Exhibit 10.16

AMENDMENT AND RESTATEMENT OF THE
SEMPRA ENERGY

CASH BALANCE RESTORATION PLAN

Table of Contents

1.

EFFECTIVE DATE

2.

PURPOSE

3.

ADMINISTRATION

4.

ELIGIBILITY; PARTICIPATION

5.

AMOUNT OF BENEFITS

6.

PAYMENT OF BENEFITS

7.

EMPLOYEE’S RIGHTS

8.

AMENDMENT AND DISCONTINUANCE

9.

DEFINITIONS

10.

EMPLOYEES OF SEMPRA ENERGY TRADING CORPORATION
AND SEMPRA ENERGY SOLUTIONS LLC

11.

SECTION 409A OF THE CODE

12.

CLAIMS PROCEDURE

13.

MISCELLANEOUS

1.

EFFECTIVE DATE

The Sempra Energy Excess Cash Balance Plan (the “Plan”) was effective as of July
1, 1998.   

The Plan was amended and restated effective as of November 5, 2007.  The name of
the Plan was changed to the Sempra Energy Cash Balance Restoration Plan
effective June 16, 2008.

Sempra Energy hereby amends and restates this Plan in its entirety effective as
of December 31, 2008, except as otherwise provided herein.  This amendment and
restatement of the Plan is intended to comply with the requirements of Sections
409A(a)(2), (3) and (4) of the Code (as defined below) and the Treasury
Regulations thereunder.  The elections and amendments made in accordance with
the transitional relief under Internal Revenue Service Notice 2005-1, the
Proposed Regulations under Section 409A of the Code and Internal Revenue Service
Notices 2006-79 and 2007-86 shall be effective for the relevant periods on or
before December 31, 2008.

2.

PURPOSE

This Plan serves two purposes. First, it provides benefits for certain Employees
in excess of the limitations on benefits under the Basic Plan (as defined below)
imposed by Section 415 of the Code (as defined below). The portion of the Plan
providing these benefits is intended to be an "excess benefit plan" as defined
in Section 3(36) of ERISA (as defined below). Second, it provides benefits for
certain Employees in excess of the limitations on benefits under the Basic Plan
imposed by Section 401(a) (17) of the Code.

3.

ADMINISTRATION

This Plan shall be administered by the Compensation Committee of Sempra Energy
("Compensation Committee") in a manner consistent with the administration of the
Basic Plan.  However, the portion of this Plan which is an unfunded "excess
benefit plan" as defined in Section 3(36) of ERISA shall be administered as such
and is exempt from the provisions of Title I of ERISA pursuant to Section 4(b)
(5) of ERISA, and the rest of this Plan shall be administered as an unfunded
plan maintained primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees.  The Compensation
Committee's decisions in all matters involving the interpretation and
application of this Plan shall be final.  Sempra Energy’s Senior Human Resources
Officer shall have discretionary authority with respect to administrative
matters relating to this Plan, except when exercise of such authority would
materially affect the cost of the Plan to the Company, materially increase
benefits to Participants, or affect such Senior Human Resources Officer in a
manner materially different from other Participants.

4.

ELIGIBILITY; PARTICIPATION

(A)

All Employees whose pension benefits under the Basic Plan are limited by the
compensation and benefits limitations imposed by Sections 401(a)(17) and 415 of
the Code shall be eligible for benefits under this Plan. In no event shall an
Employee who is not entitled to benefits under the Basic Plan be eligible for a
benefit under this Plan.  An Employee who is a participant in the Basic Plan
shall first become an Eligible Employee on the first date on which such
Employee’s benefits under the Basic Plan are limited by the provisions of
Section 415 of the Code, or such Employee’s benefits under the Basic Plan are
limited by the covered compensation limitations of Section 401(a)(17) of the
Code.

(B)

An Eligible Employee shall be a Participant and shall be entitled to benefits in
accordance with Section 5.

5.

AMOUNT OF BENEFITS

(A)

415 Make-Up

The benefits payable under this subsection (A) to a Participant whose benefits
under the Basic Plan are limited by the provisions of Section 415 of the Code
incorporated in the Basic Plan, or to his beneficiary(ies), shall equal the
excess, if any, of:

(i)

the benefits which would be paid to such Participant or on his behalf to his
beneficiary(ies) under the Basic Plan, if the provisions of such Plan were
administered without regard to the benefit limitations under Section 415 of the
Code set forth in the Basic Plan, over

(ii)

the benefits which are paid to such Participant or on his behalf to his
beneficiary(ies) under the Basic Plan.

(A)

401(a) (17) Make-Up

The benefits payable under this subsection  (B) to a Participant whose benefits
under the Basic Plan are limited by the covered compensation limitations of
Section 401(a)(17) of the Code incorporated in the Basic Plan, or to his
beneficiary(ies), shall equal the excess, if any, of:

(i)

the benefits which would be paid to such Participant or on his behalf to his
beneficiary(ies) under the Basic Plan, and, if applicable, to the Participant,
under subsection (A), if the provisions of such Plan were administered without
regard to the covered compensation limitations under Section 401(a)(17) of the
Code set forth in the Basic Plan (and, with respect to covered compensation paid
or payable in plan years beginning on or after January 1, 2007, with a maximum
compensation limit for each plan year of Two Million Dollars ($2,000,000)), over

(ii)

the benefits which are paid to such Participant or on his behalf to his
beneficiary(ies) under the Basic Plan and, if applicable to the Participant,
under subsection (A).

(C)

Conformance with Treasury Regulations

The benefits payable under subsections (A) and (B) are determined under the
formula determining benefits under the Basic Plan, and the benefits payable
under subsections (A) and (B) are determined as an amount offset by the benefits
provided under the Basic Plan.  The benefits payable under this Plan shall be
determined in a manner consistent with Treasury Regulation Sections
1.409A-2(a)(9) and 1.409A-3(j)(5) (relating to nonqualified deferred
compensation plans linked to qualified employer plans).  Any amendment of the
Basic Plan shall be taken into account under this Plan only to the extent
permitted under Treasury Regulation Sections 1.409A-2(a)(9) and 1.409A-3(j)(5).
 Any reference to the interest and mortality factors (or actuarial methods and
assumptions) specified in the Basic Plan shall mean the applicable interest and
mortality factors (or actuarial methods or assumptions) specified under the
terms of the Basic Plan as in effect on December 31, 2008.  

6.

PAYMENT OF BENEFITS

(A)

Distribution Options for Certain SERP Participants

(i)

In the case of a Participant who is an Eligible Employee, and is a participant
under the SERP (as defined below) as of December 31, 2005, the payment of
benefits to such Participant under this Plan shall be made in accordance with
this subsection (A).

(ii)

Unless the Participant exercises the Lump Sump Option and receives a lump sum
distribution from the Basic Plan, the payment of such Participant’s Pre-Section
409A Benefit under this Plan shall be in the same payment form and at the same
time as the payment of benefits to the Participant or on his behalf to his
beneficiary(ies) under the Basic Plan. In the event a Participant receives a
lump sum distribution from the Basic Plan, payment of such Participant’s
Pre-Section 409A Benefit under this Plan will be made in the form of a straight
life annuity. However, the Participant may request, in writing, payment of such
Participant’s Pre-Section 409A Benefit under one of the following alternatives
provided such request is filed with Sempra Energy  at least three months prior
to his Retirement Date or Termination under the Basic Plan:

(a)

The Participant may request payment of such Participant’s Pre-Section 409A
Benefit under any of the other annuity options for which he is eligible under
the Basic Plan. The amount of such optional annuity benefit with respect to his
or her Pre-Section 409A Benefit under this Plan shall be computed as specified
in Section 5 of this Plan using the interest and mortality factors specified in
the Basic Plan. The request will be subject to approval of the Company's Senior
Human Resources Officer and, if approved, will be irrevocable as long as the
Participant receives a lump sum distribution from the Basic Plan.

