...Solid Financial Profile: San Diego Gas & Electric Company (SDG&E) produced FFO fixed- charge coverage and FFO-adjusted leverage of 6.8x and 3.1x, respectively, for the LTM ended March 31, 2015. Fitch Ratings projects FFO fixed-charge coverage to average 6.4x and FFO- adjusted leverage to average 3.7x from 2015 to 2018. Supportive Regulatory Framework: California's utility regulations include pre-approval of capital investments, bifurcation of general rate case (GRC) and cost-of-capital proceedings, forward test years, revenue decoupling, and use of balancing accounts to manage cost fluctuations and reduce regulatory lag. By 2019, 50% of SDG&E's rate base will be regulated by the Federal Energy Regulatory Commission (FERC). Fitch views FERC regulation favorably despite expecting allowed returns on equity (ROEs) to continue to decline. General Rate Case: SDG&E filed its 2016 GRC in 2014, requesting $111 million in rate increases with a 2016 test year, incorporating the existing 10.3% ROE...
