Summary: Southern California Gas Co.

Low-risk local gas distribution company (LDC) operations offer a stable base of earnings and cash flow Good mix of mostly residential and commercial customers Supportive regulatory environment that the company manages better than its peers Credit measures are solidly in the range for the financial risk profile Elevated capital spending suppress credit measures but should subside "Adequate" liquidity The stable rating outlook on Sempra Energy and subsidiaries reflects our view that credit measures will remain in the range for its financial risk profile in the near term and that cash flows will be highly predictable. Ratings stability is also based on our expectation that the company's strategic growth plans will continue to focus on the regulated operations. We could lower

Summary