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What changed in Sempra's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Sempra's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+902 added−829 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-25)

Top changes in Sempra's 2025 10-K

902 paragraphs added · 829 removed · 630 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

183 edited+55 added−30 removed72 unchanged
Biggest changeBille will assume the role as Chief Financial Officer effective March 1, 2025. 2024 Form 10-K | 35 Table of Contents INFORMATION ABOUT EXECUTIVE OFFICERS Name Age (1) Positions held over last five years Time in position SoCalGas: Maryam S. Brown 49 Chief Executive Officer January 2025 to present President March 2019 to present Mia L.
Biggest changeBorthwick 61 Senior Vice President and General Counsel, SDG&E and SoCalGas January 2026 to present Chief Risk Officer, Sempra May 2023 to January 2026 Deputy General Counsel, Sempra March 2019 to May 2023 Maritza Mekitarian 51 Vice President, Controller and Chief Accounting Officer January 2026 to present Assistant Treasurer March 2024 to present Assistant Controller January 2024 to January 2026 Director of Financial Planning September 2021 to January 2024 Financial and Strategic Planning Manager April 2021 to September 2021 Financial Planning Manager September 2017 to April 2021 (1) Ages are as of February 26, 2026. 2025 Form 10-K | 37 Tab le of Cont ents INFORMATION ABOUT EXECUTIVE OFFICERS Name Age (1) Positions held over last five years Time in position SoCalGas: Maryam S.
Other external factors such as weather, the price of, demand for, and supply sources of electricity, the use of and further development of renewable energy sources and energy storage, development of or requirements for new natural gas supply sources, demand for natural gas outside California, storage levels, transport capacity and availability of supply into California and general economic conditions can also result in significant shifts in the market price of natural gas, which may in turn impact demand.
Other external factors such as weather, the price of, demand for, and supply sources of electricity, the use and further development of renewable energy sources and energy storage, development of or requirements for new natural gas supply sources, demand for natural gas outside California, storage levels, transport capacity and availability of supply into California and general economic conditions can also result in significant shifts in the market price of natural gas, which may in turn impact demand.
Oncor and Sharyland Utilities, along with other owners of electric transmission and distribution facilities in Texas, assist the ERCOT ISO in its operations. Each of these Texas utilities has planning, design, construction, operation, maintenance and security responsibility for the portion of the transmission grid and the load-serving substations it owns, primarily within its certificated distribution service area.
Oncor and Sharyland Utilities, along with other owners of electric transmission and distribution facilities in Texas, assist the ERCOT ISO in its operations. Each of these Texas utilities has planning, design, construction, operation, maintenance and security responsibility for the portion of the transmission grid and the load-serving substations it owns, primarily within its certificated service area.
The CCM, if triggered, would automatically update the authorized cost of debt based on actual costs and update the authorized ROE upward or downward by 20% of the difference between the CCM benchmark rate and the applicable Moody’s utility bond index during the measurement period, subject to regulatory approval.
Subject to regulatory approval, the CCM, if triggered, would automatically update the authorized cost of debt based on actual costs and update the authorized ROE upward or downward by 20% of the difference between the CCM benchmark rate and the applicable Moody’s utility bond index during the measurement period.
North America benefits from numerous competitive advantages as a potential supplier of LNG to world markets, including the following: ▪ high levels of developed and undeveloped natural gas resources, including unconventional natural gas and oil relative to domestic consumption levels ▪ flexible and mature oil and gas markets resulting in efficient unit costs of gas production ▪ availability of extensive natural gas pipeline transmission systems and natural gas storage capacity with proximity to production locations Global LNG demand and competition may limit North American LNG exports, as international liquefaction projects attempt to match North American LNG production costs and customer contractual rights such as volume and destination flexibility.
