S&P lowers San Diego Gas

S&P said it lowered the long-term issuer credit rating on San Diego Gas & Electric Co., along with the rating on its unsecured debt to BBB+ from A-.

All of the ratings and negative outlook on parent, Sempra Energy, are unchanged.

The agency also said it revised San Diego Gas's business risk profile to strong from excellent, and reassessed its relationship with its parent Sempra Energy.

The outlook is negative, reflecting the unique and elevated credit risks that California's electric utilities face because of climate change, their susceptibility to frequent and devastating wildfires and the legal doctrine of inverse condemnation, S&P said.

The agency said it could lower the rating on San Diego Gas by one or more notches if regulators do not take concrete steps to explicitly address these growing risks before the start of the 2019 wildfire season.

S&P said is reexamining its assessment of California's regulatory construct for electric utilities following news that PG&E Corp. will file for reorganization under Ch. 11 in U.S. bankruptcy court.

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