on the balance sheet
50

 
60

 
(49
)
 
(193
)
Additional cash collateral for commodity contracts
not subject to rate recovery
2

 
—

 
—

 
—

Additional cash collateral for commodity contracts
subject to rate recovery
28

 
—

 
—

 
—

Total(4)
$
80

 
$
60

 
$
(49
)
 
$
(193
)
SDG&E:
 
 
 
 
 
 
 
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate instruments(3)
$
—

 
$
—

 
$
(14
)
 
$
(23
)
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Commodity contracts not subject to rate recovery
—

 
—

 
(1
)
 
—

Associated offsetting cash collateral
—

 
—

 
1

 
—

Commodity contracts subject to rate recovery
27

 
49

 
(60
)
 
(64
)
Associated offsetting commodity contracts
(2
)
 
(2
)
 
2

 
2

Associated offsetting cash collateral
—

 
—

 
28

 
26

Net amounts presented on the balance sheet
25

 
47

 
(44
)
 
(59
)
Additional cash collateral for commodity contracts
not subject to rate recovery
1

 
—

 
—

 
—

Additional cash collateral for commodity contracts
subject to rate recovery
27

 
—

 
—

 
—

Total(4)
$
53

 
$
47

 
$
(44
)
 
$
(59
)
SoCalGas:
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Commodity contracts not subject to rate recovery
$
—

 
$
—

 
$
(1
)
 
$
—

Associated offsetting cash collateral
—

 
—

 
1

 
—

Commodity contracts subject to rate recovery
1

 
—

 
(1
)
 
—

Net amounts presented on the balance sheet
1

 
—

 
(1
)
 
—

Additional cash collateral for commodity contracts
subject to rate recovery
1

 
—

 
—

 
—

Total
$
2

 
$
—

 
$
(1
)
 
$
—

(1) Included in Current Assets: Other for SoCalGas.
(2) Included in Current Liabilities: Other for SoCalGas.
(3) Includes Otay Mesa VIE. All of SDG&E’s amounts relate to Otay Mesa VIE.
(4) Normal purchase contracts previously measured at fair value are excluded.

Fair Value Hedge Impact on the Condensed Consolidated Statements of Operations Table
The effects of derivative instruments designated as hedges on the Condensed Consolidated Statements of Operations and in OCI and AOCI for the three months and nine months ended September 30 were:
FAIR VALUE HEDGE IMPACTS
(Dollars in millions)
 
 
 
 
 
 
 
Pretax gain (loss) on derivatives recognized in earnings
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
Location
 
2016
 
2015
 
2016
 
2015
Sempra Energy Consolidated:
 
 
 
 
 
 
 
 
 
Interest rate instruments
Interest Expense
 
$
—

 
$
1

 
$
3

 
$
5

Interest rate instruments
Other Income, Net
 
—

 
—

 
(2
)
 
(2
)
Total(1)
 
 
$
—

 
$
1

 
$
1

 
$
3

(1)
There was no hedge ineffectiveness in either the three months or nine months ended September 30, 2016 or 2015. All other changes in the fair value of the interest rate swap agreements are exactly offset by changes in the fair value of the underlying long-term debt and are recorded in Other Income, Net.
Cash Flow Hedge Impact on the Condensed Consolidated Statements of Comprehensive Income Table
CASH FLOW HEDGE IMPACTS
(Dollars in millions)
 
Pretax gain (loss)
recognized in OCI
 
 
 
Pretax (loss) gain reclassified
from AOCI into earnings
 
Three months ended September 30,
 
 
 
Three months ended September 30,
 
2016
 
2015
 
Location
 
2016
 
2015
Sempra Energy Consolidated:
 
 
 
 
 
 
 
 
 
Interest rate and foreign
exchange instruments(1)
$
(16
)
 
$
(10
)
 
Interest Expense
 
$
(4
)
 
$
(5
)
Interest rate instruments
17

 
(134
)
 
Equity Earnings,
Before Income Tax
 
(3
)
 
(3
)
Interest rate and foreign
exchange instruments
—

 
—

 
Remeasurement of Equity
Method Investment
 
(7
)
 
—

Interest rate and foreign
exchange instruments
13

 
—

 
Equity Earnings,
Net of Income Tax
 
2

 
—

Commodity contracts not subject
to rate recovery
2

 
6

 
Revenues: Energy-
Related Businesses
 
—

 
3

Total(2)
$
16

 
$
(138
)
 
