Customers and communities
Sempra Energy’s businesses serve more than 32 million consumers worldwide. Our subsidiaries operate utilities in California, Alabama, Mississippi, Mexico, Chile and Peru, meeting the energy needs of a wide range of residential, commercial and industrial customers.
Aliso Canyon leak
In October, SoCalGas discovered a leak at one of its injection and withdrawal wells at its Aliso Canyon natural gas storage facility, located in the northern part of the San Fernando Valley in Los Angeles County. The leak was sealed in February 2016, and the company has acknowledged the disruption it caused to nearby communities and the impact it had on the environment. A detailed description of the Aliso Canyon leak can be found in the Environment section of this report.
The customers we serve have questions about energy and the impact it has on their lives: Is my electric bill going up? How will utility construction impact traffic on my street? What will the new wind project mean for my community?
We listen and respond to these kinds of questions as we work to address customer and community needs. With service-oriented roots dating back more than 140 years, we know that responding to customer and community input is essential.
Our utilities connect with their customers through mail, email, door hangers, advertising, social media and news media. They provide information and answer questions through websites and customer call centers. They review customer research and satisfaction-survey results; host community forums or information sessions; and arrange face-to-face meetings.
For non-utility operations, beginning in the early stages of project development, we make sure local residents and business owners have an opportunity to ask questions and make suggestions. As development continues, we keep them informed through face-to-face meetings, community “open house” events and project update newsletters and other communications.
Community relations and public affairs personnel meet with community leaders to gain further insight into customer and community needs, and to receive business- or project-specific feedback. Ten Community Advisory Councils, which comprise leaders from a particular community or region, meet periodically throughout the year to discuss a range of topics, from advanced meters and solar power to energy bills and energy infrastructure impacts or concerns.
Based on what they learn from their customers, our subsidiaries modify projects or make improvements to customer service.
Community engagement for hydroelectric facility in Peru
In 2015, Sempra International subsidiary Luz del Sur began commercial operation of its 100-megawatt Santa Teresa hydroelectric plant in the Cusco region of Peru. The facility will help power 235,000 homes. During planning and construction, Luz del Sur implemented a program to protect the well-being of residents and remediate the environmental impact of the facility – including impacts related to both construction and operation. The utility also followed all requirements established in the Environmental Impact Assessment (EIA) during the construction phase of the facility, including those resulting from its proximity to the Machu Picchu World Heritage Site.
Throughout all of our operations, and across all stakeholder groups, Sempra Energy respects human rights. We strive to engage with stakeholders, to listen to their concerns, and to incorporate their suggestions and ideas whenever and wherever feasible.
We recently completed a human rights assessment, which included peer benchmarking as well as an analysis of our worldwide operations for areas of potential risk and opportunity. We are now reviewing the results of this assessment.
At Sempra Energy, our top priority is safety. Nothing is more important to us than keeping our employees and customers safe.
As of December 31, 2015, our operations span 13 U.S. states, four countries and two continents. We operate seven energy utilities, 124,440 miles of natural gas pipeline and 49,348 miles of electric transmission and distribution lines. We also operate two liquefied natural gas receipt terminals, six underground storage facilities capable of storing 179 billion cubic feet of natural gas, and five natural gas-fired power plants. With our partners, we operate more than 730 wind turbines and nearly 4,800 acres of photovoltaic solar facilities.
Protecting the public from dangerous contact with our systems and assets is an important objective and an ongoing challenge; we do not control the actions of third parties which may place them in such contact. In 2015, there were 78 injuries and four fatalities alleged to involve company pipes, poles and wires, construction areas, motor vehicles and other facilities*. Due to pending litigation and the non-public nature of settlements, Sempra Energy is unable to disclose further details of these incidents.
*Does not include incidents alleged to involve the Aliso Canyon leak.
Our principal subsidiaries manage the safe operation of their assets, with oversight provided by their boards of directors as well as the EHS&T Committee of Sempra Energy’s board of directors. Public safety-related areas of focus include, but are not limited to:
- Educating customers about energy safety: Customers should avoid contact with electric and natural gas equipment, including poles, transformers, pipes and wires. We produce and disseminate safety education materials and encourage customers to “Dial 8-1-1 before you dig” so our U.S. utility personnel can mark the location of buried utility-owned gas pipelines or electric lines free of charge.
- Testing and replacing natural gas pipelines; retrofitting or replacing valves to enable automatic or remote controlled response; and installing new technology for better system monitoring.
- Replacing and upgrading electrical cables, wires and other equipment.
- Installing smart-grid devices to help identify the location of an outage.
- Repositioning electric line underground (where it is not exposed to vehicles, tree branches, mylar balloons or other potential sources of trouble); and converting power poles from wood to steel, further improving system strength, safety and reliability.
- Engaging in wildfire prevention and preparedness, including vegetation management (tree trimming); extensive weather forecasting; and employee training programs.
