Sempra Energy Trading, the wholesale energy marketing unit ofSempra Energy, announced a two-year electric and gas managementagreement with the city of Burbank, CA, yesterday. The agreementmarks a continuation of the type of success that helped turnSempra’s unregulated operations from unprofitable in 1998 to veryprofitable in 1999.

Under the terms of the deal, Sempra Energy Trading will identifyways that Burbank’s Public Service Department (PSD) can save moneyfor its 55,000 residential and commercial customers over the nexttwo years. The company will review the city’s energy portfolio ofpower supply facilities, natural gas assets and energy contracts,and develop solutions to manage existing and underutilized energyassets more effectively. Sempra will have control over electric andgas purchases under the contract.

“Sempra Energy Trading’s depth of asset and risk managementexperience will enable the city and our residential and commercialcustomers, to reap the rewards of new energy marketplaceefficiencies,” said Fred Fletcher, assistant general manager forthe city of Burbank. “It is our goal to benefit from the changesbrought by deregulation in the California energy market. In SempraEnergy Trading, we found a partner that was willing to take anon-traditional approach to the market and utilize our assets tothe fullest advantage.”

Other prominent Sempra Energy Trading customers include the Cityof Colton, CA, California’s Department of General Services andConnecticut Gas Co. For 1999, Sempra Energy Trading had a netincome of $32 million, which is a 37% rise from the previous year’sresults. This, along with strong performances from Sempra EnergyInternational, were two of the main reasons why the parentcompany’s non-utility operations posted a net income of $15million, compared to a net loss of $34 million in 1998.

“We’ve successfully delivered on our primary performanceobjectives since Sempra Energy’s creation 18 months ago,” saidStephen L. Baum, COO Sempra Energy, when Sempra reported itsearnings last month. “We exceeded our earnings goal in 1999 andachieved profitability in our unregulated businesses one year aheadof target. We’re on track to meet our objective to generateone-third of our earnings from these units by the end of 2003.We’re particularly pleased with the progress of our energy tradingand our international businesses.”

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