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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report
(Date of earliest event reported): May 21, 1999
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SAN DIEGO GAS & ELECTRIC COMPANY
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(Exact name of registrant as specified in its charter)
CALIFORNIA 1-3779 95-1184800
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(State of incorporation (Commission (I.R.S. Employer
or organization) File Number) Identification No.
8326 CENTURY PARK COURT, SAN DIEGO, CALIFORNIA 92123
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(Address of principal executive offices) (Zip Code)
(619) 696-2000
Registrant's telephone number, including area code-------------------
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(Former name or former address, if changed since last report.)
FORM 8-K
Item 2. Acquisition or Disposition of Assets
On May 21, 1999 San Diego Gas & Electric Company (SDG&E) completed
the sale of its 965-megawatt Encina Power Plant and 17 combustion-
turbine generators to Dynegy Inc. and NRG Energy Inc. for $356
million in cash. The power plant began operating in Carlsbad,
California, in 1954 and consists of five steam-generating units and
an on-site combustion turbine. Other assets sold along with the
plant are substantial acreage including the outer and middle
sections of the Agua Hedionda Lagoon.
Previously, on April 23, 1999, SDG&E completed the sale of its 693-
megawatt South Bay Power Plant to the San Diego Unified Port
District for $110 million, which the Port District is financing
through revenue bonds.
SDG&E will operate and maintain both facilities for the new owners
for the next two years. The press releases announcing the
completion of these sales are attached as Exhibits 99.1 and 99.2.
Item 7. Financial Statements And Exhibits.
(c) Exhibits
99.1 Press release dated May 21, 1999 announcing the
completion of the sale of Encina Power Plant and
combustion turbines to Dynegy, NRG Energy.
99.2 Press release dated April 23, 1999 announcing the
completion of the sale of South Bay Power Plant
to the San Diego Unified Port District.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SAN DIEGO GAS & ELECTRIC COMPANY
(Registrant)
Date: May 21, 1999 By: /s/ E.A. Guiles
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E.A. Guiles
President
EXHIBIT 99.1
NEWS
Media Contacts: John Sousa Ed Van Herik
Dynegy SDG&E
(713) 507-3936 (877) 866-2066
www.dynegy.com www.sdge.com
Trudy Marshall
NRG Energy
(612) 373-5410
Investor Relations
Contacts: Margaret Nollen Clem Teng
Dynegy Inc. SDG&E
(713) 767-8707 (877) 736-7727
SDG&E COMPLETES SALE OF ENCINA POWER
PLANT AND COMBUSTION TURBINES
TO DYNEGY, NRG ENERGY
SAN DIEGO, May 21, 1999 -- San Diego Gas & Electric (SDG&E)
today completed the sale of its 965-megawatt Encina Power Plant in
Carlsbad and 253 megawatts (MW) of combustion turbine facilities in
San Diego County to Dynegy Inc. and NRG Energy Inc.
Dynegy and NRG Energy jointly paid $356 million in cash to
acquire both the plant and 17 combustion-turbine generators, which
are used during times of peak electricity demand. Dynegy will
provide fuel-management services and market energy out of the Encina
Power Plant and combustion turbines for the partnership. NRG Energy
will manage the operation of the power generation assets out of its
new San Diego office.
"The sale of these two San Diego power plants is enabling us to
move to a competitive marketplace for the commodity of electricity
two-and-a-half years sooner than expected, a step that will benefit
both our shareholders and customers," said Edwin A. Guiles, president
of SDG&E. "The sale also allows us to focus more on the future of
SDG&E, on becoming a world-class energy-delivery company."
Under the terms of the sale, SDG&E will operate and maintain
the facility for the new owners for two years after the sale.
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"The timing of the addition of these assets to our power-
generation franchise enables us to capitalize on the opportunities in
the California power market during the onset of the peak summer
season," said Chuck Watson, chairman and chief executive officer of
Dynegy. "We look forward to a strong long-term relationship with the
Carlsbad community and its residents."
"This Southern California addition to our West Coast portfolio
is an integral part of our strategy to focus on building our core
markets in order to become one of the top players," said David
Peterson, chairman, president and chief executive officer of NRG
Energy. "Consistent with that leadership position, we are committed
to high standards for safety, environmental performance and
reliability for the communities we serve."
The Encina Power Plant began operation in 1954 and was expanded
throughout the 1970s. The facility consists of five steam-generating
units and an on-site combustion turbine. Other assets being sold
along with the plant are substantial acreage including the outer and
middle sections of the Agua Hedionda Lagoon.
Proceeds from the sale of the Encina Power Plant are being used
by SDG&E to pay down the Competition Transition Charge (CTC), now on
customer bills. The CTC is a line item on the bills for all
customers of the state's investor-owned utilities -- SDG&E, Southern
California Edison and Pacific Gas & Electric (PG&E) -- to recover the
cost of past capital investments, including power plants and other
generating assets, made uneconomic by the shift to a competitive
market.
