The ratings on Southern California Gas Co. (SoCal Gas; A/Stable/A-1) reflect the consolidated credit profile of Sempra Energy (BBB+/Stable/A-2), its utility subsidiaries and unregulated ventures, which include energy trading, merchant generation and energy-related investments in Mexico and South America. At this time, ratings do not reflect Sempra's LNG investments, where Sempra's investment is currently limited to land and permitting expenses. Regulation in California, which, among other things, mandates that the utilities maintain a 48% equity layer, provides sufficient insulation to separate the corporate credit ratings of the utilities from those of the parent and unregulated subsidiaries. SoCal Gas has a very strong business profile on a stand-alone basis. It is the largest gas distribution utility in the country, serving about