- Assessing and mitigating vulnerabilities related to deliberate cyber or physical attacks on energy infrastructure.
At Sempra Energy, we know it is vital that we restore natural gas and electric service quickly and safely in the aftermath of a major disaster or emergency. Our utilities train for such events alongside government officials and first responders. They develop and update contingency plans and emphasize the importance of emergency preparedness to their customers: Uninterrupted access to energy is not guaranteed, so they encourage each customer to develop a written emergency plan and practice implementing it.
Making the electric distribution system more resilient
In 2015, SDG&E repositioned more than 85 miles of electric line underground. More than 60 percent of SDG&E’s electric system is now underground. Moving electric lines underground – where they are not exposed to vehicles, tree branches, mylar balloons or other potential sources of trouble — can increase public safety and decrease outage frequency, although it also can increase the time it takes to restore power. SDG&E also converted more than 2,000 power poles from wood to steel in 2015; further improving system strength, safety and reliability.
Rates and customer-assistance programs
Energy utilities are typically regulated businesses; public agencies (such as the California Public Utilities Commission) set the rates the utilities may charge for delivering energy and providing energy-related services.
Sempra Energy’s utility businesses help customers reduce their energy use and costs. They offer programs and services such as energy-efficiency retrofits, appliance service, on-bill financing of energy upgrades and many different rebates. Some utilities also offer payment plans, including level-pay plans that can smooth out the monthly volatility in energy bills.
In California, customer-assistance programs help low-income or medically qualified customers pay their energy bills and/or reduce their energy use. These programs include California Alternate Rates for Energy (CARE) ratepayer assistance, the Medical Baseline Allowance program and the Energy Savings Assistance Program (ESAP), which provides energy-efficiency upgrades. The California Public Utilities Commission establishes targets for these programs (number of customers to be served or percent of eligible customers to be enrolled) and then tracks results.
In 2015, SDG&E weatherized 20,209 homes through the ESAP program and enrolled nearly 73 percent of its eligible customers in the CARE program. SoCalGas weatherized 80,316 homes through ESAP and enrolled more than 81 percent of its eligible customers in the CARE program. Over 137,000 customers participate in SoCalGas’ level-pay plan. Approximately 26,000 participate in SDG&E’s similar program.
Our utilities on the U.S. Gulf Coast* assist their customers primarily through third-party agencies and nonprofit organizations that have demonstrated effectiveness in this area. As an example, Willmut Gas works with several private nonprofit organizations that help low-income customers with their natural gas bills.
*On April 24, 2016, Sempra U.S. Gas & Power agreed to sell Mobile Gas and Willmut Gas, subject to customary regulatory approvals.
Our South American utilities provide customers with flexible payment options during difficult times. In 2015, Chilquinta Energía made more than 28,000 payment agreements with customers who were having trouble paying their energy bills. Luz del Sur provides financial assistance to approved low-income customers, which consists of a 30 to 40 percent discount for a period of three to six months.
SDG&E to install 3,500 electric vehicle charging stations
A newly approved program called Power Your Drive authorizes SDG&E to install, own and operate 3,500 electric vehicle charging stations at apartments, condos and workplaces in its service territory. The stations will be integrated into the electric grid: charging costs will reflect real-time grid conditions, meaning rates will rise during periods of higher demand and drop when demand eases. Such “responsive” rates help improve electric reliability by encouraging customers to use electricity when ample supplies are available.
Our utility businesses build, operate and maintain vast energy infrastructure to provide their customers with reliable electricity and natural gas service. When service interruptions occur, our utilities identify the location or source of the outage and work to restore service quickly and safely. Vehicle crashes, equipment failure and construction activity are some common causes of power outages and natural gas service disruptions.
SDG&E has been recognized for 10 consecutive years with the “Best in the West” award for electric reliability from PA Consulting, an independent firm. A typical SDG&E customer experiences one power outage every other year. On average, an outage lasts about one hour.
Both of Sempra International’s South American electric utilities provide service reliability that far exceeds standards established by local industry regulators for both frequency and duration of outages. In 2015, Chilquinta Energía ranked number one in terms of its quality of electricity supply among electric distribution utilities in Chile with over 120,000 customers.
Our utilities also strengthen their systems to try to prevent service interruptions and continue to improve reliability.
Electric reliability performance
|SAIDI1: (Average outage duration in minutes)||SAIFI2: (Average number of outages per customer, per year)|
|Luz del Sur||6433||2.903|
1 System Average Interruption Duration Index
2 System Average Interruption Frequency Index
3 System operating conditions, electric reliability performance and methodology for calculating performance vary significantly from country to country.
To avoid service disruptions, our natural gas utilities develop short- and long-term demand forecasts to ensure they will be ready to meet the needs of their customers. They must plan for and develop needed infrastructure several years in advance so they can purchase, store and deliver natural gas when and where it is needed.