(b)

The Participant may request payment of such Participant’s Pre-Section 409A
Benefit in a lump sum. The amount of the distribution with respect to his or her
Pre-Section 409A Benefit under this Plan shall be computed as specified in
Section 5 of this Plan using the actuarial factors specified in the Basic Plan.
In the event such a request is timely filed, the request shall be considered by
the Senior Human Resources Officer who shall have the sole discretion,
considering the best interests of the Company, to allow a lump sum distribution.
The decision of the Senior Human Resources Officer shall be final. The
Participant will be required to show good reason for receiving a lump sum
distribution and, file the request at least three months prior to separation
from service as a condition of having the request approved. If the lump sum pay
out is approved, the lump sum form of pay out shall be irrevocable even if the
Participant changes his election under the Basic Plan.

The Participant’s beneficiary(ies) with respect to his or her Pre-Section 409A
Benefit under this Plan shall be exactly the same as his beneficiary(ies) under
the Basic Plan unless he elects and receives a lump sum distribution from the
Basic Plan. In this event, the following provisions will apply if such
Participant’s Pre-Section 409A Benefit under this Plan is paid in the form of a
joint and survivor annuity.

The joint and survivor annuity is only available with respect to such
Participant’s Pre-Section 409A Benefit if the Participant designates his or her
spouse as beneficiary or obtains spousal consent to the designation of another
beneficiary in the same manner as under the Basic Plan. If the spouse, or
beneficiary dies before the Participant’s Retirement Date under the Basic Plan,
the joint and survivor annuity with respect to such Participant’s Pre-Section
409A Benefit is canceled and the benefit is paid in the form of a straight life
annuity.

(iii)

The payment of such Participant’s Post-Section 409A Benefit under this Plan
shall be in a lump sum upon the Participant’s Separation from Service, unless
the Participant elects to receive an optional annuity form of payment under
subparagraph (a).  The amount of the Participant’s lump sum distribution with
respect to his Post-Section 409A Benefit under this Plan shall be computed as
specified in Section 5 of this Plan using the actuarial factors specified in the
Basic Plan.  

(a)

The Participant may elect, in writing, payment commencing upon the Participant’s
Separation from Service under any of the following annuity options:  (I) a
straight life annuity, (II) a joint and 50% survivor annuity, and (III) a joint
and 100% survivor annuity.  The amount of such optional annuity benefit with
respect to such Participant’s Post-Section 409A Benefit under this Plan shall be
computed as specified in Section 5 of this Plan using the interest and mortality
factors specified in the Basic Plan. The election will be subject to approval of
the Company's Senior Human Resources Officer, in his or her discretion, and, if
approved, will become effective and  irrevocable on the date of such approval
(except as provided in subsection (B)).  The payment of such Participant’s
Post-Section 409A Benefit in an annuity form shall commence upon the
Participant’s Separation from Service.

(b)

A Participant’s election under subparagraph (a) may be made with respect to a
Participant’s Post-Section 409A Benefit on or after January 1, 2006 and on or
before December 31, 2008 in accordance with the transitional relief under
Section 409A of the Internal Revenue Code and Internal Revenue Service Notices
2006-79 and 2007-86; provided, however, that a Participant’s election made in
2006 shall only apply with respect to payments that would not otherwise be
payable in 2006, and shall not cause payments to be made in 2006 that would not
otherwise be payable in 2006; and, provided, further, that a Participant’s
election made in 2007 shall apply only with respect to payments that would not
otherwise be payable in 2007 and shall not cause payments to be made in 2007
that would not otherwise be payable in 2007; and provided, further, that a
Participant’s election made in 2008 shall apply only with respect to payments
that would not otherwise be payable in 2008, and shall not cause payments to be
made in 2008 that would not otherwise be payable in 2008.   A Participant’s
election under subparagraph (a) shall be considered made when the election
becomes irrevocable.  No election under subparagraph (a) may be made by a
Participant unless such election becomes irrevocable on or prior to December 31,
2008.

(c)

The joint and survivor annuity is only available under clause (a)(II) or (III)
if the Participant designates his or her spouse as beneficiary or obtains
spousal consent to the designation of another beneficiary in the same manner as
under the Basic Plan as part of the Participant’s election. If the spouse, or
beneficiary dies before the Participant’s Separation from Service, the joint and
survivor annuity is canceled and the benefit is paid in the form of a straight
life annuity; provided, that the straight life annuity is actuarially
equivalent, applying reasonable actuarial methods and assumptions, to the joint
and survivor annuity in effect prior to such cancellation, as determined under
Treasury Regulation Section 1.409A-2(b)(2)(ii).

(d)

Except as provided in subsection (B), such Participant may not change the form
and time of payment of such Participant’s Post-Section 409A Benefit under this
Plan after December 31, 2008.

(iv) Notwithstanding the foregoing, in no event shall a distribution option be
available or apply to a Participant’s Pre-Section 409A Benefit if such
distribution option would result in a material modification of the Participant’s
Pre-Section 409A Benefit, as determined under Section 409A of the Code and
Treasury Regulation Section 1.409A-6.

(v)

A lump sum payment of a Participant’s Post-Section 409A Benefit under this
subsection (A) shall be paid on such date as is determined by Sempra Energy
within thirty (30) days following the Participant’s Separation from Service.  If
an annuity payment is elected for purposes of the payment of such Participant’s
Post-Section 409A Benefit under this subsection (A), such Post-Section 409A
Benefit shall be paid monthly, beginning on the last day of the month of the
Participant’s Separation from Service and shall continue to be paid monthly
during the life of the Participant and the life of the Participant’s designated
beneficiary, if any (if such beneficiary survives the Participant).  In all
cases, the monthly benefit shall equal the annual benefit divided by 12.

(B)

Changes in Distribution Option for Certain SERP Participants

A Participant described in subsection (A) may elect to change the form of the
payment of such  Participant’s Post-Section 409A Benefit under this Plan, as
follows:

(i)

The Participant may elect, in writing, to change the form of  payment of such
Participant’s Post-Section 409A Benefit to any of the following options:  (a) a
lump sum, (b) a straight life annuity, (c) a joint and 50% survivor annuity, and
(d) a joint and 100% survivor annuity.  The amount of such optional benefit
under this Plan shall be computed as specified in Section 5 of this Plan using
the interest and mortality factors specified in the Basic Plan.  The
Participant’s election shall be subject to paragraphs (ii), (iii), (iv), (v),
(vi) and (vii).  Except as provided in paragraph (vi), the Participant’s
election under this paragraph (i) shall be irrevocable.  The joint and survivor
annuity is only available under subparagraph (c) or (d) if the Participant
designates his or her spouse as beneficiary or obtains spousal consent to the
designation of another beneficiary in the same manner as under the Basic Plan as
part of the Participant’s election.  If the spouse, or beneficiary dies before
the Participant’s Separation from Service, the joint and survivor annuity
elected under this paragraph (i) is canceled and the benefit is paid in the form
of a straight life annuity; provided, that the straight life annuity is
actuarially equivalent, applying reasonable actuarial methods and assumptions,
to the joint and survivor annuity in effect prior to such cancellation, as
determined under Treasury Regulation Section 1.409A-2(a)(2)(ii).  

