Project #50329 - SDG&E San Diego Gas and Electric

Here is my project that I have put together. I need it in APA format with my references done correctly. There is no reasearch that needs to be done just make the paper flow. If you need to rearrange it it ok with me. Please take out any infomation that you feel is not important I also need an introduction and a conclusion about the company. Here it is I will also attach the file.


The San Diego Gas &Electric (SDG&E) is a company that provides electricity and natural gas in both Orange and San Diego counties in South West of California in the United States. This company is owned by a 500 energy services holder known as Sempra Energy which is based in San Diego. SDG&E is a public utility that is regulated and supplies energy to over 3.3 million consumers with around 1.4 million electric meters and more than 0.84 million natural gas meters in Orange and San Diego covers an area span of around 4,100 square miles which is equivalent to 10,600 square kilometers with around 5,000 employees (San Diego Gas &Electric Company, 2009).


“We provide safe, reliable energy infrastructure and services that allow out communities to grow and prosper.” SDG&E provides safe, affordable and reliable service by an energy company for the Community. The company provides affordable service with a one-stop solution for energy insight while at the same time offer deals on saving. SDG&E works with their mission statement by being connected to the planet. They produce and deliver energy to residents and businesses and being connected is critical to SDG&E to accomplish jobs safely, reliably, and sustainably. SDG&E maintains its  promises  by providing solutions to customers for saving energy as well as producing innovative appliances to help keep the home more energy efficient for customers.


“San Diego Gas & Electric, in collaboration with key stakeholders, will create the foundation for an innovative, connected and sustainable energy future.” SDG&E works with their vision by offering a smart energy future and innovative utility platforms. This allows the electricity in San Diego to be generated, stored, delivered and consumed in a cost efficient manner with the use of solar panels. The company has great insights on sustainable energy and plays a big role in encouraging the community to do their part in conserving resources.

This company first met on 18th of April 1881 at the parlor of the Consolidated Bank. This meeting was aimed at incorporating the San Diego Gas Company and they ended up forming a successful enterprise that serviced a fledging city, which had a population of around 3,000 people. They immediately requested the city trustees to authorize a purchase of 25 posts for street lamps which were the first posts to be maintained to serve the public.130 years later, San Diego had over 99,000 posts for the street lights that were sufficient to service the seventh largest city in the the time went by, the company’s gas customers grew from 89 to around 8,400 with the electric customers growing from zero to around 3.3 million (San Diego Gas &Electric Company, 2012).

For years now, the San Diego Gas& Electric Company has an ongoing plan to invest multi million dollars in technology in order to help in monitoring and management of plug-in electric vehicles, solar panels and energy storage assets .the company refers this plan as energy resource management system called DERMS (Distributed Energy Resource Management System.) According to its 2011 plan of smart grid deployment, the system was expected to fully function and interface with the customer resources and loads. This was in order to support the plan and utilization of every distributed energy resource within the company’s service territory.

The San Diego Gas and Electric Company has a huge customer base spanned across the United States county of San Diego and the Orange County in California. Being a remote county, most people in the region have little access to the national grid of the nationally generated electricity. This has been influenced by the fact that the state has a large number of populations, a fact that has led to the increase in the demand for electricity for consumption both commercially and domestically. Statistics reveal a general increase in the number of people across the state over the years. Since the 1990’s, the population of the state has increased steadily. This steady increase has led to the increase in the number of the total consumption load from about 45,021 in the year 1990 to 57,993 in the year 2011. This steady increment in the consumption characteristics of the population has led to the corresponding increase of the demand of electricity across the region (California Energy Commission, 2012).

Given the increased demand of electricity in the region, the company has been forced to make efforts that have seen it produce electricity on an all-year basis so as to cater for the needs of the public. This advance of the increased in demand of electricity is a statewide issue that the company has resolved to meet it by the production of more electricity and on a year-round basis since the purchasing power of the public is constantly on the rise. Several measures have been taken by the company to make sure that it meets the increased demand. One of them is the diversification of the energy production systems that the company has undertaken. The need to reduce green-house gas emissions have made the company invest in alternative sources of power such as the use of renewable source of energy including solar power and geothermal energy (California Energy Commission, 2008).

Analysis of the company’s state demands shows a gradually increased energy demand in electricity. Based on the national energy consumption shows a considerable increase by up to 29 percent from the year 2012 to the year 2040. Whereas there is a general trend of the decline of the annual energy consumption observe, the trend has been on the rise and is expected to peak in the 2030’s due to the increasing trend of industrialization and upgrade in the lifestyles of individuals over time. The overall trend in the consumption is expected to put a strain the production of electricity across the state and hence leading to the increase in the retailing prices of electricity in the state increase by a considerable amount.

