San Diego-based Sempra Energy indicated Monday it was not surprised by a downgrade from Moody’s Investors Service for it and one of its two major utilities, San Diego Gas and Electric Co. Sempra pointed out that Moody’s maintained the “stable” outlook and an investment-grade level rating, and the company attributed the action to the general energy sector’s troubles, rather than weaknesses in its businesses or strategies.

The company doesn’t expect the other rating agencies to follow suit. Standard and Poor’s last Friday said none of its ratings for SDG&E would change in the wake of a Sept. 24 California regulatory commission administrative law judge’s recommendation that $130 million in utility profits made last year from power-purchase contracts be applied to the company’s $300-million-plus under-collection for past wholesale power costs.

“All three rating agencies have given Sempra a stable outlook, and we continue to maintain strong liquidity with cash and committed credit lines in excess of $2 billion,” a spokesperson said. “We can’t predict what the rating agencies will do, but we are maintaining an ongoing dialogue with them.” Sempra recently had another meeting with Moody’s.

For the corporation, Moody’s said the action “reflects the continuing shift in the company’s business mix, which includes a greater reliance on non-regulated cash flows, including cash flows from its trading and marketing, international and wholesale power businesses.” The rating agency noted that it considers the cash flows from the non-utility operations — particularly trading — to be “significantly more volatile than the cash flow historically generated from regulated businesses” at SoCalGas and SDG&E.

However, for SDG&E, the rating change reflects “the still challenging and less predictable regulatory environment that exists for the electric business within the state of California.” It noted that SDG&E’s uncollected past power costs continue to decline (now about $318 million) and state legislation gives them greater assurance of collecting all of their wholesale power costs going forward, what Moody’s called “a number of unresolved state and federal regulatory and marketplace issues remain for all electric participants” in the state. Thus, it thinks financial results will be more consistent with its new lowered rating.

On the plus side, Moody’s noted that SDG&E is scheduled to resume its “net short” wholesale power buying from the state beginning next year, and that should be “manageable” for the utility, given it represents about 5% of its total power needs. “SDG&E’s liquidity appears to be strong, with no short-term debt and sizeable cash balances at the utility,” Moody’s said in its announcement.

Sempra’s merchant operations, on the other hand, have resulted in “greater near-term reliance on external financing” to take care of some acquisitions earlier in the year and the power plant construction the company is committed to by its $6.6 billion contract with the state Department of Water Resources (DWR).

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