(ii)

The Participant’s election under paragraph (i) must be made prior to the
Participant’s Separation from Service.

(iii)

If the Participant’s form of payment, as in effect at the time of election under
paragraph (i), is an annuity, such Participant’s election under paragraph
(i)(b), (c) or (d) (an election of an alternative annuity form of payment) shall
be effective immediately and paragraph (v) shall not apply to such Participant’s
election; provided, that the alternative annuity form of payment elected by the
Participant is actuarially equivalent applying reasonable actuarial methods and
assumptions to the annuity form of payment, as in effect at the time of the
election, as determined under Treasury Regulation Section 1.409A-2(b)(2)(ii).

(iv)

Except as provided in paragraph (iii), the Participant’s election under
paragraph (i) shall not take effect until 12 months after his election is made,
in accordance with Treasury Regulation Section 1.409A-2(b)(1)(i).  If the
Participant has a Separation from Service before the election under paragraph
(i) becomes effective, the election under paragraph (i) shall terminate and the
Participant’s Post-Section 409A Benefit shall be paid in the form of payment as
in effect at the time of the election under paragraph (i).

(v)

Except as provided in paragraph (iii), in the event the Participant’s election
under paragraph (i) becomes effective, the payment of such Participant’s
Post-Section 409A Benefit under the option shall be deferred for a period of
five years from the date such payment would otherwise have been paid (or, in the
case of a life annuity treated as a single payment, five years from the date the
first amount was scheduled to be paid), in accordance with Treasury Regulation
Section 1.409A-2(b)(1)(ii).

(vi)

The Participant may elect to change the annuity option elected under paragraph
(i) to another annuity option specified under paragraph (i) and such election
shall become effective immediately, provided, that such change is made prior to
the commencement of the payment of such Participant’s Post-Section 409A Benefit
under this Plan; and, provided, further, that the annuity form of payment is
actuarially equivalent, applying reasonable actuarial methods and assumptions,
to the annuity form of payment, as in effect at the time of the election, as
determined under Treasury Regulation Section 1.409A-2(b)(2)(ii).

(vii)

Any change in a Participant’s form of payment under this subsection (B) shall be
made in accordance with Treasury Regulation Section 1.409A-2(b).

(C)

Distribution Options for other Participants

Except as provided in subsection (A), in the case of a Participant who first
became an Eligible Employee (as determined under Section 4) on or before
December 31, 2005, the payment of benefits under this Plan shall be made in a
lump sum in accordance with this subsection (C) upon the Participant’s
Separation from Service, unless the Participant elects to receive an optional
annuity form of payment under paragraph (i).  The amount of the Participant’s
lump sum distribution under this Plan shall be computed as specified in Section
5 of this Plan using the actuarial factors specified in the Basic Plan.

(i)

Such a Participant may elect, in writing, payment commencing upon the
Participant’s Separation from Service under any of the following annuity
options:  (a) a straight life annuity, (b) a joint and 50% survivor annuity, and
(c) a joint and 100% survivor annuity.  The amount of such optional annuity
benefit under this Plan shall be computed as specified in Section 5 of this Plan
using the interest and mortality factors specified in the Basic Plan. The
election will be subject to approval of the Senior Human Resources Officer of
Sempra Energy, in his or her discretion, and, if approved, will become effective
and irrevocable on the date of such approval (except as provided in subsection
(D)).  The payment of such Participant’s benefits under this Plan in an annuity
form shall commence upon the Participant’s Separation from Service.

(ii)

A Participant’s election under paragraph (i) may be made with respect to such
Participant’s benefit under this Plan on or after January 1, 2006 and on or
before December 31, 2008 in accordance with the transitional relief under
Section 409A of the Internal Revenue Code and Internal Revenue Service Notices
2006-79 and 2007-86; provided, however, that a Participant’s election made in
2006 shall apply only with respect to payments that would not otherwise be
payable in 2006, and shall not cause payments to be made in 2006 that would not
otherwise be payable in 2006; and, provided, further, that a Participant’s
election made in 2007 shall apply only with respect to payments that would not
otherwise be payable in 2007, and shall not cause payments to be made in 2007
that would not otherwise be payable in 2007; and provided, further, that a
Participant’s election made in 2008 shall apply only with respect to payments
that would not otherwise be payable in 2008, and shall not cause payments to be
made in 2008 that would not otherwise be payable in 2008.  A Participant’s
election under paragraph (i) shall be considered made when the election becomes
irrevocable.  No election under paragraph (i) may be made by a Participant
unless such election becomes irrevocable on or prior to December 31, 2008.

(iii)

The joint and survivor annuity is only available under subparagraphs (i)(b) or
(c) if the Participant designates his or her spouse as beneficiary or obtains
spousal consent to the designation of another beneficiary in the same manner as
under the Basic Plan as part of the Participant’s election. If the spouse, or
beneficiary dies before the Participant’s Separation from Service, the joint and
survivor annuity is canceled and the benefit is paid in the form of a straight
life annuity; provided, that the straight life annuity is actuarially
equivalent, applying reasonable actuarial methods and assumptions, to the joint
and survivor annuity in effect prior to such cancellation, as determined under
Treasury Regulation Section 1.409A-2(b)(2)(ii).

(iv)

Except as provided in subsection (D), such Participant may not change the form
and time of payment of benefits under this Plan after December 31, 2008.

(v)

A lump sum payment under this subsection (C) shall be paid on such date as is
determined by Sempra Energy within thirty (30) days following the Participant’s
Separation from Service.  An annuity under this subsection (C) shall be paid
monthly, beginning on the last day of the month of the Participant’s Separation
from Service and shall continue to be paid monthly during the life of the
Participant and the life of the Participant’s designated beneficiary, if any (if
such beneficiary survives the Participant).  In all cases, the monthly benefit
shall equal the annual benefit divided by 12.  

(D)

Changes in Distribution Option for other Participants

A Participant described in subsection (C) may elect to change the form of the
payment of such Participant’s benefit under this Plan, as follows:

(i)

The Participant may elect, in writing, to change the form of  payment of such
Participant’s benefit to any of the following options:  (a) a lump sum, (b) a
straight life annuity, (c) a joint and 50% survivor annuity, and (d) a joint and
100% survivor annuity.  The amount of such optional benefit under this Plan
shall be computed as specified in Section 5 of this Plan using the interest and
mortality factors specified in the Basic Plan.  The Participant’s election shall
be subject to paragraphs (ii), (iii), (iv), (v), (vi) and (vii).  Except as
provided in paragraph (vi), the Participant’s election under this paragraph (i)
shall be irrevocable.  The joint and survivor annuity is only available under
subparagraph (c) or (d) if the Participant designates his or her spouse as
beneficiary or obtains spousal consent to the designation of another beneficiary
in the same manner as under the Basic Plan as part of the Participant’s
election.  If the spouse, or beneficiary dies before the Participant’s
Separation from Service, the joint and survivor annuity is canceled and the
benefit is paid in the form of a straight life annuity; provided, that the
straight life annuity is actuarially equivalent, applying reasonable actuarial
methods and assumptions, to the joint and survivor annuity in effect prior to
such cancellation, as determined under Treasury Regulation Section
1.409A-2(b)(2)(ii).  