North America benefits from numerous competitive advantages as a supplier of LNG to world markets, including the following: ▪ high levels of developed and undeveloped natural gas resources, including unconventional natural gas and oil relative to domestic consumption levels ▪ flexible and mature oil and gas markets resulting in efficient unit costs of gas production ▪ availability of extensive natural gas pipeline transmission systems and natural gas storage capacity with proximity to production locations Global LNG demand and competition may limit North American LNG exports, as international liquefaction projects attempt to match North American LNG production costs and customer contractual rights such as volume and destination flexibility.
North American LNG exports add market flexibility that is expected to facilitate additional growth of a global commodity market for natural gas and LNG. Our LNG projects in development, under construction and in operation all compete globally to market and sell LNG to remarketers and end-users, including gas and electric utilities located in LNG-importing countries around the world.
North American LNG exports add market flexibility that is expected to facilitate additional growth of a global commodity market for natural gas and LNG. Our LNG projects in development, under construction or in operation all compete globally to market and sell LNG to remarketers and end-users, including gas and electric utilities located in LNG-importing countries around the world.
These franchise agreements, which went into effect in July 2021, provide SDG&E the opportunity to serve the City of San Diego for the next 20 years, consisting of 10-year agreements that will automatically renew for an additional 10 years unless the City Council voids the automatic renewal.
These franchise agreements, which went into effect in July 2021, provide SDG&E the opportunity to serve the City of San Diego for 20 years, consisting of 10-year agreements that will automatically renew for an additional 10 years unless the City Council voids the automatic renewal.
This regulatory treatment does not provide assurance as to achievement of earnings levels or recovery of actual costs. Instead, their rates are based on an analysis of each utility’s costs and capital structure in a designated test year, as reviewed and approved in regulatory proceedings.
This regulatory treatment does not provide assurance as to achievement of earnings levels or recovery of actual costs. Instead, rates are based on an analysis of each utility’s costs and capital structure in a designated test year, as reviewed and approved in regulatory proceedings.
Rather, Oncor provides wholesale transmission services to its electricity distribution business as well as non-affiliated electricity distribution companies, electric cooperatives and municipally owned utilities. Oncor also provides distribution services, consisting of retail delivery services to retail electric providers that sell electricity to end-use customers, as well as wholesale delivery services to electric cooperatives and municipally owned utilities.
Oncor provides wholesale transmission services to its electricity distribution business as well as non-affiliated electricity distribution companies, electric cooperatives and municipally owned utilities. Oncor also provides distribution services, consisting of retail delivery services to retail electric providers that sell electricity to end-use customers, as well as wholesale delivery services to electric cooperatives and municipally owned utilities.
Generally, the Texas PURA prohibits the collection of any rates or charges by a public utility (as defined by PURA) that do not have the prior approval of the appropriate regulatory authority (i.e., the PUCT or the municipality with original jurisdiction).
Generally, PURA prohibits the collection of any rates or charges by a public utility (as defined by PURA) that do not have the prior approval of the appropriate regulatory authority (i.e., the PUCT or the municipality with original jurisdiction).
The PUCT has original jurisdiction over wholesale transmission rates and services and retail rates and services in unincorporated areas and in those municipalities that have ceded original jurisdiction to the PUCT, and has exclusive appellate jurisdiction to review the retail rates, retail services, and ordinances of municipalities.
The PUCT has original jurisdiction over wholesale transmission rates and services and retail rates and services in unincorporated areas and in municipalities that have ceded original jurisdiction to the PUCT, and has exclusive appellate jurisdiction to review the retail rates, retail services, and ordinances of municipalities.
Risk Factors.” With respect to our net-zero aims, even in a state of “net-zero,” GHG emissions may still be generated, but with innovation and continued development of new technology and solutions, it could allow an equal amount of carbon dioxide or its equivalent to be removed from the atmosphere, resulting in a zero increase in overall net emissions.
Risk Factors.” With respect to our net-zero aims, even in a state of “net-zero,” GHG emissions may still be generated, but innovation and continued development of new technology and solutions could allow an equal amount of carbon dioxide or its equivalent to be removed from the atmosphere, resulting in a zero net increase in emissions.