Sempra Energy - San Diego Gas & Electric

Sempra Energy is a San Diego-based Fortune 500 energy service that provides a nonstop electric power, natural gas, and valued products and services. Sempra Energy is the parent company of San Diego Gas & Electric and Southern California Gas Co. SDG&E is the main source of natural gas and energy for the San Diego county. They supply power to a population of 3.4 million businesses and residents between 2 counties and 25 communities.

SDG&E’s Energy Assessment

SDG&E is the only company in San Diego that offers their services. We believe SDG&E understands their mission and vision statements and provide the proper services. They provide useful tips on conserving energy as well as giving smart energy products. There is information on how to save on purchasing appliances, rebate information, programs and other services. SDG&E also provides information on how the consumer can conserve natural resources. Their main focus is centered around the customers as they offer incentives and rebates on improvements.

The San Diego Gas and Electric Company is projected to make much gains in terms of its customer base over the next few years. Given the increase in population of the county and other neighboring counties, the demand for electricity is projected to rise by almost 30 percent by the year 2030. This will be due to the increase in the number of people demanding electricity both for the local and commercial consumption needs.

The pricing structure of the company is set to be influence by three major factors affiliated to the production costs. These factors include the materials that have been used to produce the electricity, the labor costs incurred in the production process and the operational and maintenance costs. The major determining and constant factor in the sale of the electricity is the maintenance costs. With the cost of maintenance materials on the rise, there is expected to be a high amount of money spent on the materials used to service and maintain the production facilities. The gross margin will be calculated as percentage and as a derivative function of the revenue generated and the cost of goods sold by the company. To express the gross margin, the following formula shall be used.

Gross margin = Revenue generated-the cost of electricity produced

                               Revenue generated by the sale of electricity

The company would also offer discounts based on several factors. Firstly, the length of time that one has spent, as a customer of the company will attract a certain amount to momentary discount per month. The long lasting customers of the company are awarded a higher amount of discount than those that will have spent a considerably less time. The discount will also be expressed as a function of the amount of money that a particular customer will have spent. The formula that will be used will for example be:

Discount =               amount of money spent per month

               Duration in months of being a customer of the company

The company has an edge over its competitors. Firstly, the company is strategically located in a region that has little electric supply from the national grid. The numbers of customers in the Californian state far out-number all other customers in the US. This puts the San Diego Company at an edge over all the other countries in the nation. The purchasing power of the company has significantly improved over time.

Organizational Structures:

            Every organization has a vision and a mission to be achieved. In the context of achieving these goals organizations, arrange their personals and the available resources in a predetermined methodology this is termed as the organizations structure. Organizational structure plays an important role in the success of an organization. Every organization develops an unique structure for its operation. Responsibilities and tasks to the employees are assigned based on the structure that is adopted by the organization.

            Responsibilities of every employee in an organization are well defined along with to whom they are responsible in the organization. The positions of the employees in an organization are represented using a chart in most of the organization. Several factors are to be considered while deciding the organizational structure. These include size of the organization, geographic location of the organization and the target markets of the organization.

            A number of choices are available for selecting the desired organizational structure. In some organization, there would be highly specialized employees those who perform specific tasks only and in some organization, employees may perform multiple tasks. Organizational structure should be based on these diverse workforce and working atmosphere. There are certain jobs that are to be performed by an organization for instance an organizational activity will include manufacturing. Purchasing, marketing, and personnel.


SDG&E is a public entity that provides energy service to more than 3.4 million people. There are nearly 5000 employees working under the company delivering everyday energy service to the people.

Organizational Structure

Organizational structure that has been adopted by the company is representative of the high class and quality work and services that is provided by the organization. Chart below describes the organizational structure of the company:

            From the chart above it can be inferred that the organization has three major departments for the operation. These include the Energy utilities, Gas & power, Sempra international. Employees are segregated and assigned responsibilities based on these departments. Various employee positions and responsibilities of the employees in the organization are as described below.

Structural Hierarchy:

Director-Electric Grid Operations: Director is responsible for the transmission system and the reliability functions. Director is also responsible for the taking care of operational relationship between the SDG&E and ISO of California. The director reports to the Vice President directly.

Grid Control Manager: Grid control manager is responsible for the controlling the grid activities of the company, these also include the real time operations and the technical support to the company. In addition to these tasks, the Grid Control Manager also takes care of the managerial operations with California ISO. The Grid Control Manger is responsible to the Director. Under the Grid Control Manager functions the Grid Operations Services Manager and the Grid Business Process Manager. They are responsible for the overall management, maintenance, and development of the operating operations.