(ii)

The Participant’s election under paragraph (i) must be made prior to the
Participant’s Separation from Service.

(iii)

If the Participant’s form of payment, as in effect at the time of the election
under paragraph (i), is an annuity, such Participant’s election under paragraph
(i)(b), (c) or (d) (an election of an alternative annuity form of payment) shall
be effective immediately and paragraph (v) shall not apply to such Participant’s
election; provided, that the alternative annuity form of payment elected by the
Participant is actuarially equivalent applying reasonable actuarial methods and
assumptions to the annuity form of payment, as in effect at the time of the
election, as determined under Treasury Regulation Section 1.409A-2(b)(2)(ii).

(iv)

Except as provided in paragraph (iii), the Participant’s election under
paragraph (i) shall not take effect until 12 months after the date his or her
election is made in accordance with Treasury Regulation Section
1.409A-2(b)(1)(i).  If the Participant has a Separation from Service before the
election under paragraph (i) becomes effective, the election under paragraph (i)
shall terminate and the Participant’s benefit shall be paid in the form of
payment as in effect at the time of the election under paragraph (i).

(v)

Except as provided in paragraph (iii), in the event the Participant’s election
under paragraph (i) becomes effective, the payment of such Participant’s benefit
under the option be deferred for a period of five years from the date such
payment would otherwise have been paid (or, in the case of a life annuity
treated as a single payment, five years from the date the first amount was
scheduled to be paid), in accordance with Treasury Regulation Section
1.409A-2(b)(1)(ii).

(vi)

The Participant may elect to change an annuity form of payment elected under
paragraph (i) to another annuity form of payment specified under paragraph
(i)(b), (c) or (d), and such election shall be effective immediately; provided,
that such change is made prior to the commencement date of the payment of
benefits under this Plan; and, provided, further, that the annuity form of
payment is actuarially equivalent applying reasonable actuarial methods and
assumptions to the annuity form of payment, as in effect at the time of the
election, as determined under Treasury Regulation Section 1.409A-2(b)(2)(ii).

(vii)

Any change in a Participant’s form of payment under this subsection (D) shall be
made in accordance with Treasury Regulation Section 1.409A-2(b).

(E)

Pre-Section 409A Benefit; Post-Section 409A Benefit.

(i)

In the case of a Participant described in subsection (A), such Participant’s
“Pre-Section 409A Benefit” means the portion of such Participant’s benefit under
the Plan, if any, to which such Participant had a legal binding right, and which
was earned and vested, as of December 31, 2004, determined in accordance with
Section 409A of the Code and Treasury Regulation Section 1.409A-6.  Such
Participant’s “Pre-Section 409A Benefit” shall be determined by the terms of the
Plan and the Basic Plan, as in effect as of October 3, 2004.

Such Participant’s “Pre-Section 409A Benefit” shall equal the present value of
the amount to which such Participant would have been entitled under the Plan if
such Participant voluntarily terminated services without cause on December 31,
2004, and received a payment of the benefits available from the Plan on the
earliest possible date allowed under the Plan to receive a payment of benefits
following the termination of services, and received the benefits in the form
with maximum value.  Notwithstanding the foregoing, for any subsequent taxable
year of such Participant, the “Pre-Section 409A Benefit” shall increase to equal
the present value of the benefit such Participant actually becomes entitled to,
in the form and at the time actually paid, determined under the terms of the
Plan (including applicable limits under the Code), as in effect on October 3,
2004, without regard to any further services rendered by such Participant after
December 31, 2004, or any other events affecting the amount of or the
entitlement to benefits (other than such Participant’s election with respect to
the time or form of an available benefit).  Such present value shall be computed
using the applicable actuarial assumptions and methods under the Basic Plan to
the extent in accordance with Treasury Regulation Section 1.409A-6(a)(3)(i), or
such other reasonable actuarial assumptions and methods as are permitted under
Treasury Regulation Section 1.409A-6(a)(3)(i).

(ii)

In the case of a Participant described in subsection (A), such Participant’s
“Post-Section 409A Benefit” means such Participant’s benefit under this Plan,
less such Participant’s Pre-Section 409A Benefit (if any).  In the case of any
other Participant, such Participant’s “Post-Section 409A Benefit” means such
Participant’s benefit under this Plan.

(F)

Distributions to Newly Eligible Employees

(i)

In the case of a Participant who first becomes an Eligible Employee under this
Plan (as determined under Section 4) after December 31, 2005, the payment of
benefits under this Plan shall be made in a lump sum in accordance with this
subsection (F) upon the Participant’s Separation from Service, except as
provided in paragraph (ii).

(ii)

The Participant may elect to change the form of the payment of benefits under
this Plan, as follows:

(a)

The Participant may elect, in writing, to change the form of payment of such
benefit to any of the following annuity options:  (I) a straight life annuity,
(II) a joint and 50% survivor annuity, and (III) a joint and 100% survivor
annuity.  The amount of such optional annuity benefit under this Plan shall be
computed as specified in Section 5 of this Plan using the interest and mortality
factors specified in the Basic Plan.  The Participant’s election shall be
subject to subparagraphs (b), (c), (d), (e) and (f).  Except as provided in
subparagraph (e), the Participant’s election under this subparagraph (a) shall
be irrevocable.  The joint and survivor annuity is only available under clause
(II) or (III) if the Participant designates his or her spouse as beneficiary or
obtains spousal consent to the designation of another beneficiary in the same
manner as under the Basic Plan as part of the Participant’s election.  If the
spouse, or beneficiary dies before the Participant’s Separation from Service,
the joint and survivor annuity is canceled and the benefit is paid in the form
of a straight life annuity; provided, that the straight life annuity is
actuarially equivalent, applying reasonable actuarial methods and assumptions,
to the joint and survivor annuity in effect prior to such cancellation, as
determined under Treasury Regulation Section 1.409A-2(b)(2)(ii).

(b)

The Participant’s election under subparagraph (a) must be made prior to the
Participant’s Separation from Service.

(c)

The Participant’s election under subparagraph (a) shall not take effect until
12 months after his election is made in accordance with Treasury Regulation
Section 1.409A-2(b)(1)(i).  If the Participant has a Separation from Service
before the election under subparagraph (a) becomes effective, the election under
subparagraph (a) shall terminate and the Participant’s benefit shall be paid in
a lump sum payment under paragraph (i).

(d)

In the event the Participant’s election under subparagraph (a) becomes
effective, the payment of benefits under the annuity option shall be deferred
for a period of five years from the date such payment would otherwise have been
paid (or, in the case of a life annuity treated as a single payment, five years
from the date the first amount was scheduled to be paid), in accordance with
Treasury Regulation Section 1.409A-2(b)(1)(ii).

(e)

The Participant may elect to change the annuity form of payment elected under
subparagraph (a) to another annuity form of payment specified under subparagraph
(a) and such election shall be effective immediately; provided, that such change
is made prior to the commencement of the payment of benefits under this Plan;
and, provided, further, that the annuity form of payment is actuarially
equivalent applying reasonable actuarial methods and assumptions to the annuity
form of payment, as in effect at the time of the election, as determined under
Treasury Regulation Section 1.409A-2(b)(2)(ii).

(f)

Any change in a Participant’s form of payment under this paragraph (ii) shall be
in accordance with Treasury Regulation Section 1.409A-2(b).

