Sempra Energy Trading Teams Up With City of Burbank

Sempra Energy Trading, the wholesale energy marketing unit of Sempra Energy, has signed a contract with the city of Burbank, Calif., to manage and optimize the city's electrical power and natural gas assets. Based in Stamford, Sempra Energy Trading is one of the largest U.S. participants in marketing and trading physical and financial energy products, including natural gas, power and crude oil.

As part of a comprehensive risk management program, Sempra Energy Trading will work toward minimizing the city's risk by evaluating financial and credit risk before making long-term commitments for commodity purchases. This includes evaluating the financial stability of potential energy marketers with which the city of Burbank may conduct business. Over the next two years, Sempra Energy Trading will identify ways that Burbank's Public Service Department (PSD) can save money for its 55,000 residential and commercial customers by using its energy infrastructure more efficiently. The company will review the city's energy portfolio of power supply facilities, natural gas assets and energy contracts, and develop solutions to manage existing and underutilized energy assets more effectively.

"Sempra Energy Trading's depth of asset and risk management experience will enable the city and our residential and commercial customers, to reap the rewards of new energy marketplace efficiencies," said Fred Fletcher, assistant general manager for the city of Burbank. "It is our goal to benefit from the changes brought by deregulation in the California energy market. In Sempra Energy Trading, we found a partner that was willing to take a nontraditional approach to the market and utilize our assets to the fullest advantage."

This agreement marks the first time in the city's history that it has partnered with an energy services company. The energy market is like any commodity market. That means that Sempra Energy Trading will strive to generate additional revenue for Burbank by determining the best market strategy. This includes the timing and pricing for purchases and sales of natural gas and electricity.

"Burbank is ahead of the curve and this partnership is a good example of how municipal utilities can protect and enhance the value of their natural gas and electricity assets in a volatile market," said David Messer, president of Sempra Energy Trading. "We look forward to building a long-term partnership with Burbank and helping the city manage its operations more effectively in a competitive environment."

Edited by Stephen Heiser