Engineering Department:

After the grid, control department the next department of the organization is the engineering department. The engineering department consists of the Engineering analyst who is the scheduling coordinator of the company and is responsible for handling the ISO invoices. Next in the hierarchy is the Principal Engineer who is in responsible of providing both technical and analytical support to the company. The engineering department of the organization also consists of the document coordinator and the scheduling coordinator.

Software Department:

            Sr. EMS Programmer Analyst: Supports the critical business operations 24x7 and is responsible for the system administration of the company. The reports are to be submitted to the Grid Operations Manager. The EMS operations manager is responsible for the overall operation and maintenance of the organization’s mission and is responsible to the Director of the firm. Apart from these higher departments of the organization, several other departments and specialist are segregated under the organizational structure. Field engineering department of the organization is taken care of by the field-engineering manager of the organization who supervises the electronic control technicians in the substations and other field locations. Responsibility for the installation, testing, and maintenance of the SCADA equipment of the organization is done by the electronic control tech department. The software supervisor of the organization is responsible for the systems operations, integration, database, software and applications support for the organization. The next level of the employees is responsible for the general operation of the organization. These employees play an important role in the smooth operations of the organization.

Operations Shift Supervisor:

The operation shift supervisor is responsible for receiving and processing the request of the grid facilities associating with the electric engineering department.

Outage Shift Supervisor: Requests for the transmission grid facilities is taken care by the outage supervisor. Reports to the operations shift supervisor. After the operations team of the organization is the training department and the responsibility and various positions assigned to the employees are;

Training Department:

Training coordinator: It is the responsibility of the training coordinator to monitor and coordinate the training programs of the organization. They are also responsible for documentation of the training materials and maintaining the appropriate training format for the organization.

Operations Shift Supervisor-Training Team: They assist in the program development and coordinating the training program of the organization. They review and verify that the system of training is smoothly carried out in the organization. Under the training department also there is the operation shift supervisor who supports the grid control training of the organization.

After the training department, it is the team lead who is responsible for the ensuring that the training activities of the organization are carried out smoothly and effectively. The final department is the hardware department that ensures that the systems of the organization function properly.

The company maintains a well structured organizational design and has an overall smooth functioning. Having the segregated almost all the departments the organization functions effectively in the market.

Growth opportunities

The San Diego Gas & Electric Company is one of the fastest growing companies across the United States. Venturing in a highly dynamic sector, generation of electricity, the company has one of the largest potentials of growth among the rest of the competing companies in the energy sector. Since its inception in 1881, the company has dynamically engaged its efforts towards the realization of its vision of being a leading energy provider for the nation. To meet its vision and mission, the company has explored several growth opportunities (Walton, 2014).

Firstly, the San Diego Gas & Electric company has incorporated several alternative sources of energy. Since its foundation, it has been exploiting geothermal power stations as part of the major sources of energy. In a bid to diversify, the company has a great opportunity since it has at its disposal a rich profile of elite engineers who conduct research into the prospect of venturing into alternative sources of electricity such as solar and hydropower. The proper exploitation of this opportunity can oversee the company’s growth in terms of diversification and therefore generation of power from much cleaner sources of power that would be environmentally safe and friendly (Walton, 2014).

Secondly, the company has at its disposal the chance of diversifying its investments from the generation of power into other options available. One of the most potent opportunities of business diversification that the company can invest in is the investment into the automobile industry. According the company’s data, the company has already made initiatives to invest in the automobile sector. The bid of the company to invest in the automobile sector has been boosted by the calls for the invention of alternatively powered vehicles so as to save both energy and the environment from pollution. The company has therefore made investments in the alternative-fueled vehicles. This opportunity presented the company with the chance to diversify its income as well as enhancing its efforts to fast track into the leadership in the manufacturing industry. It also presents the company with an opportunity to stabilize its income since the new investment has little or no competition from rival companies (Walton, 2014).

Growth operations

The company has made several operations in a bid to ensure that it diversifies effectively. One of the major steps taken by the company includes the initiatives to invest further to enlarge its customer base. With the company having majority of its shareholders and customers in the US alone, steps and measures have been taken and are underway to make sure that it has a wider grip of the public. One of the major steps that the company has taken in this bid has been the expansion of its power generation into foreign nations such as Peru and Chile. This would enlarge its command of power supply. In a bid to achieve this, stakeholders have taken measures such as the proposition of the need to make franchises in the Peru and the Chile markets. This would not only save the company investment costs but also save time that it would need to fully establish itself in this newly established markets (Reed, 2013). 