(iii)

A lump sum payment under paragraph (F)(i) shall be paid on such date as is
determined by Sempra Energy within thirty (30) days following the Participant’s
Separation from Service.  An annuity under this subsection (F) shall be paid
monthly, beginning on the last day of the month in which the date determined
under subparagraph (F)(i)(d) occurs and shall continue to be paid monthly during
the life of the Participant and the life of the Participant’s designated
beneficiary, if any (if such beneficiary survives the Participant).  In all
cases, the monthly benefit shall equal the annual benefit divided by 12.

 (G)

Death Benefits

If a Participant dies prior to the commencement of benefits under this Plan on
or after his or her Separation from Service (or, in the case of a Participant
described in subsection (A), such Participant’s Pre-Section 409A Death Benefit
(if any), prior to the commencement of benefits under this Plan on or after such
Participant’s Retirement Date or Termination), the payment of death benefits to
such Participant’s beneficiary(ies) shall be made in accordance with this
subsection (G).

(i)

The death benefits payable to such Participant’s beneficiary(ies) under this
subsection (G) shall be computed as specified in Section 5 of this Plan using
the actuarial factors specified in the Basic Plan.

(ii)

The death benefits payable to such Participant’s beneficiary(ies) under this
subsection (G) shall be in lieu of any benefits that would have been payable
under the other provisions of this Section 6, if such Participant had survived
until the date of commencement of benefits.

(iii)

The death benefits payable to such Participant’s beneficiary(ies) under this
subsection (G) shall be payable in a lump sum payment on such date as is
determined by Sempra Energy during the thirty (30) day period commencing upon
such Participant’s death; provided, however, that, in the case of a Participant
described in subsection (A), such Participant’s Pre-Section 409A Death Benefit
(if any) shall be paid in the same payment form and at the same time as the
payment of pre-commencement death benefits on behalf of such Participant under
the Basic Plan and such Participant’s Post-Section 409A Death Benefit shall be
payable in a lump sum on such date as is determined by Sempra Energy during the
thirty (30) day period commencing upon such Participant’s death.

 (iv)

For purposes of this subsection (G) and Section 9,

(a)

in the case of a Participant described in subsection (A), such Participant’s
“Pre-Section 409A Death Benefit” means the portion of the death benefits payable
to such Participant’s beneficiary(ies) under this subsection (G), if any, to
which such Participant had a legal binding right, and which was earned and
vested, as of December 31, 2004, determined in accordance with Section 409A of
the Code and Treasury Regulation Section 1.409A-6.  Such Participant’s
“Pre-Section 409A Death Benefit” shall be determined by the terms of the Plan
and the Basic Plan, as in effect as of October 3, 2004 and in a manner
consistent with paragraph (E)(i) and Treasury Regulation Section
1.409A-6(a)(3)(i), and

(b)

in the case of a Participant described in subsection (A), such Participant’s
“Post-Section 409A Death Benefit” means the death benefit payable to such
Participant’s beneficiary(ies) under this subsection (G), less such
Participant’s Pre-Section 409A Death Benefit.

(H)

Mandatory Distribution

Notwithstanding subsections (A), (B), (C), (D) and (F), if actuarial value of a
Participant’s benefit hereunder as of the date of the Participant’s Separation
from Service is less than $10,000, the benefit shall be distributed in a lump
sum upon the Participant’s Separation from Service in accordance with Treasury
Regulation Section 1.409A-3(j)(4)(v).  Such lump sum payment shall be paid on
such date as is determined by Sempra Energy within thirty (30) days following
the Participant’s Separation from Service.  Such lump sum payment shall be made
only if such payment satisfies the requirement of Treasury Regulation Section
1.409A-3(j)(4)(v)(A).

(I)

Distributions to Specified Employees

Notwithstanding the foregoing, in the case of a Participant who is a Specified
Employee on the date of such Participant’s Separation from Service, the payment
of such Participant’s Post-Section 409A Benefit to such Participant shall not be
made before the date which is six months after the date of such Participant’s
Separation from Service (or, if earlier, the date such Participant’s death) in
accordance with Section 409A(a)(2)(B)(i) of the Code and the Treasury
Regulations thereunder.  Any payment of such Participant’s Post-Section 409A
Benefit to which such Participant otherwise would have been entitled during the
first six months following the date of such Participant’s Separation from
Service shall be accumulated (with interest at the annual rate of interest on
30-year Treasury securities for the November next preceding the first day of the
calendar year in which such Participant’s Separation from Service occurs) and
paid on the first day of the seventh month following the date of such
Participant’s Separation from Service (or, if earlier, the date of such
Participant’s death) in accordance with Section 409A(a)(2)(B)(i) and the
Treasury Regulations thereunder.

(J)

Prohibition on Acceleration of Distributions

The time or schedule of payment of any payment of a Participant’s Post-Section
409A Benefit under the Plan shall not be subject to acceleration, except as
provided under Treasury Regulations promulgated in accordance with Section
409A(a)(3) of the Code.

(K)

Conformance of Time and Form of Payment under the SERP

(i)

If a Participant is or becomes a participant in the SERP, the payment of such
Participant’s “Post-Section 409A Supplemental Retirement Benefit” (as defined in
the SERP) to such Participant under the SERP shall be made or commence on the
date of the payment or commencement of such Participant’s Post-Section 409A
Benefit under this Plan, and the form of payment of such Participant’s
“Post-Section 409A Supplemental Retirement Benefit” (as defined in the SERP)
under the SERP shall be the same as the form of payment of such Participant’s
Post-Section 409A Benefit under this Plan.

(ii)

In the event that a Participant elects to change the form of the payment of such
Participant’s Post-Section 409A Benefit under this Plan, such Participant shall
be deemed to have elected to change the form of the payment of such
Participant’s “Post-Section 409A Supplemental Retirement Benefit” (as defined in
the SERP) under the SERP to the form of the payment of such Participant’s
Post-Section 409A Benefit under this Plan.  Any such election shall be subject
to the provisions of subsection (B), (D) or (F), as applicable, and the
provisions of the SERP and, in any event, the time and form of payment of such
Participant’s “Post-Section 409A Supplemental Retirement Benefit” under the SERP
shall be the same as the time and form of payment of such Participant’s
Post-Section 409A Benefit under this Plan.

7.

EMPLOYEE’S RIGHTS

An Employee shall not be entitled to any payments from the Basic Plan on the
basis of any benefits to which he may be entitled under this Plan. Benefits
under this Plan shall be payable only from the general assets of the Company.

8.

AMENDMENT AND DISCONTINUANCE

The Company expects to continue this Plan indefinitely, but reserves to the
Compensation Committee the right to amend or discontinue the Plan if, in the
Compensation Committee's sole judgment, such a change is deemed necessary or
desirable. However, if the Compensation Committee shall amend or discontinue
this Plan, the Company shall be liable for any benefits accrued under this Plan
as of the date of such amendment or termination determined on the basis of each
employee's presumed termination of employment as of such date. Provided further,
that if the Department of Labor determines, or issues regulations under which,
the Plan would be subject to Parts 2 and/or 3 of Title I of ERISA, the
Compensation Committee may taken such action or actions as it deems appropriate.
Such actions may include, but are not limited to, modification, termination or
partial termination of the Plan. In the event of such modification, termination,
or partial termination, the Compensation Committee may make immediate
distribution of the benefits of some or all of the Participant’s benefits, as it
deems necessary or appropriate, to the extent such distribution is in accordance
with Section 409A of the Code and the Treasury Regulations thereunder.

9.

