Marking Sempra's Methods

When Sempra Energy Chief Executive Stephen Baum recently took stock of his years at the helm of the nation's largest utility owner, he was characteristically blunt about the milestones.

"We didn't bankrupt the company," the ex-Marine said.

Sempra is the parent of Southern California Gas Co. and San Diego Gas & Electric Co. -- two utilities that played key roles in California's 2000-01 energy crunch. To Baum, in his final year as chief executive, merely keeping Sempra solvent is noteworthy, especially compared with the state's other investor-owned utilities.

PG&E Corp.'s Pacific Gas & Electric went through a bankruptcy reorganization, emerging from a three-year stay in Chapter 11 last year. Edison International's Southern California Edison came perilously close to the same fate.

San Diego-based Sempra, whose 22.8 million California customers stretch from San Luis Obispo to the Mexican border, has had its own problems grappling with the crisis and its aftermath. The company at times has infuriated its customers, vexed Wall Street analysts, drawn the ire of consumer advocates and repeatedly battled with California lawmakers and regulators.

Last week, for instance, state Sen. Joe Dunn (D-Santa Ana) accused Sempra of lying to legislative investigators when Sempra denied that it participated in electricity trading schemes during the state's energy crisis.

Sempra also faces a class- action lawsuit that accuses the company of manipulating the natural gas market and exacerbating the state's electricity problems, because most power plants are fueled with gas. Sempra's potential liability if it loses is $24 billion. The company strongly denies both allegations.

Through it all, Sempra has maintained profitable growth under a multi-prong strategy devised by Baum and Sempra President Donald Felsinger, who is set to become CEO when Baum retires Jan. 31.

With 13,000 employees, Sempra not only delivers electricity and gas via its two traditional utilities, it also runs power generation plants; trades electricity, gas and other commodities; operates energy pipelines and storage; and is expanding into the liquefied natural gas market. The company's relative good health in recent years, when other energy suppliers and traders were struggling to survive, helped Sempra snap up assets on the cheap.