2009 Annual Meeting Notice of 2009 Annual Meeting of Shareholders and Proxy Statement April 30, 2009 Newport Beach, California NOTICE OF ANNUAL MEETING AND PROXY STATEMENT TABLE OF CONTENTS Page Notice of Annual Meeting of Shareholders ................................................. 1 Questions and Answers ................................................................. 2 Proxy Materials .................................................................... 2 Proposals To Be Voted On ........................................................... 3 How You Can Vote ................................................................. 4 Attending the Annual Meeting ........................................................ 5 Shareholder Proposals and Director Nominations .......................................... 6 Obtaining Additional Information ...................................................... 6 Corporate Governance ................................................................. 8 Board of Directors .................................................................. 8 Board Committees .................................................................. 10 Shareholder Communications with the Board ............................................. 11 Director Compensation .............................................................. 11 Audit Committee Report ................................................................ 13 Share Ownership ...................................................................... 14 Proposals To Be Voted On .............................................................. 15 Proposal 1: Election of Directors ....................................................... 15 Proposal 2: Ratification of Independent Registered Public Accounting Firm .................... 18 Proposal 3: Shareholder Proposal for an Advisory Vote on Executive Compensation .............. 19 Proposal 4: Shareholder Proposal for North Dakota Reincorporation .......................... 21 Executive Compensation ................................................................ 23 Compensation Discussion and Analysis ................................................. 23 Compensation Committee Report ...................................................... 32 Compensation Tables ................................................................ 33 SEMPRA ENERGY 101 Ash Street San Diego, California 92101-3017 (877) 736-7721 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS Time and Date 10:00 a.m., local time, on Thursday, April 30, 2009. Place The Fairmont Hotel, 4500 MacArthur Blvd., Newport Beach, California. Items of Business (1) Elect directors for a one-year term. The director nominees, all of whom are currently directors, are: James G. Brocksmith Jr., Richard A. Collato, Donald E. Felsinger, Wilford D. Godbold Jr., William D. Jones, Richard G. Newman, William G. Ouchi, Carlos Ruiz, William C. Rusnack, William P. Rutledge, Lynn Schenk and Neal E. Schmale. (2) Ratify independent registered public accounting firm. (3) Vote on two shareholder proposals, if properly presented at the meeting. (4) Consider other matters that may properly come before the meeting. Adjournments and The items of business to be considered at the Annual Meeting may be considered at the meeting or at Postponements any adjournment or postponement. Record Date You are entitled to vote only if you were a Sempra Energy shareholder at the close of business on March 2, 2009. Meeting Admission You are entitled to attend the Annual Meeting only if you were a Sempra Energy shareholder at the close of business on March 2, 2009 or you hold a valid proxy to vote at the meeting. You should be prepared to present photo identification to be admitted to the meeting. If you are a shareholder of record or hold shares through our Direct Registration Plan or Employee Savings Plans, an admission ticket is included as part of your notice of Internet availability of proxy materials or proxy card. If you plan to attend the meeting, please bring the admission ticket with you. If you do not bring the admission ticket, your name must be verified against our list of registered shareholders and plan participants. If your shares are not registered in your name but are held in “street name” through a broker, trustee or other nominee, you must provide proof of beneficial ownership at the record date such as your most recent account statement prior to March 2, 2009, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of share ownership. The meeting will begin promptly at 10:00 a.m., local time. Check-in will begin at 9:00 a.m. and you should allow ample time for check-in procedures. Voting Your vote is important. Whether or not you plan to attend the Annual Meeting, we encourage you to read this proxy statement and promptly vote your shares. You may vote by completing, signing and dating the enclosed proxy card or voting instruction card and returning it in the enclosed envelope or, in most cases, by telephone or the Internet. For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers - How You Can Vote” beginning on page 4 of this proxy statement and to the instructions on your proxy card or voting instruction card. This Notice of Annual Meeting and Proxy Statement, the accompanying form of proxy or voting instruction card and our annual report to shareholders are being provided to shareholders beginning March 17, 2009. These documents are also available on the Internet at www.amstock.com/ProxyServices/ViewMaterials.asp. Randall L. Clark Corporate Secretary 1 QUESTIONS AND ANSWERS Proxy Materials 5. Why didn’t I receive a notice in the mail about the Internet availability of the proxy materials? 1. Why am I receiving these materials? We are providing some of our shareholders, including Sempra Energy’s Board of Directors is making these those who have previously requested paper copies, with a materials available to you over the Internet or delivering paper copy of the proxy materials instead of a notice about paper copies to you by mail in connection with Sempra the Internet availability of the proxy materials. Energy’s Annual Meeting of Shareholders to be held on Thursday, April 30, 2009. As a shareholder, you are invited In addition, we are providing notice of the availability of to attend the Annual Meeting and are entitled and requested the proxy materials by e-mail to our shareholders who have to vote on the items of business described in this proxy previously elected electronic delivery. Those shareholders statement. This proxy statement includes information that should have received an e-mail containing a link to the we are required to provide you under rules of the Securities website where the materials are available and a link to the and Exchange Commission and designed to assist you in proxy voting website. voting your shares. 6. How can I access the proxy materials over the 2. What is included in the proxy materials? Internet? The proxy materials include: Your notice about the Internet availability of the proxy materials, proxy card or voting instruction card will contain • Our proxy statement for the Annual Meeting of instructions on how to view our proxy materials on the Shareholders; and Internet. • Our 2008 Annual Report to Shareholders. 7. How may I obtain a paper copy of the proxy If you received a paper copy of these materials by mail, the materials? proxy materials also include a proxy card or voting instruction card for the Annual Meeting. Shareholders receiving a notice about the Internet availability of the proxy materials will find instructions 3. What information is contained in this proxy about how to obtain a paper copy of the proxy materials. statement? Shareholders receiving notice of the availability of the proxy materials by e-mail will find instructions about how The information in this proxy statement relates to the to obtain a paper copy of the proxy materials as part of that proposals to be voted on at the Annual Meeting, the voting e-mail. All shareholders who do not receive a notice or an process, our Board of Directors and board committees, the e-mail will receive a paper copy of the proxy materials by compensation of our directors and certain executive mail. officers and other required information. To request that you receive paper copies of future proxy 4. Why did I receive a notice in the mail regarding the materials, please access www.voteproxy.com on the Internet availability of the proxy materials instead of Internet. Click on Request Paper Copies of Materials, then a paper copy of the materials? click on Sempra Energy. You will see an option to elect to receive paper copies each year. You may also request to The Securities and Exchange Commission has adopted a receive paper copies of future proxy materials by calling rule that allows companies to furnish their proxy materials (888) 776-9962 from the United States and Canada or over the Internet. As a result, we are mailing to many of (718) 921-8562 from other countries, or by e-mailing our shareholders a notice about the Internet availability of [email protected]. the proxy materials instead of a paper copy of the materials. All shareholders receiving the notice will have the ability to access the proxy materials over the Internet and to request a paper copy of the proxy materials by mail or an electronic copy by e-mail. Instructions on how to do so are contained in the notice. In addition, the notice contains