DEFINITIONS

“Basic Plan” means the Sempra Energy Cash Balance Plan, as amended from time to
time.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” means Sempra Energy and any successor corporation.  “Company” shall
also include each corporation which is a member of a controlled group of
corporations (within the meaning of Section 414(b) of the Code) of which Sempra
Energy is a member, if such corporation maintains the Basic Plan for the benefit
of its employees.

“Eligible Employee” means an Employee who has become eligible for benefits under
the Plan, as determined in Section 4.

“Employee” means an individual who is an employee of the Company.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“Lump Sum Option”  shall have the meaning set forth in the Basic Plan.

“Retirement Date” shall have the meaning set forth in the Basic Plan.

“Separation from Service”, with respect to a Participant (or another Service
Provider) means the Participant’s (or such Service Provider’s) “separation from
service,” as defined in Treasury Regulation Section 1.409A-1(h).  

Effective as of January 1, 2008, and in accordance with Treasury Regulation
Section 1.409A-1(h)(3) (and the transitional relief under Internal Revenue
Service Notice 2005-1, the proposed regulations under Section 409A of the Code
and Internal Revenue Service Notice 2006-79), and in connection with the
formation of RBS Sempra Commodities (as defined in Section 10), with respect to
the benefits payable under this Plan to a Participant who is an employee of SET
LLC or SES (each, as defined in Section 11), and who is a Transferred Employee
(as defined in Section 10), the foregoing definition of “Separation from
Service” shall be applied by determining the “service recipient,” as defined in
Treasury Regulation Section 1.409A-1(g), by substituting the language “at least
20%” for the language “at least 80%” and applying Sections 1563(a)(1), (2) and
(3) for purposes of determining a controlled group of corporations under Section
414(b) of the Code and in applying Treasury Regulation Section 1.414(c)-2 for
purposes of determining trades or businesses (whether or not incorporated) that
are under common control for purposes of Section 414(c) of the Code.  This
paragraph shall not apply with respect to the benefits payable under this Plan
to any other Participant.

“SERP” means the Sempra Energy Supplemental Executive Retirement Plan, as
amended from time to time.

“Service Provider” means a Participant or any other “service provider,” as
defined in Treasury Regulation Section 1.409A-1(f).

“Service Recipient,” with respect to a Participant, means the Company and all
persons considered part of the “service recipient,” as defined in Treasury
Regulation Section 1.409A-1(g), as determined from time to time.  As provided in
Treasury Regulation Section 1.409A-1(g), the “Service Recipient” shall mean the
person for whom the services are performed and with respect to whom the legally
binding right to compensation arises, and all persons with whom such person
would be considered a single employer under Section 414(b) or 414(c) of the
Code.

“Specified Employee” means a Service Provider who, as of the date of the Service
Provider’s Separation from Service, is a “Key Employee” of the Service Recipient
any stock of which is publicly traded on an established securities market or
otherwise.  For purposes of this definition, a Service Provider is a “Key
Employee” if the Service Provider meets the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the
Treasury Regulations thereunder and disregarding Section 416(i)(5) of the Code)
at any time during the Testing Year.  If a Service Provider is a “Key Employee”
(as defined above) as of a Specified Employee Identification Date, the Service
Provider shall be treated as “Key Employee” for the entire twelve (12) month
period beginning on the Specified Employee Effective Date.  For purposes of this
definition, a Service Provider’s compensation for a Testing Year shall mean such
Service Provider’s compensation, as determined under Treasury Regulation Section
1.415(c)-2(a) (and applied as if the Service Recipient were not using any safe
harbor provided in Treasury Regulation Section 1.415(c)-2(d), were not using any
of the elective special timing rules provided in Treasury Regulation Section
1.415(c)-2(e), and were not using any of the elective special rules provided in
Treasury Regulation Section 1.415(c)-2(g)), from the Service Recipient for such
Testing Year.  The “Specified Employees” shall be determined in accordance with
Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation Section
1.409A-1(i).

“Specified Employee Effective Date” means the first day of the fourth month
following the Specified Employee Identification Date.  The Specified Employee
Effective Date may be changed by the Company, in its discretion, in accordance
with Treasury Regulation Section 1.409A-1(i)(4).

“Specified Employee Identification Date”, for purposes of Treasury Regulation
Section 1.409A-1(i)(3), means December 31.  The “Specified Employee
Identification Date” shall apply to all “nonqualified deferred compensation
plans” (as defined in Treasury Regulation Section 1.409A-1(a)) of the Service
Recipient and all affected Service Providers.  The “Specified Employee
Identification Date” may be changed by Sempra Energy, in its discretion, in
accordance with Treasury Regulation Section 1.409A-1(i)(3).

“Termination” shall have the meaning set forth in the Basic Plan.

“Testing Year” means the twelve (12) month period ending on the Specified
Employee Identification Date, as determined from time to time.

10.

EMPLOYEES OF SEMPRA ENERGY TRADING CORPORATION AND SEMPRA ENERGY SOLUTIONS LLC

This Section 10 includes special provisions relating to the benefits of the
Participants who are employed by Sempra Energy Trading Corporation (“SET”) and
Sempra Energy Solutions LLC (“SES”).

(A)

Background

SET and SES maintain the Basic Plan for the benefit of their respective eligible
employees.  Certain SET and SES employees are Participants in this Plan.  

On July 9, 2007, Sempra Energy, Sempra Global, Sempra Energy Trading
International, B.V. (“SETI”) and The Royal Bank of Scotland plc (“RBS”) entered
into the Master Formation and Equity Interest Purchase Agreement, dated as of
July 9, 2007 (the “Master Formation Agreement”), which provides for the
formation of a partnership, RBS Sempra Commodities LLP (“RBS Sempra
Commodities”), to purchase and operate Sempra Energy’s commodity-marketing
businesses.  Pursuant to a Master Formation Agreement, RBS Sempra Commodities
will be formed as a United Kingdom limited liability partnership and RBS Sempra
Commodities will purchase Sempra Energy’s commodity-marketing subsidiaries.  

Prior to the Closing, SET will be converted into a limited liability company
(“SET LLC”).  Following such conversion, SET employees will be employed by SET
LLC.  Prior to the Closing, SES will become a wholly-owned subsidiary of SET
LLC.

Also, prior to the Closing, Sempra Energy will own, directly or indirectly
through wholly-owned subsidiaries, 100% of the membership interests in SET LLC
and SES.  Prior to the Closing, SET LLC and SES will be disregarded entities for
federal income tax purposes.

Effective as of the Closing, RBS Sempra Commodities will purchase 100% of the
membership interests in SET LLC.  

As provided in the Master Formation Agreement, an employee of SET LLC who is
actively at work on the Closing Date will continue to be employed by SET LLC
immediately after the Closing Date, and an employee of SES who is actively at
work on the Closing Date will continue to be employed by SES (each such employee
is referred to as a Transferred Employee).  

Also, as provided in the Master Formation Agreement, with respect to an employee
of SET LLC or SES who is not actively at work on the Closing Date because such
employee is on approved short-term disability or long-term disability leave in
accordance with the Sempra Plans (such employee is referred to as an Inactive
Employee), if such Inactive Employee returns to active work at the conclusion of
such leave, and in any case within six months following the Closing Date (or
such longer period as is required by applicable law), such Inactive Employee
shall become a Transferred Employee as of the date of such person’s return to
active employment with the SET LLC or SES (such date is referred to as the
Transfer Date).

