News Release

        SAN DIEGO, May 1, 2003 -- Sempra Energy today reported unaudited first-quarter 2003 earnings of $88 million, or $0.42 per diluted share, compared with $146 million, or $0.71 per diluted share, for the same period of 2002.

        The 2003 first-quarter results reflect the $38 million, or $0.18 per diluted share, negative effects of implementing new accounting principle EITF 02-3. The components of this non-cash reduction in earnings consist of $29 million, or $0.14 per diluted share, reflected as a cumulative-effect adjustment at Dec. 31, 2002, and an additional $9 million, or $0.04 per diluted share, for the first-quarter effect of the change. EITF 02-3 eliminated mark-to-market accounting for certain commodity-trading assets, changing the timing for revenue recognition.

        For comparison purposes with the first quarter 2002, earnings for the first quarter 2003 would have been $126 million, or $0.60 per diluted share, except for the effects of EITF 02-3.

        Revenues for Sempra Energy rose 27 percent to $1.9 billion in the first quarter 2003 from $1.5 billion in the first quarter 2002. Increased revenues during the first quarter this year resulted from higher commodity prices, primarily at Sempra Energy Utilities.

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        "We expect our 2003 earnings per share to be $2.60 to $2.80, excluding the $0.14-per-share cumulative effect of the change in accounting principle," said Stephen L. Baum, chairman, president and chief executive officer of Sempra Energy. "Our California utilities performed well in the first quarter. We also are making progress on several of our key strategic initiatives, especially our expansion into the liquefied natural gas market and bringing new generation facilities online in the Pacific Southwest. Furthermore, we expect our trading business to rebound from a difficult quarter -- as it has done in the past -- and post solid results by year-end."

        Baum said Sempra Energy's liquidity remains strong with more than $2.6 billion in cash and committed credit available at the end of the first quarter 2003. This liquidity position was strengthened in January 2003 through the company's issuance of $400 million of 10-year, 6-percent notes.

         Sempra Energy Utilities contributed $103 million in net income in the first quarter 2003, compared with net income of $113 million in the first quarter last year.

        This reduction in net income was primarily due to the termination at the end of 2002 of sharing in savings resulting from the 1998 merger that formed Sempra Energy.

        SDG&E reported net income in the first quarter 2003 of $45 million, down from $53 million for the same period in 2002. In addition to the smaller impact from merger savings, earnings also decreased due to higher operating and depreciation expenses, partially offset by a gas-procurement award of $4 million after-tax.

        Net income for SoCalGas for the first quarter 2003 was $58 million, compared with $60 million in the same period in 2002.

        Sempra Energy Trading reported a net loss of $18 million for the first quarter of 2003, compared with net income of $42 million in the year-earlier period. The quarter's loss was due to a combination of accounting changes and lower profits from energy trading. For comparison purposes, Sempra Energy Trading's earnings for the quarter would have been $19 million, except for the $37 million cumulative and first-quarter effects of EITF 02-3.

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        Sempra Energy Resources remains on schedule to bring online three new power plants, representing 1,510 megawatts of generation capacity, during May and June 2003, with an additional 625 megawatts being added by the end of this year. Through 2005, an average of 85 percent of Sempra Energy Resources' peak-generating capability is sold forward, which will provide the unit with predictable earnings and cash flow.

        For the first quarter of 2003, Sempra Energy International's net income decreased to $7 million from $8 million during the same quarter in 2002. The reduction in earnings was primarily attributed to decreased operating earnings from Argentina, offset partially by a positive contribution from the Gasoducto Bajanorte natural gas pipeline in northern Mexico.

        In April 2003, Sempra Energy International announced that it had received an environmental permit from Mexico's environmental agency for the Energía Costa Azul liquefied natural gas (LNG) receiving terminal in Baja California, Mexico. The company expects to receive the remaining two permits shortly. Energía Costa Azul will have the capacity to process up to 1 billion cubic feet per day of natural gas and is expected to be operational by 2006.

        Last week, Sempra Energy LNG Corp., a newly formed affiliate of Sempra Energy International, completed the acquisition of an LNG project in Hackberry, La., from Dynegy Midstream Services LP. The project has been renamed "Cameron LNG" and is scheduled to begin commercial operation in early 2007, pending final regulatory approvals. The facility has the capacity to process up to 1.5 billion cubic feet per day of natural gas.

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         "With natural gas demand outstripping supply in North America, we believe that LNG will be a critical part of the supply mix over the next decade," said Baum. "The Cameron LNG and Energía Costa Azul projects will give us a major presence in the North American LNG market."

        Sempra Energy Solutions, which offers energy outsourcing and commodity services to commercial and industrial customers, recorded a net loss of $1 million in the first quarter 2003, compared with net income of $1 million in the same period in 2002. The first-quarter loss resulted, in part, from a $1 million cumulative effect related to accounting principle EITF 02-3.

        Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500 energy services holding company with 2002 revenues of $6 billion. The Sempra Energy companies' 12,000 employees serve more than 9 million customers in the United States, Europe, Canada, Mexico, South America and Asia.