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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): March 9, 1998
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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)
Registrants' telephone number, including area code (619) 696-2000
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(Former name or former address, if changed since last report.)
FORM 8-K
Item 5. Other Events
On March 9, 1998 Enova Corporation and Pacific Enterprises reached an agreement
with the U.S. Department of Justice to gain clearance for the Enova - Pacific
Enterprises merger. Under the agreement, Enova has committed to follow through
with its previously announced plans to auction off San Diego Gas & Electric's
two fossil-fuel power plants, located in Carlsbad and Chula Vista, California.
Additionally, the merged company, Sempra Energy, will be required to gain prior
Department of Justice approval before it can acquire or control any existing
California generation facilities in excess of 500 megawatts. The Department of
Justice's approval clears the merger under the notification requirements of the
Hart-Scott-Rodino Antitrust Act.
On March 11, 1998 California Public Utilities Commission (CPUC) Commissioner
Josiah L. Neeper issued an alternate decision to the administrative law judge's
(ALJ) proposed decision issued on February 23, 1998 regarding the Enova -
Pacific Enterprises merger. The alternate decision differs from the ALJ
proposed decision in that the former calls for sharing of net merger synergy
savings between customers and shareholders for a 10-year period, as requested by
Enova and Pacific Enterprises, rather than for a 5-year period as proposed by
the ALJ. Commissioner Neeper's alternate doesn't preclude other commissioners
from issuing their own alternate decisions. The CPUC schedule calls for a
final decision on March 26, 1998 which may be the ALJ proposed decision, the
Neeper alternate, or another decision.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Joint Enova Corporation - Pacific Enterprises News Release concerning the
U.S. Department of Justice Clearance of Enova - Pacific Enterprises Merger.
99.2 Enova Corporation Investor Relations News Release concerning the
alternate decision issued by Commissioner Neeper on the Enova Corporation -
Pacific Enterprises merger.
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
(Registrant)
Date: March 16, 1998 By: /s/ F.H. Ault
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F.H. Ault
Vice President and Controller
and
SAN DIEGO GAS & ELECTRIC COMPANY
(Registrant)
Date: March 16, 1998 By: /s/ F.H. Ault
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F.H. Ault
Vice President, Chief Financial
Officer, Controller and Treasurer
ENOVA CORPORATION PACIFIC ENTERPRISES
NEWS RELEASE
Media Contacts:
Doug Kline Mike Mizrahi
Enova Corporation Pacific Enterprises
(619) 696-4292 (213) 244-3030
Web Page: http://www.enova.com Web page: www.pacent.com
Analyst Contacts:
Mark Fisher Clem Tang
Enova Corporation Pacific Enterprises
(619) 696-4897 (213) 244-3966
ENOVA CORPORATION-PACIFIC ENTERPRISES MERGER
GAINS U.S. DEPARTMENT OF JUSTICE CLEARANCE
SAN DIEGO and LOS ANGELES, March 9, 1998 -- Moving their merger one step
closer to completion, Pacific Enterprises and Enova Corporation today
announced an agreement with the U.S. Department of Justice to gain
clearance for their merger.
"This clearance by the Department of Justice is a key step forward in
the final consummation of our merger," said Richard D. Farman, president
and chief operating officer of Pacific Enterprises. "It speeds the way
for final approval by other regulatory agencies."
The agreement was signed today and will be filed in the U.S. District
Court in Washington. It ends the Department of Justice's review and
clears the merger under the notification requirements of the Hart-Scott-
Rodino Antitrust Improvement Act. Under the agreement, Enova Corporation
has committed to follow through on its previously announced plans to
auction off San Diego Gas & Electric's (SDG&E's) two fossil-fuel power
plants, located in Carlsbad and Chula Vista, Calif. SDG&E is the
principal subsidiary of Enova Corporation.
"Under California's electric industry restructuring, SDG&E and the
state's other electric utilities have been encouraged by regulators to
exit the generation business," said Stephen L. Baum, chairman and chief
executive officer of Enova Corporation. "As a result, we announced in
November 1997 our plans to divest ourselves of SDG&E's generating
assets. The Department of Justice obviously viewed our divestiture plans
as a key issue in gaining accelerated clearance of the merger under the
Hart-Scott-Rodino Act. We have made this commitment and plan to complete
the auction process for our generating assets by the end of this year."