Effective as of the Closing, SET LLC will be a wholly-owned subsidiary of RBS
Sempra Commodities, SES will be an indirect, wholly-owned subsidiary of RBS
Commodities, Sempra Global and SETI will be partners in RBS Sempra Commodities,
and Sempra Energy will own, indirectly through wholly-owned subsidiaries, at
least a 50% profits interest in RBS Sempra Commodities.

(B)

Cessation of Participation by SET LLC and SES; Cessation of Benefit Accruals

(i)

Prior to the Closing, SET LLC shall be a participating employer in this Plan.
 Effective as of the Closing Date, SET LLC will cease to be a participating
employer in this Plan.

(ii)

Prior to the Closing, SES shall be a participating employer in this Plan.
 Effective as of the Closing Date, SES will cease to be a participating employer
in this Plan.

(iii)

Effective as of the Closing Date (or the Transfer Date, if applicable), a
Transferred Employee who is a Participant shall cease to accrue any further
benefits as an active participant in this Plan and shall have no rights to
continue as an active participant under this Plan (without derogation of the
rights of such Transferred Employee as a vested, terminated Participant in this
Plan).

(iv)

No Transferred Employee shall become a Participant on or after the Closing Date.

(C)

Separation from Service

(i)

Effective as of the Closing, RBS Sempra Commodities will be a member of a group
of trades or businesses (whether or not incorporated) under common control for
purposes of Section 414(c) of the Code and Treasury Regulation Section
1.414(c)-2, as determined under Treasury Regulation Section 1.409A-1(h)(3), that
includes Sempra Energy and its wholly-owned subsidiaries.  Consequently,
effective as of the Closing, RBS Sempra Commodities will be included in the
“service recipient” that includes Sempra Energy and its wholly-owned
subsidiaries, as defined under Treasury Regulation Section 1.409A-1(h)(3).  

(ii)

A Participant who is an employee of SET LLC or SES, and who is a Transferred
Employee effective as of the Closing Date, will not have a Separation from
Service solely as a result of the purchase of the membership interests of SET
LLC by RBS Sempra Commodities effective as of the Closing.

(iii)

A Participant who is an employee of SET LLC or SES, who is an Inactive Employee,
and who becomes a Transferred Employee effective on a Transfer Date after the
Closing Date, will not have a Separation from Service solely as a result of the
purchase of the membership interests of SET LLC by  RBS Sempra Commodities or
becoming a Transferred Employee on a Transfer Date after the Closing Date.

(iv)

For purposes of the Plan, a Participant who is an employee of SET LLC or SES,
and who is or becomes a Transferred Employee, will have a Separation from
Service on or after the Closing Date (or the Transfer Date, if applicable), as
determined under Section 10 and Treasury Regulation Section 1.409A-1(h).

(D)

Certain Defined Terms

For purposes of this Section 11, the terms “Closing,” “Closing Date,” “Inactive
Employee,” “Sempra Plans,” “Transferred Employees” and “Transfer Date” shall
have the meanings ascribed to such terms under the Master Formation Agreement.

11.

SECTION 409A OF THE CODE

(A)

This Plan shall be interpreted, construed and administered in a manner that
satisfies the requirements of Sections 409A(a)(2), (3) and (4) of the Code and
the Treasury Regulations thereunder (subject to the transitional relief under
Internal Revenue Service Notice 2005-1, the Proposed Regulations under Section
409A of the Code, Internal Revenue Service Notices 2006-79 and 2007-86 and other
applicable authority issued by the Internal Revenue Service).  As provided in
Internal Revenue Service Notices 2006-79 and 2007-86, notwithstanding any other
provision of this Plan, with respect to an election or amendment to change a
time and form of payment under the Plan made on or after January 1, 2006 and on
or before December 31, 2006, the election or amendment shall apply only to
amounts that would not otherwise be payable in 2006 and shall not cause an
amount to be paid in 2006 that would not otherwise be payable in 2006; and, with
respect to an election or amendment to change a time and form of payment under
this Plan made on or after January 1, 2007 and on or before December 31, 2007,
the election or amendment may apply only to amounts that would not otherwise be
payable in 2007 and may not cause an amount to be paid in 2007 that would not
otherwise be payable in 2007; and, with respect to an election or amendment to
change a time and form of payment under this Plan made on or after January 1,
2008 and on or before December 31, 2008, the election or amendment may apply
only to amounts that would not otherwise be payable in 2008 and may not cause an
amount to be paid in 2008 that would not otherwise be payable in 2008.  If
Sempra Energy determines that any deferred compensation amounts under this Plan
subject to Section 409A of the Code do not comply with Sections 409A(a)(2), (3)
and (4) of the Code, the Treasury Regulations thereunder and other applicable
authority issued by the Internal Revenue Service, Sempra Energy may amend this
Plan, or take such other actions as Sempra Energy deems reasonably necessary or
appropriate, to ensure that such amounts comply with the requirements of Section
409A of the Code, the Treasury Regulations thereunder and other applicable
authority issued by the Internal Revenue Service.  In the case of any deferred
compensation amounts under this Plan that are subject to Section 409A of the
Code, if any provision of the Plan would cause such amounts to fail to so
comply, such provision shall be deemed amended, or shall not be effective and
shall be null and void, to the extent necessary to cause such amounts to comply
with Section 409A(a)(2), (3) and (4) of the Code, the Treasury Regulations
thereunder and other applicable authority issued by the Internal Revenue
Service.

(B)

The Plan provides that benefits under the Plan are determined under the formula
for determining benefits under the Basic Plan (which is a qualified employer
plan, as defined in Treasury Regulation Section 1.409A-1(a)(2)), applied without
regard to the limitations applicable to the Basic Plan under Sections 401(a)(17)
and 415 of the Code, and after an offset of the benefits provided under the
Basic Plan.  Accordingly, the Plan is intended to be a nonqualified deferred
compensation plan subject to Treasury Regulation Sections 1.409A-2(a)(9) and
1.409A-3(j)(5).

12.

CLAIMS PROCEDURE

(A)

Claim

A Participant, beneficiary or other person who believes that he is being denied
a benefit to which he is entitled under this Plan (hereinafter referred to as
“Claimant”) may file a written request for such benefit with the Compensation
Committee, setting forth his claim.  The request must be addressed to the
Compensation Committee at Sempra Energy at its then principal place of business.
 The claims procedure of this Section shall be applied in accordance with
Section 503 of ERISA and Department of Labor Regulation Section 2560.503-1.  A
Participant, beneficiary or other person may assert a claim, or request review
of the denial of a claim, through such Participant’s, beneficiary’s or person’s
authorized representative, provided that such Participant, beneficiary or person
has submitted a written notice evidencing the authority of such representative
to the Compensation Committee.  

A Claimant or his duly authorized representative shall submit his claim under
the Plan in writing to the Compensation Committee.  The Claimant may include
documents, records or other information relating to the claim for review by the
Compensation Committee in connection with such claim.

(B)

Claim Decision

The Compensation Committee shall review the Claimant’s claim (including any
documents, records or other information submitted with such claim) and determine
whether such claim shall be approved or denied in accordance with the Plan.

Upon receipt of a claim, the Compensation Committee shall advise the Claimant
that a claim decision shall be forthcoming within 90 days and shall, in fact,
deliver such claim decision within such period.  The Compensation Committee may,
however, extend the claim decision period for an additional 90 days for special
circumstances.  If the Compensation Committee extends the claim decision period,
the Compensation Committee shall provide the Claimant with written notice of
such extension prior to the end of the initial 90 day period.  The extension
notice shall indicate the special circumstances requiring the extension of time
and the date by which the Compensation Committee expects to render a claim
decision.