 
 
$
(12
)
 
$
(5
)
SDG&E:
 
 
 
 
 
 
 
 
 
Interest rate instruments(1)(2)
$
2

 
$
(4
)
 
Interest Expense
 
$
(3
)
 
$
(3
)
SoCalGas:
 
 
 
 
 
 
 
 
 
Interest rate instruments(2)
$
—

 
$
—

 
Interest Expense
 
$
(1
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30,
 
 
 
Nine months ended September 30,
 
2016
 
2015
 
Location
 
2016
 
2015
Sempra Energy Consolidated:
 
 
 
 
 
 
 
 
 
Interest rate and foreign
exchange instruments(1)
$
(26
)
 
$
(22
)
 
Interest Expense
 
$
(11
)
 
$
(14
)
Interest rate instruments
(190
)
 
(123
)
 
Equity Earnings,
Before Income Tax
 
(8
)
 
(9
)
Interest rate and foreign
exchange instruments
—

 
—

 
Remeasurement of Equity
Method Investment
 
(7
)
 
—

Interest rate and foreign
exchange instruments
(20
)
 
—

 
Equity Earnings,
Net of Income Tax
 
(4
)
 
—

Commodity contracts not subject
to rate recovery
(2
)
 
6

 
Revenues: Energy-
Related Businesses
 
7

 
10

Total(2)
$
(238
)
 
$
(139
)
 
 
 
$
(23
)
 
$
(13
)
SDG&E:
 
 
 
 
 
 
 
 
 
Interest rate instruments(1)(2)
$
(5
)
 
$
(9
)
 
Interest Expense
 
$
(9
)
 
$
(9
)
SoCalGas:
 
 
 
 
 
 
 
 
 
Interest rate instruments(2)
$
—

 
$
—

 
Interest Expense
 
$
(1
)
 
$
—

(1)
Amounts include Otay Mesa VIE. All of SDG&E’s interest rate derivative activity relates to Otay Mesa VIE.
(2)
Amounts include negligible hedge ineffectiveness in the three months and nine months ended September 30, 2016 and 2015.
Undesignated Derivative Impact on the Condensed Consolidated Statements of Operations Table
The effects of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Operations for the three months and nine months ended September 30 were:
UNDESIGNATED DERIVATIVE IMPACTS
(Dollars in millions)
 
 
Pretax (loss) gain on derivatives recognized in earnings
 
 
Three months ended
September 30,
 
Nine months ended
September 30,
 
Location
2016
 
2015
 
2016
 
2015
Sempra Energy Consolidated:
 
 
 
 
 
 
 
 
Foreign exchange instruments
Other Income, Net
$
(11
)
 
$
(4
)
 
$
(23
)
 
$
(7
)
Foreign exchange instruments
Equity Earnings,
Net of Income Tax
1

 
(3
)
 
3

 
(4
)
Commodity contracts not subject
to rate recovery
Revenues: Energy-Related
Businesses
3

 
21

 
(26
)
 
33

Commodity contracts not subject
to rate recovery
Operation and Maintenance
—

 
(2
)
 
1

 
(1
)
Commodity contracts subject
to rate recovery
Cost of Electric Fuel
and Purchased Power
(118
)
 
(27
)
 
(90
)
 
(100
)
Commodity contracts subject
to rate recovery
Cost of Natural Gas
—

 
—

 
(2
)
 
1

Total
 
$
(125
)
 
$
(15
)
 
$
(137
)
 
$
(78
)
SDG&E:
 
 
 
 
 
 
 
 
Commodity contracts subject
to rate recovery
Operation and Maintenance
$
—

 
$
(1
)
 
$
—

 
$
(1
)
Commodity contracts subject
to rate recovery
Cost of Electric Fuel
and Purchased Power
(118
)
 
(27
)
 
(90
)
 
(100
)
Total
 
$
(118
)
 
$
(28
)
 
$
(90
)
 
$
(101
)
SoCalGas:
 
 
 
 
 
 
 
 
Commodity contracts not subject
to rate recovery
Operation and Maintenance
$
—

 
$
(1
)
 
$
—

 
$
—

Commodity contracts subject
to rate recovery
Cost of Natural Gas
—

 
—

 
(2
)
 
1

Total
 
$
—

 
$
(1
)
 
$
(2
)
 
$
1