SDG&E has asked the California Public Utilities Commission for
authority to end collection of the majority of its CTC on July 1,
1999, in part because of proceeds from the sale of its power plants.
The sale of SDG&E's South Bay Power Plant in Chula Vista, Calif., to
the San Diego Unified Port District was completed April 23, 1999.
The Encina Power Plant and associated combustion turbines
increase the number of power generation assets owned by Dynegy in
California to 21. In addition to the
El Segundo and Long Beach facilities, Dynegy has natural gas-fired
facilities in Bakersfield, Corona, Crockett, Stockton, and Taft.
Encina and the combustion turbines increase the generating capacity
of Dynegy's California assets to 3,478 MW. The capacity of Dynegy's
31 U.S. generation assets currently operating or under construction
is more than 6,800 gross MW.
- -more-
Dynegy (NYSE: DYN), formerly known as NGC Corp., is one of the
country's leading marketers of energy products and services. The
name Dynegy reflects the company's evolution from a natural gas
marketing company to a dynamic energy company with a fully integrated
energy network to meet the growing challenges of the energy market of
the future. Through its leadership position in gathering,
processing, transportation, independent power generation, and
marketing of energy, the company provides energy solutions to its
customers located primarily in North America and the United Kingdom.
NRG is one of the world's leading independent power producers,
specializing in the development, construction, operation, maintenance
and ownership of low-cost, environmentally sensitive power plants.
Established in 1989, NRG has a high quality portfolio of projects in
the United States, Europe, the Pacific Rim, and Latin America. NRG
is involved in over 16,000 MW of projects utilizing diverse fuel
types including natural and landfill gas, hydro, and solid fuels such
as coal, lignite, biomass and refuse-derived fuel.
San Diego Gas & Electric (SDG&E) is a public utility that
provides service to
3 million consumers through 1.2 million electric meters and 720,000
natural gas meters in San Diego and southern Orange counties. SDG&E
is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy
services holding company based in San Diego.
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EXHIBIT 99.2
San Diego Unifed Port District, SDG&E complete South Bay power plant
sale
Contacts:
Doug Kline/Ed Van Herik Rita Vandergaw/Diana Lucero
SDG&E San Diego Unified Port District
(877) 866-2066 (619) 686-6462
SAN DIEGO, April 23, 1999 -- San Diego Gas & Electric (SDG&E)
today officially completed the sale of its South Bay Power Plant to the
San Diego Unified Port District.
The sale, which was first announced Sept. 17, 1998, clears the way
for the Port District to become the new owner of the 693-megawatt,
natural gas-fired power plant, which has been in operation in Chula
Vista, Calif., since 1960. Duke South Bay, a subsidiary of Duke Energy
Power Services, will manage the plant for the Port District and SDG&E
will continue to operate the facility for the next two years, as
mandated by state law.
"The South Bay Power Plant has served San Diego's electricity
needs successfully for four decades, and we will ensure that the
transition to its new owner, the Port District, is a smooth one," said
Edwin A. Guiles, president of SDG&E. "As operators of the plant, SDG&E
will continue to provide safe and reliable electric service for the
next two years under its new manager, Duke South Bay. This really is a
win-win situation for SDG&E, the Port District and all of our San Diego
customers."
The Port District is financing the $110 million purchase of the
plant through the issuance of revenue bonds, and SDG&E is donating
excess value of the plant, plus nearly 165 acres of land.
SDG&E's donation encompasses approximately 165 acres, including
the main 116-acre site surrounding the plant, plus an adjacent 33-acre
parcel southeast of the plant that has been previously used for storing
liquefied natural gas, and a 16-acre transmission site to the north of
the plant, between J and F streets in Chula Vista.
The South Bay Power Plant has been designated a "must-run"
generating facility by California's Independent System Operator (ISO),
the state's centralized control center for electricity transmission in
the state. If another electric generating facility is built in the San
Diego region, this must-run designation could be removed and the plant
decommissioned.
"The Port's ultimate goal is to decommission the plant and convert
the land to beneficial public uses," said Commissioner David Malcolm,
who spearheaded the Port's power plant purchase.
Proceeds from the sale of the South Bay Power Plant are being used
by SDG&E to pay down the Competition Transition Charge (CTC), now on
customer bills. The CTC is a line item on the bills for all customers
of the state's investor-owned utilities -- SDG&E, Southern California
Edison and Pacific Gas & Electric (PG&E) -- to recover the cost of past
capital investments, including power plants and other generating
assets, made uneconomic by the shift to a competitive market.
SDG&E has asked the California Public Utilities Commission for
authority to end collection of the majority of its CTC on July 1, 1999,
in part because of proceeds from the sale of its power plants. The sale
of SDG&E's Encina Power Plant in Carlsbad, Calif., to Dynegy and NRG
Energy was announced Dec. 14, 1998. That sale is expected to close next
month.
SDG&E is a public utility that provides service to 3 million
consumers through 1.2 million electric meters and 720,000 natural gas
meters in San Diego and southern Orange counties. SDG&E is a subsidiary
of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding
company based in San Diego.
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