If the claim is denied in whole or in part, the Compensation Committee shall
inform the Claimant in writing, using language calculated to be understood by
the Claimant, setting forth: (i) the specified reason or reasons for such
denial; (ii) references to the specific provisions of this Plan on which such
denial is based; (iii) a description of any additional material or information
necessary for the Claimant to perfect his claim and an explanation of why such
material or such information is necessary; and (iv) a description of the Plan’s
procedures for review and the time limits applicable to such procedures,
including a statement of the Claimant’s right to bring a civil action under
Section 502(a) of ERISA following a denial of the review of the denial of the
claim.

The Claimant may request a review of any denial of the claim in writing to the
Compensation Committee within 60 days after receipt of the Compensation
Committee’s notice of denial of claim.  The Claimant’s failure to appeal the
denial of the claim by the Compensation Committee in writing within the 60 day
period shall render the Compensation Committee’s determination final, binding,
and conclusive.

(C)

Request for Review

With 60 days after the receipt by the Claimant of the denial of the claim
described above, the Claimant may request in writing a review the determination
of the Compensation Committee.  Such review shall be completed by the
Compensation Committee.  Such request must be addressed to the Compensation
Committee of Sempra Energy, at its then principal place of business.  

The Claimant shall be afforded the opportunity to submit written comments,
documents, records, and other information relating to the claim, and the
Claimant shall be provided, upon request and free of charge, reasonable access
to all documents, records, and other information relevant to the Claimant’s
claim.  A document, record or other information shall be considered “relevant”
to the claim, as provided in Department of Labor Regulation Section
2560.503-1(m)(8).  The review by the Compensation Committee shall take into
account all comments, documents, records, and other information submitted by the
Claimant, without regard to whether such information was submitted or considered
in the Compensation Committee’s initial determination with respect to the claim.
 

The Compensation Committee shall advise the Claimant in writing of the
Compensation Committee’s determination of the review within 60 days of the
Claimant’s written request for review, unless special circumstances (such as a
hearing) would make the rendering of a determination within the 60 day period
infeasible, but in no event shall the Compensation Committee render a
determination regarding the denial of a claim later than 120 days after its
receipt of a request for review.  If an extension of time for review is required
because of special circumstances, written notice of the extension shall be
furnished to the Claimant prior to the date the extension period commences.  The
extension notice shall indicate the special circumstances requiring the
extension of time and the date by which the Compensation Committee expects to
render a review decision.

(D)

Review of Decision

The Compensation Committee shall inform the Claimant in writing, in a manner
calculated to be understood by the Claimant, the decision on the review of the
denial of the claim, setting forth:  (i) the specific reasons for the decision,
(ii) if the claim is denied, reference to the specific Plan provisions on which
the denial of the claim is based; (iii) a statement that the Claimant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the
Claimant’s claim (and a document, record or other information shall be
considered “relevant” to the benefits claim, as provided in Department of Labor
Regulation Section 2560.503-1(m)(8)); and (iv) a statement describing Claimant’s
right to bring an action under Section 502(a) of ERISA.

13.

MISCELLANEOUS

(A)

Unsecured General Creditor

Participants and their beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, claims, or interest in any specific property or
assets of the Company.  No assets of the Company shall be held in any way as
collateral security for the fulfilling of the obligations of the Company under
this Plan.  Any and all of the Company’s assets shall be, and remain, the
general unpledged, unrestricted assets of the Company.  The Company’s obligation
under the Plan shall be merely that of an unfunded and unsecured promise of the
Company to pay money in the future, and the rights of the Participants and
Beneficiaries shall be no greater than those of unsecured general creditors.  It
is the intention of the Company that this Plan be unfunded for purposes of the
Code and Title I of ERISA.

(B)

Restriction Against Assignment

The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or entity.  No right,
title or interest in the Plan or in any account may be sold, pledged, assigned
or transferred in any manner other than by will or the laws of descent and
distribution.  No right, title or interest in the Plan or in any benefit under
the Plan shall be liable for the debts, contracts or engagements of the
Participant or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

Notwithstanding the provisions of this subsection (B), a Participant’s benefit
may be transferred pursuant to a domestic relations order that constitutes a
“qualified domestic relations order” as defined by the Code or Title I of ERISA.

(C)

Withholding

There shall be deducted from each payment made under the Plan payable to the
Participant (or beneficiary) all taxes which are required to be withheld by the
Company in respect to such payment or this Plan.  The Company shall have the
right to reduce any payment (or compensation) by the amount of such of cash
sufficient to provide the amount of said taxes.

(D)

Governing Law

This Plan shall be construed, governed and administered in accordance with the
ERISA and, to the extent not preempted by ERISA, the laws of the State of
California (without regard to the conflicts of laws principles thereof).

(E)

Receipt of Release

Any payment to a Participant or the Participant’s beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full satisfaction
of all claims against the Compensation Committee and the Company.  The Committee
may require such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect prior to the payment
date specified under the Plan.

(F)

Payments on Behalf of Persons Under Incapacity

In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Compensation Committee, is considered by reason of
physical or mental condition to be unable to give a valid receipt therefore, the
Compensation Committee may direct that such payment be made to any person found
by the Compensation Committee, in its sole judgment, to have assumed the care of
such person.  Any payment made pursuant to such termination shall constitute a
full release and discharge of the Compensation Committee and the Company.

(G)

Limitation of Rights

Neither the establishment of the Plan nor any modification thereof, nor the
creating of any fund or account, nor the payment of any benefits shall be
construed as giving to any Participant or other person any legal or equitable
right against the Company except as provided in the Plan.  In no event shall the
terms of employment of any Participant be modified or in any be effected by the
provisions of the Plan.

(H)

Notice

Any notice or filing required or permitted to be given to the Compensation
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail, to the principal office of the Company,
directed to the attention of the General Counsel and Secretary of Sempra Energy.
 Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

(I)

Errors and Misstatements

In the event of any misstatement or omission of fact by a Participant to the
Compensation Committee or any clerical error resulting in payment of benefits in
an incorrect amount, the Compensation Committee shall promptly cause the amount
of future payments to be corrected upon discovery of the facts and shall pay or,
if applicable, cause the Plan to pay, the Participant or any other person
entitled to payment under the Plan any underpayment in a lump sum or to recoup
any overpayment from future payments to the Participant or any other person
entitled to payment under the Plan in such amounts as the Compensation Committee
shall direct or to proceed against the Participant or any other person entitled
to payment under the Plan for recovery of any such overpayment

(J)

Pronouns and Plurality

The masculine pronoun shall include the feminine pronoun, and the singular the
plural where the context so indicates.

(K)

Severability

In the event that any provision of the Plan shall be declared unenforceable or
invalid for any reason, such unenforceability or invalidity shall not affect the
remaining provisions of the Plan but shall be fully severable, and the Plan
shall be construed and enforced as if such unenforceable or invalid provision
had never been included herein.

(L)

Headings

Headings and subheadings in this Plan are inserted for convenience of reference
only and are not to be considered in the construction of the provisions hereof.

Executed at San Diego, California this 11th day of December, 2008.

SEMPRA ENERGY

By:

______________________________

G. Joyce Rowland

Sr. Vice President, Human Resources