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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): November 25, 1997
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Exact name of
Commission Registrant IRS Employer
File as specified State of Identification
Number in its charter Incorporation Number
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1-11439 ENOVA CORPORATION California 33-0643023
1-3779 SAN DIEGO GAS &
ELECTRIC COMPANY California 95-1184800
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101 ASH STREET, SAN DIEGO, CALIFORNIA 92101
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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 5. Other Events
San Diego Gas & Electric (SDG&E), the principal subsidiary of Enova
Corporation, has announced that its board of directors has approved plans
to auction SDG&E's fossil power plants -- the South Bay plant in Chula
Vista, California and the Encina plant in Carlsbad, California -- and its
combustion turbines, as well as its 20-percent interest in the San Onofre
Nuclear Generating Station (SONGS) south of San Clemente, California, and
its portfolio of long-term power contracts. The plants (including SDG&E's
share in the case of SONGS), have a net book value of $900 million ($250
million for fossil and $650 million for SONGS) and a generating capacity
of 2,400 megawatts. The press release describing the announcement is
attached as Exhibit 99.1.
The decision will enable SDG&E to continue to concentrate its
business on the distribution and transmission of electricity and natural
gas, instead of electric generation, as California opens its electric
utility industry to competition in January 1998. Any proceeds from the
auction will be applied directly to SDG&E's transition costs. SDG&E plans
to file with the CPUC in December 1997 for its approval of the auction
plan. The sale of the plants and contracts is expected to be completed
by the end of 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release dated November 25, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ENOVA CORPORATION
and
SAN DIEGO GAS & ELECTRIC COMPANY
(Registrants)
Date: November 26, 1997 By: /s/ F.H. Ault
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F.H. Ault
Vice President and Controller
Exhibit 99.1
For more information contact:
Doug Kline or Dave Kusumoto (619) 696-4292
After-hours pager: (619) 526-9555
Web Site: http://www.sdge.com
SAN DIEGO GAS & ELECTRIC TO AUCTION POWER PLANTS,
OTHER GENERATING ASSETS
SAN DIEGO, Nov. 25, 1997 -- San Diego Gas & Electric (SDG&E), the
principal subsidiary of Enova Corporation, today announced plans to auction
its fossil power plants -- the South Bay plant in Chula Vista, Calif., the
Encina plant in Carlsbad, Calif., and its combustion turbines -- as well as
its 20-percent interest in the San Onofre Nuclear Generating Station (SONGS)
and its portfolio of long-term power contracts.
The decision, which was approved by SDG&E's board of directors late
yesterday, comes as California prepares to open up its electric utility
industry to competition Jan. 1, 1998. Electric generation will be
deregulated and the state's investor-owned utilities, SDG&E, PG&E and
Southern California Edison, will transition to being regulated distributors
of power within their current service territories.
"For more than a decade, SDG&E has pursued a business strategy that
concentrates on the distribution and transmission of power, instead of
generation, so the sale of our power plants is a natural evolution of our
business," said Donald E. Felsinger, president and chief executive officer
of SDG&E. "Selling off our generation assets will help expedite the
development of competition in California's electric generation market,
benefitting all of our customers."
- more -
The electric utilities' power plants are among those deemed by
state regulators to represent "transition costs," or uneconomic investments
that the utilities must recover during a four-year transition period to
competition in California. Any proceeds from the sale of the plants and
other generating assets will go directly to pay down SDG&E's transition
costs.
Of SDG&E's current asset base, more than twice as much is invested in
distribution and transmission facilities as is invested in generation. The
utility currently purchases 65 percent of the power it delivers to its
customers and generates only 35 percent.
Felsinger said that other companies in the free market -- not bound by
the rules that apply to the state's regulated utilities -- will have a much
greater opportunity to provide competitive generation services to customers
with SDG&E's plants.
Potential buyers of the plants and power contracts are likely to
include independent power producers, power marketers, oil and natural gas
companies, and unregulated affiliates of electric utilities.
The first step in the process of selling the plants will be a filing
with the California Public Utilities Commission (CPUC) next month. Once
SDG&E receives approval from the CPUC, the utility will proceed with an
auction of the generating assets and power contracts. The CPUC has final
approval over any transaction. The sale of the plants and contracts is
expected to be completed by the end of 1998.
The Chula Vista and Carlsbad plants together have 285 employees and,
along with the combustion turbines, have a generating capacity of
approximately 2,000 megawatts. California's electric deregulation law,
AB 1890, requires that any purchaser of the plants contract with the utility
to operate and maintain them for at least two years after the sale
transaction is completed.
SDG&E also will auction up to 200 megawatts of Qualifying Facilities'
contracts and 175 megawatts of other power contracts.
-more -
San Diego Gas & Electric is the primary subsidiary of Enova Corporation
(NYSE: ENA), the parent company of the investor-owned utility and six other
U.S.-based subsidiaries -- Enova Energy, Enova International, Enova
Technologies, Enova Financial, Califia and Pacific Diversified Capital.
SDG&E serves 1.2 million electric customers in San Diego and southern Orange
counties and 710,000 natural gas customers in San Diego County.
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