In Southern California, natural gas-fired power plants play a key role in providing electricity for the grid, in particular when renewables are not available. If an adequate supply of natural gas is not available, these power plants might need to curtail their operations. This scenario may occur in 2016; in response to the Aliso Canyon leak, the Division of Oil, Gas and Geothermal Resources (DOGGR) has established parameters to assess the Aliso Canyon natural gas storage facility that must be accomplished before the facility can return to operation. This has impacted the availability of local natural gas supplies, and may impact electric reliability as well.
A company’s financial performance matters, not just to its employees and shareholders, but also to its suppliers and contractors; to the customers it serves; and to the communities and governmental jurisdictions where it does business. The economic value a company creates is distributed to these stakeholders in the form of wages and benefits; payments for operating costs; payments to shareholders; payments to governments in the form of fees or taxes; and contributions to community organizations.
In 2015, Sempra Energy generated direct economic value of $10.65 billion* and distributed $8.5 billion* of this amount to stakeholders:
- Sempra Energy and its subsidiaries employed 17,000 people who earned $1.8 billion* in wages and benefits in 2015.
- Operating costs were $4.9 billion*, which included payments made to a wide range of suppliers including diverse business enterprises (DBEs). For more on DBE spending, see the section of this report describing business partners and suppliers.
- We paid $419 million* in federal, state and local taxes and fees. This figure includes permitting and environmental compliance fees and taxes paid to governments in Mexico, Chile and Peru.
- We paid $702 million* in dividends to shareholders.
- We paid $611 million* in interest to financial institutions and other providers of capital.
- Sempra Energy, our subsidiaries and the Sempra Energy Foundation made $19 million* in grants and donations to support the communities where we operate. This figure represents 1.1 percent of our pretax income.
*These figures were determined according to the guidelines provided by the Global Reporting Initiative.
Philanthropy and community involvement
Sempra Energy’s areas of focus for philanthropy and employee volunteering are aligned with our business priorities. We focus on the environment because we recognize that our business operations have an impact. We contribute to community development and education because strong economies support a higher quality of life – and effective schools develop skilled workers and wise leaders. And we prioritize emergency preparedness to help make sure our communities are ready.
Examples of philanthropy and involvement during 2015 include:
- SDG&E supported Kid’s College and that organization’s “E3 Explorers Club: Environment, Energy and Engineering.” This extended-learning program provides interactive science and engineering lessons to 220 underserved children in an environment that builds confidence and leadership skills.
- SoCalGas was honored by Special Olympics World Games as the top volunteer organization after providing more than 1,900 volunteers in support of this event. The subsidiary also fielded the record-breaking team to support United Way HomeWalk: More than 800 volunteers raised in excess of $100,000.
- Employees at Sempra U.S. Gas & Power’s Broken Bow II wind facility in Nebraska donated time and money to The Iain Nicolson Audubon Center at Rowe Sanctuary. The Sanctuary, known as the “Sandhill Crane Capital of the World,” is a frequent stopover for migratory birds and is dedicated to the conservation and restoration of natural ecosystems.
- Employees of Sempra International subsidiary Chilquinta Energía continued to support Hogar Manuel de Tezanos Pinto de Quillota – Fundación Refugio de Cristo. This orphanage cares for girls between the ages of 5 and 18 and provides them with a safe place to live and attend school. Chilquinta Energía employees provided holiday and birthday presents for the girls, donated basic household supplies and made improvements to the grounds and facilities.
- IEnova, Sempra Energy’s subsidiary in Mexico, formed Fundación IEnova in 2015 as a way to contribute to community development and environmental conservation in the communities where they operate. The foundation developed an orphanage adoption program, committing to provide financial and volunteer support to orphanages for three years in six cities: Mexicali, Ensenada, Hermosillo, Chihuahua, Torreón and Mexico City.
The Sempra Energy Foundation matched employee contributions 2:1 for the company’s second annual Giving Tuesday campaign, resulting in a contribution of more than $140,000 divided among eight charities battling hunger. And Sempra Energy employees, with Foundation support, donated nearly $115,000 to support relief efforts in response to a devastating earthquake in Nepal.
Our employees also give time and money to their communities. In 2015, the company recorded $3.2 million in employee giving and employee volunteer time of 15,000 hours.
Sempra Energy supports employee giving through programs like the Sempra Energy Giving Network, a 501(c)(3) nonprofit that allows employees to set up direct payroll contributions to charities of their choice.
Sempra Energy also supports employee volunteerism through programs such as our Volunteer Incentive Program. This program allows employees who give at least 10 hours of their personal time to a nonprofit or school to request a grant from the Sempra Energy Foundation to that nonprofit or school in the amount of $10 per hour volunteered (with a minimum of 10 hours and a maximum of 25 hours per grant).