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(As filed November 23, 1998)
File No. 70-9333
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM U-1/A
Amendment No. 2
to
JOINT APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Sempra Energy Frontier Pacific, Inc.
101 Ash Street 555 West Fifth Street,
San Diego, California 92101 Suite 2900
Los Angeles, California
90013-1001
(Names of companies filing this statement and
addresses of principal executive offices)
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None
(Name of top registered holding company parent)
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Richard D. Farman Stephen L. Baum
President and Chief President and Chief
Executive Officer Executive Officer
Pacific Enterprises Enova Corporation
555 West Fifth Street, 101 Ash Street
Suite 2900 San Diego, California 92101
Los Angeles, California
90013-1001
(Names and addresses of agents for service)
The Commission is requested to send copies of all notices, orders
and communications in connection with this Application or
Declaration to:
Donald C. Liddell, Esq. Richard M. Farmer, Esq.
David L. Huard, Esq. Andrew F. MacDonald, Esq.
Pacific Enterprises William C. Weeden
633 West Fifth Street, Thelen Reid & Priest LLP
Suite 5200 40 West 57th Street
Los Angeles, California 90071 New York, New York 10019
The Application or Declaration heretofore filed in this
proceeding, as amended by Amendment No. 1, is hereby further
amended as follows:
1. The first paragraph of Item 3.1 is hereby amended and
restated in its entirety to read as follows:
"3.1 General Overview of Applicable Statutory Provisions.
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Because Sempra is an exempt holding company, it will require
approval of the SEC under Sections 9(a)(2) and 10 of the Act to
acquire, directly or indirectly, 5% or more of the voting
securities of Frontier, which will become a "gas-utility company"
within the meaning of Section 2(a)(4) of the Act on or after the
date on which it commences making residential and small
commercial sales of gas. Further, following the acquisition of
10% or more of Frontier's voting securities, and the commencement
by Frontier of residential and small commercial sales, Frontier
will become a gas-utility subsidiary company of both Sempra and
Frontier Pacific.
As indicated, Sempra and its subsidiary companies, as such,
are exempt, by order, from all provisions of the Act, except
Section 9(a)(2), pursuant to Section 3(a)(1). Sempra requests
the Commission to find that its current exemption will not be
affected by reason of its indirect acquisition of the voting
securities of Frontier. In support of such request, Sempra
states that (1) Sempra and each of its current public-utility
subsidiaries (i.e., SoCalGas and SDG&E) are predominantly
intrastate in character and carry on their public utility
operations substantially in California, the state in which Sempra
and each such subsidiary are incorporated, and will remain
predominantly intrastate in character even after acquiring
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Frontier, and (2) Sempra will not derive "any material part
of its income" from Frontier.
Frontier Pacific, a North Carolina corporation, also
requests an order of the Commission pursuant to Section 3(a)(1)
of the Act granting it and each of its subsidiary companies, as
such, an exemption from all provisions of the Act, except Section
9(a)(2). In support of such request, Frontier Pacific states
that Frontier will be its sole public utility subsidiary and that
the utility operations of Frontier are expected to be confined
solely to North Carolina, the state in which both Frontier
Pacific and Frontier are organized."
2. The second paragraph of Item 3.3.B.2 ("Coordinated
Operations of Gas Properties") is hereby amended and restated in
its entirety to read as follows:
"Sempra Trading also sells significant volumes of gas to
SoCalGas and SDG&E and to their respective transportation-only
customers, most of which it purchases in the San Juan and
Permian Basins. Since January 1, 1997, Sempra Trading (and its
predecessor, AIG Trading Corp.) has sold approximately 22 million
MMBtu of gas directly to SoCalGas, and several times that amount
to transportation-only customers of SoCalGas. In the six months
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1. Virtually all (99%) of the Sempra system's net utility
plant and utility customers are located in California, and less
than 1% of its utility revenues are derived from sales of
electricity and gas outside California. Taking into account
Frontier's projected net utility plant, customers and sales in
North Carolina, the relevant percentages of Sempra's overall
utility operations outside California would not increase
meaningfully.
2. Under the Operating Agreement, Frontier Pacific will
have a 50% economic interest in Frontier. Based on current
projections, the proportionate share of Frontier's income
attributable to Sempra is expected to account for far less than
1% of the consolidated income of Sempra on a pro forma basis.
3. In 1997, 65% of all gas delivered on the SoCalGas
system was customer-owned. SoCalgas only provides the
transportation service for these customers. Sempra Trading,
which is based in San Diego, has aggressively pursued this market
segment.
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ended June 30, 1998, Sempra Trading sold approximately 110 MMBtu
of gas to SDG&E. Although these amounts account for only a small
percentage of the total through-put on the SoCalGas system
(approximately 930 million MMBtu on 1997) and of the total gas
purchased by SDG&E for both gas distribution and electric
generation (approximately 98 million MMBtu in 1997), they
represent, in the aggregate, several times the estimated volumes
of gas that will be required by Frontier when its system is fully
developed (projected to be less than 4 million MMBtu in 2000).
In the future, Sempra Trading will be able to achieve substantial
economies by coordinating gas purchases in the two supply basins
to meet the combined requirements of its three public utility
affiliates, as well as of its other customers. Further, SoCalGas
and SDG&E will continue to purchase significant volumes of gas
from Sempra Trading to the extent that Sempra Trading is able to
supply such gas at the lowest price then available to SoCalGas
and SDG&E in the marketplace.
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, the undersigned companies have
duly caused this statement filed herein to be signed on their
behalf by the undersigned thereunto duly authorized.
SEMPRA ENERGY
By: /s/ Warren I. Mitchell
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Name: Warren I. Mitchell
Title: Group President - Regulated
Business Units
FRONTIER PACIFIC, INC.
By: /s/ Eric B. Nelson
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Name: Eric B. Nelson
Title: President
Date: November 23, 1998
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