The CPUC: ▪ consists of five commissioners appointed by the Governor of California for staggered, six-year terms; ▪ regulates, among other things, SDG&E’s and SoCalGas’ customer rates and conditions of service, sales of securities, rates of return, capital structure, rates of depreciation, and long-term resource procurement, except as described below in “U.S.
The CPUC: ▪ consists of five commissioners appointed by the Governor of California for staggered, six-year terms; ▪ regulates, among other things, SDG&E’s and SoCalGas’ customer rates and conditions of service, sales of securities, rates of return, capital structure, rates of depreciation, long-term resource procurement and other financial matters, except as described below in “U.S.
The service and distribution fees charged by Ecogas are regulated by the CRE, which performs a review of rates every five years and monitors prices charged to end-users. Ecogas’ rate case for 2021 through 2025 was approved by the CRE in December 2023. The tariffs operate under a return-on-asset-base model.
The service and distribution fees charged by Ecogas are regulated by the CNE, which performs a review of rates every five years and monitors prices charged to end-users. Ecogas’ rate case for 2021 through 2025 was approved by the CNE in December 2023. The tariffs operate under a return-on-asset-base model.
Sempra does not control Oncor Holdings or Oncor, and the ring-fencing measures, governance mechanisms and commitments limit our ability to direct the management, policies and operations of Oncor Holdings and Oncor, including the deployment or disposition of their assets, declarations of dividends or other distributions, strategic planning and other important corporate issues and actions, including limited representation on the Oncor Holdings and Oncor boards of directors.
Sempra does not control Oncor Holdings or Oncor, and the ring-fencing measures, governance mechanisms and commitments limit our ability to direct the management, policies and operations of Oncor Holdings and Oncor, including the deployment or disposition of their assets, declarations of dividends or other distributions, strategic planning and other important corporate matters and actions, including limited representation on the Oncor Holdings and Oncor boards of directors.
Under the LP Agreement, matters are decided generally by majority vote and the managers designated by the partners of SI Partners each vote on an equity-weighted basis based on the ownership percentage of their respective designating limited partner. SI Partners and its controlled subsidiaries are prohibited from taking certain limited actions without the prior written approval of the minority partners.
Under this agreement, matters are generally decided by majority vote and the managers designated by the partners of SI Partners each vote on an equity-weighted basis based on the ownership percentage of their respective designating limited partner. SI Partners and its controlled subsidiaries are prohibited from taking certain limited actions without the prior written approval of the minority partners.
SDG&E’s assets at December 31, 2024 covered the following territory: We describe SDG&E’s electric utility operations below. We describe SDG&E’s natural gas utility operations below in “Sempra California’s Natural Gas Utility Operations.” For a discussion of the risks and uncertainties facing SDG&E’s business, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7.
SDG&E’s assets at December 31, 2025 covered the following territory: We describe SDG&E’s electric utility operations below. We describe SDG&E’s natural gas utility operations below in “Sempra California’s Natural Gas Utility Operations.” For a discussion of the risks and uncertainties facing SDG&E’s business, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7.
Foreign Regulation Operations and projects in our Sempra Infrastructure segment are subject to regulation by the CRE, ASEA, SENER, the Mexican Ministry of Environment and Natural Resources of Mexico (Secretaría del Medio Ambiente y Recursos Naturales), and other labor and environmental agencies of city, state and federal governments in Mexico.
Foreign Regulation Operations and projects in our Sempra Infrastructure segment are subject to regulation by the ASEA, CNE, SENER, the Mexican Ministry of Environment and Natural Resources of Mexico (Secretaría del Medio Ambiente y Recursos Naturales), and other labor and environmental agencies of city, state and federal governments in Mexico.
The LP Agreement contains certain default remedies if any limited partner fails to fund any amounts required to be funded under the LP Agreement and requires that SI Partners distribute to the limited partners at least 85% of distributable cash of SI Partners and its subsidiaries on a quarterly basis, subject to certain exceptions and reserves.
The limited partnership agreement contains certain default remedies if any limited partner fails to fund any amounts required to be funded under the agreement and requires that SI Partners distribute to the limited partners at least 85% of distributable cash of SI Partners and its subsidiaries on a quarterly basis, subject to certain exceptions and reserves.