Additionally, as part of the agreement, Sempra Energy -- the company to
be formed by the merger of Enova Corporation and Pacific Enterprises --
must get prior Department of Justice approval to acquire or control any
existing California generation facilities in excess of 500 megawatts.
Sempra Energy still may acquire and operate generation facilities
outside of California or cogeneration or new generation facilities
within California.
In October 1996, Pacific Enterprises and Enova Corporation jointly
announced an agreement to combine their companies. The shareholders of
both companies approved the merger March 11, 1997. The Federal Energy
Regulatory Commission (FERC) conditionally approved the merger on June
25, 1997, and the Nuclear Regulatory Commission approved the merger Aug.
29, 1997. The California State Attorney General's office issued a
favorable advisory opinion on the merger on Nov. 21, 1997. An
administrative law judge with the California Public Utilities Commission
(CPUC) issued a proposed decision approving the merger Feb. 23, 1998.
Final regulatory approvals still must gained from the CPUC, FERC and the
Securities and Exchange Commission. It is anticipated that all
regulatory approvals will be gained and Sempra Energy will be
operational in the summer of 1998.
Enova Corporation (NYSE: ENA), based in San Diego, is a leading energy
management company providing electricity, gas and value-added products
and services in the United States and Mexico. Enova is the parent
company of San Diego Gas & Electric Company (SDG&E), Enova
International, Enova Financial, Califia and Pacific Diversified Capital.
SDG&E has 1.2 million electric meters and 715,000 natural gas meters,
serving 3 million consumers in San Diego and southern Orange counties.
Pacific Enterprises (NYSE: PET) is a Los Angeles-based energy-services
company, whose Southern California Gas Co. unit is the nation's largest
natural gas distributor, with 4.8 million natural gas meters serving 18
million consumers. Pacific Enterprises also has interstate and offshore
natural gas pipelines, centralized heating and cooling facilities and
natural gas distribution operations in Latin America.
Enova Corporation and Pacific Enterprises jointly own Energy Pacific, a
retail energy-services marketing company, and Sempra Energy Trading, a
wholesale energy commodity trading firm.
###
ENOVA CORPORATION
INVESTOR RELATIONS NEWS
March 12, 1998
Alternative Decision Issued by Commissioner Neeper on
Enova Corporation-Pacific Enterprises Merger
Late yesterday, Commissioner Neeper of the California Public
Utilities Commission (CPUC) issued an alternate order, calling for a
10-year timeline for sharing merger synergies. The alternate order
adequately addresses the companies' only major concern over the proposed
decision from the Administrative Law Judge (ALJ), which was the time
period for sharing of synergy savings (five years vs. ten years).
The alternate would change only nine pages of the proposed
decision, retaining the decision's favorable treatment of other issues.
In summary, the alternate recommends five years of savings, a general
rate case or other similar true up, and then five years of upward
adjustments in the revenue requirement. The upward adjustments would
equal 50% of the projected savings for years 6-10, less adjustments for
100% ratepayer and shareholder savings. Specifically, it recommends:
- A 50/50 sharing of the projected $1.1 billion in net savings or
cost avoidances from the merger over 10 years. (Because of
adjustments, customers would receive $557 million and shareholders
would receive $531 million.)
- Costs-to-achieve would be amortized over ten years, in equal
amounts per year.
- Five years (years 1 through 5) of ratepayer credits based on 50%
of the first five years of projected savings (with adjustments),
minus the applicable costs-to-achieve.
- A general rate case or other similar true-up to go into effect
after five years.
- Five years (years 6 through 10) of upward adjustments to the new
revenue requirement, reflecting 50% of projected savings (as
adjusted) and including the applicable costs-to-achieve.
Attached is a table detailing the annual savings. Neeper's
alternate doesn't prevent other commissioners from issuing other
alternate decisions as well. The CPUC schedule calls for a final
decision on March 26, which may be the ALJ proposed decision, the Neeper
alternate, or another decision.