sempra 6 9 million profit west much show sleeving sempra iso sempra trading unit generates windfall craig rose staff writer july 27 2001 sempra energy parent company sdg e reported 25 percent surge profit 137 million last quarter said yesterday lost money sale electricity long term contract california hand sempra said largest source profits energy trading unit middleman earned 69 million quarter buying selling energy produced others results underscore transformation relatively simple utility companies diversified energy holding companies learned profit new ways deregulation electricity turmoil energy markets surprising announcement company lost money selling power california run electricity prices explained sempra intentional consequence long term contract signed state provide power stephen baum chairman chief executive officer sempra said company agreed provide steep discount california summer months would recoup losses later 10 year deal california sought long term electricity purchase contracts could reduce purchases daily near term power markets prices reached record levels critics say gov gray davis rushed long term deals concerns getting next year election also say contracts saddle customers higher costs years governor acknowledged long term contracts might cause consumers pay relatively high prices electricity later years maintains fair price pay lowering prices devastating state economy michael shames executive director utility consumers action network san diego said steep discount sempra provided state power summer raised questions governor proposal help san diego gas electric co clear debt 750 million sdg e says owed money power purchases behalf customers media conference last month davis said agreement would eliminate threat possible balloon payment consumers said might faced called balancing account debt early next year shames says proposal took form memorandum understanding mou costly consumers bonanza sempra said relatively cheap power provided sempra summer makes mou sound like hidden payback sempra real relief plan local ratepayers shames said release analysis state sempra plan next week state public utilities commission expected rule plan august sempra spokesman said connection discount power tentative agreement clear 750 million debt doug kline sempra spokesman said power contract state signed early may agreement balancing account reached mid june sempra energy trading meanwhile said 10 percent 69 million profit earned sales energy western region includes california trading operation earned 40 million profit comparable period last year california independent system operator manages state power grid investigators said trading bidding strategies tools used energy companies raise prices california power crisis though sempra earned money trading wholesale power generating business lost 9 million quarter baum said discounts electricity provided state prime cause loss sempra energy resources added plant outage also contributed sempra energy resources co owns generating plant near las vegas reliant energy earned 2 million second quarter last year baum added sempra long term contract state provide 1 900 megawatts allowed wholesale business pre sell half power expects generate nevada plant expanded three generating facilities expects build profits sdg e slipped 37 million quarter ended june 30 40 million last year according sempra sdg e whose business restricted delivering gas electricity said provided increased customer service crisis lowered profits wall street analysts generally applauded sempra results noting company ahead plan generate least third profits newer businesses 2003 really two years ahead schedule non utility businesses said brian youngberg analyst edward jones co bud leedom san diego based analyst wells fargo van kasper said sempra move energy trading seems shrewd never dreamed setting windfall like leedom said investors pushed sempra shares 17 cents yesterday close 25 49 trading new york stock exchange bloomberg news service contributed report