The ratings on Southern California Gas Co. (SoCal Gas), a wholly owned subsidiary of Sempra Energy (Sempra), reflect the consolidated profile of Sempra and its other utility subsidiary, San Diego Gas&Electric Co., as well as unregulated ventures that include energy trading, LNG terminals, merchant generation, and energy-related investments in Mexico and South America. Regulation in California, which, among other things, mandates that the utilities maintain a 48% equity layer, provides sufficient insulation to separate modestly the corporate credit ratings of the utilities from those of the parent and unregulated subsidiaries. Overall, we arrive at a consolidated credit profile of 'A-' for the Sempra family, before notching the utilities up by one notch for regulatory insulation and notching the