Opportunities for business improvement

The San Diego Gas &Electric Company has also made initiatives to improve its business. Several measures have for instance been made in a bid to make sure that the company meets the expectations; both of the public and its own vision and mission. One of the best chance that the company has had to improve its business is the enhancement of its on-bill financing systems. The on-bill systems are made to enhance the facilitation and financing of the projects that the company has undertaken. This has also to extend the expectations of the public. The company has been majoring towards enhancing its approach both in the bill payment as well as the loan repayment. Firstly, the company has made efforts to make sure that the customers get a good chance and platform of payment of bills. The facilitation of good and faster methods of payment is meant to enhance the flow of business as well as streamlining the relationship between the company and its customers. Withdrawal of the interest rate for the defaulted and overdue bills attracts the public to pay their loans efficiently (San Diego Gas & Electric Company, 1999).

Other improvements that the company has made in the course of time improved its company-customer relations. In this bid, the company has made initiatives to make sure that it attracts more clients. One of these initiatives includes the improvement of the enrollment platforms on which the clients can enroll for the connection with electricity as well as the qualification of the company’s bill discounts. In addition, other measures include the incorporation of measures that see the customer well equipped with tips on how to improve their energy consumption and conservation skills. This has seen the company offer free training and seminars on the available options of improving their homes so as to improve the energy consumption. The home improvement system that the company has engaged in is meant to improve its energy efficiency among the consumers (San Diego Gas & Electric Company, 1999).


The San Diego Gas & Electric Company faces a couple of problems that seek to deter it form the strategic plans that it has made over time. One of the major threats to the sustainability of the company’s survival has been established as the high competition that the company faces from the rest of the high profile energy generation companies. Some of the most prolific companies that have continuously posed a threat due to the stiff competition includes the Pacific Company, Southern California Gas Company and he Edison International Company that venture in a similar business of generation of power. This stiff competition threats the company’s control of a large part of the public.

Secondly, the company also faces a major challenge from the intensive governmental regulation. With the energy generation companies contributing heavily towards the environmental degradation, there has been an intensified effort directed towards the regulation of the production of greenhouse gases. With the global carbon taxation in place, the San Diego Company has lost money towards the payment of the statutory charge. In addition to this, the company is highly threatened by legal instigations meant to block the company from the certain investments. One such incidence is where the Navy sued the company when a US Navy chopper crushed into an electric pole belonging to the company (MBASkool, 2011).

Strategic growth plan

The San Diego Gas &Electric company has made strategic goals and initiatives that would oversee its success in the investments in the future. As discussed above, the company has made initiatives to diversify its investments. This helps in the generation of income from varied sources and thus its able to survive tough times.



SWOT-Analysis of Sempra Energy - San Diego Gas & Electric





·       SDG&E Achieves Record Diverse Business Enterprise Spend

·        Cross Culture DiversityManagement

·       Huge Customer base

·       Owned by Fortune 500 energy services company

·       Reliable energy infrastructure and services

·       Abundance of Resources to meet the demands and growing energy needs

·       Huge employees Based (over 5000)

·       Monopolic electric supplier

·       Long Term Electricity Supply Contracts


·       Power failure with no backup power plant can cause total blackout throughout the entire San Diego area.

·       Price control

·       Opportunity to   diversify in the advent of risks.

·       Could transfer into other renewable energies

·       Focus on Renewable Power Generation

·       Growing Electricity Demand

·       New competition means limited market share

·       Legal, Restrictions and regulations. Law suits

·       Innovations in Energy technologies

·        Seasonal Variations and Climate Conditions

·       Volatility in Natural Gas prices




The ability of the San Diego Electric Company to obtain and maintain a rich profile of customers is pegged upon its strengths. The company has several strengths. Firstly, the huge number of employees maintains a huge number of diversified employees and customers. To make sure that there is equity, is has maintained a good level of diversity management. Secondly, the company has a huge client base that is well maintained by the fact that the Californian State has a huge number of populations, which is heavily dependent on electricity for domestic use (Global Data, 2014).

Thirdly, being owned by a fortune 500 Company, the company enjoys a tenacious level of boost from the good management system that the company upholds. This enables the company enjoy a huge monopoly due to the preference that the customers have over the company. Lastly, the company has at its disposal; a huge amount of resources varying from the geothermal power resources to the huge amount of solar for generating a huge amount of electricity  (Global Data, 2014).

