The ratings on Southern California Gas Co. (SoCal Gas) reflect the consolidated profile of Sempra Energy and its subsidiaries, including energy trading, merchant generation, and investments in Mexico and South America. While the unregulated businesses accounted for just 1% of earnings as recently as 1999, Standard&Poor's Ratings Services now considers them core operations of Sempra given their rapid growth and the company's stated goal of an average 50% contribution to its earnings from unregulated ventures by 2004. Sempra's consolidated cash flow interest and debt coverage levels, which stood at 3.8 times (x) and 22.2%, respectively, as of year-end 2001, are appropriate for the increased business risk that the enterprise has assumed. SDG&E, which has remained relatively unscathed during