The San Diego Company, however, has a number of weaknesses that deter it from achieving its goals. Firstly, the company has a huge number of power failures and blackout incidents across the nation. This is due to the lack of a power backup at its disposal. These power failures cost the confidence of the public to the company. It also makes the company loose a considerable amount of revenue. Secondly, the company maintains a huge level of price control to shield its customers from price hikes. This causes a considerable level of losses over time. In addition to this, there are significant levels of discounts offered by the company to the customers. This make the company loose a considerable amount of money given the large number of customers that the company must discount (Weiner & Partner, 2013).

Despite this, the San Diego Company has a huge prospect of opportunities that make it at a better opportunity to invest as compared to other companies. Firstly, the diversification ability of the company is considerably huge. This has made the company agile and able to diversify into other forms of businesses hence broadening its profitability.  For example, the company can venture into other forms of energy generation opportunities. Lastly, the company has a huge number of proximal sources of power that can be exploited. Some of which include geothermal power, solar power and nuclear power (Global Data, 2014).

On the other hand, the company has a huge number of challenges and threats. Firstly, the company is hugely threatened by legal instigations meant to block the company from the certain investments. This has slowed the progress of the company. Secondly, the company has several levels of threats from other competitive companies which have wider and better investments which make them at a better chance to attract more customers (Weiner & Partner, 2013).

Business Valuation

            We have engaged to estimate the market value, better known as market capitalization for a publicly traded company. The company we will be evaluation is San Diego Gas & Electric who has a parent company, Sempra Energy. In order to obtain the market capitalization we have to look into the shares and stock market, San Diego Gas & Electric’s ticker symbol is SDO-H. After looking into the stock and shares we multiply the number of its outstanding shares by the current share price. Today the share price for San Diego Gas & Electric is $24.24 with 701,732 shares. This information generates the current market capitalization for San Diego Gas & Electric, which is $17.01 million. We also looked into San Diego Gas & Electric’s parent company Sempra Energy for their current share price, which is $110.74 giving them a market capitalization of $27.236 billion. Since the parent company, Sempra Energy of San Diego Gas & Electric is doing fairly well after looking into their stock and shares, it is hard to say San Diego Gas & Electric will be bought out or go bankrupt in the following years to come. Their business seems to be doing well and looks like they will be on the rise and keep doing better, unless another gas and electric company find their way into San Diego taking the business away, which seems to be unlikely with the strength and reliability San Diego Gas & Electric has built already, as well as having a strong parents company this helps San Diego Gas & Electric.

“Sempra Energy (SRE) today reported increased third-quarter 2014 earnings of $348 million, or $1.39 per diluted share, up from $296 million, or $1.19 per diluted share, in the third quarter 2013. Earnings for SDG&E in the third quarter 2014 were $157 million, compared with $129 million in the third quarter of last year. For the first nine months of 2014, SDG&E’s earnings were $379 million, compared with $285 million in the first nine months of 2013 (PRNewswire).”

            San Diego Gas & Electric is currently the only gas and electric company supplying all of San Diego and parts of Orange County. They have stood as the only reliable source or gas and electric for the previous years. There is no other competition in San Diego right now where San Diego Gas & Electric has to be worried about losing their company.




































California Energy Commission. (2008). California Electricity Statistics & Data. Retrieved November 8, 2014, from

California Energy Commission. (2012). Historical California Electricity Demand. Retrieved November 8, 2014, from

John, J. S. (2014, May 16). Inside SDG&E’s Plan to Optimize the Distributed Grid of the Future: Greentech Media. Retrieved November 8, 2014, from

San Diego Gas &Electric Company. (2009). San Diego selected as target market for largest transportation electrification project in U.S. history | San Diego Gas & Electric. Retrieved from

San Diego Gas &Electric Company. (2012). Our History | San Diego Gas & Electric. Retrieved November 8, 2014, from

MBASkool. (2011). San Diego Gas & Electric | SWOT Analysis | BrandGuide | MBA Skool-Study.Learn.Share. Retrieved November 22, 2014, from

Reed, D. L. (2013). Shareholder's Resolutions. Retrieved November 22, 2014, from

San Diego Gas & Electric Company. (1999). On-Bill Financing | San Diego Gas & Electric. Retrieved November 22, 2014, from

Walton, R. (2014, October 8). How SDG&E wants to power the electric vehicle market | Utility Dive. Retrieved November 22, 2014, from


Sempra Energy Earnings Rise In Third Quarter. (2014, November 4). Retrieved November 29, 2014, from


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"Vision." Home. San Diego Gas & Electric, 1 Jan. 2014. Web. 1 Nov. 2014. <>.

"About Us." Home. San Diego Gas & Electric, 1 Jan. 2014. Web. 1 Nov. 2014. <>.

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