SoCalGas’ assets at December 31, 2024 covered the following territory: We describe SoCalGas’ natural gas utility operations below in “Sempra California’s Natural Gas Utility Operations.” For a discussion of the risks and uncertainties facing SoCalGas’ business, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7.
SoCalGas’ assets at December 31, 2025 covered the following territory: We describe SoCalGas’ natural gas utility operations below in “Sempra California’s Natural Gas Utility Operations.” For a discussion of the risks and uncertainties facing SoCalGas’ business, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7.
SoCalGas’ gas transmission pipeline system also has an interconnect with a Mexican gas pipeline company at Otay Mesa on the California/Mexico border that allows gas to not only flow south from the gas producing basins in the southwestern U.S., but to also flow north into SoCalGas’ gas transmission pipeline system from supplies in Mexico.
SoCalGas’ gas transmission pipeline system also has an interconnection with a Mexican gas pipeline company at Otay Mesa on the California/Mexico border that allows gas to not only flow south from the gas producing basins in the southwestern U.S., but to also flow north into SoCalGas’ gas transmission pipeline system from supplies in Mexico.
SoCalGas owns four natural gas storage facilities with a combined working gas capacity of 137 Bcf and 126 injection, withdrawal and observation wells that provide natural gas storage service. SoCalGas’ and SDG&E’s core customers, along with certain third-party market participants, are allocated a portion of SoCalGas’ storage capacity.
SoCalGas owns four natural gas storage facilities with a combined working gas capacity of 137 Bcf and 122 injection, withdrawal and observation wells that provide natural gas storage service. SoCalGas’ and SDG&E’s core customers, along with certain third-party market participants, are allocated a portion of SoCalGas’ storage capacity.
Alternatively, each of SDG&E and SoCalGas is permitted to file a cost of capital application to have its cost of capital determined in lieu of the CCM in an interim year in which an extraordinary or catastrophic event materially impacts its cost of capital and affects utilities differently than the market as a whole.
Alternatively, each of SDG&E and SoCalGas is permitted to file a cost of capital application to have its cost of capital determined in lieu of the CCM in an interim year in which an extraordinary or catastrophic event materially impacts its cost of capital and affects utilities differently than the market.
Most customers receive electric procurement service from a load-serving entity other than SDG&E through programs such as CCA and DA. In such cases, SDG&E no longer procures energy for this departed load. Accordingly, SDG&E’s CCA and DA customers receive primarily transportation and distribution services from SDG&E.
Most customers receive electric commodity service from a load-serving entity other than SDG&E through programs such as CCA and DA. In such cases, SDG&E no longer procures energy for this departed load. Accordingly, SDG&E’s CCA and DA customers receive primarily transportation and distribution services from SDG&E.
ENVIRONMENTAL MATTERS We discuss environmental issues affecting us in Note 15 of the Notes to Consolidated Financial Statements and “Part I – Item 1A. Risk Factors.” You should read the following additional information in conjunction with those discussions.
ENVIRONMENTAL MATTERS We discuss environmental issues affecting us in Note 16 of the Notes to Consolidated Financial Statements and “Part I – Item 1A. Risk Factors.” You should read the following additional information in conjunction with those discussions.
Sharyland Utilities Sharyland Utilities is a regulated electric transmission utility that owns and operates, at December 31, 2024, approximately 64 miles of electric transmission lines in south Texas, including a direct current line connecting Mexico and assets in McAllen, Texas.
Sharyland Utilities Sharyland Utilities is a regulated electric transmission utility that owns and operates, at December 31, 2025, approximately 64 miles of electric transmission lines in south Texas, including a direct current line connecting Mexico and assets in McAllen, Texas.
The demand for natural gas may also fluctuate due to volatility in the demand for electricity due to seasonality, weather conditions and other impacts, and the availability of competing supplies of electricity, such as renewable energy sources.
The demand for natural gas may also fluctuate due to volatility in the demand for electricity due to seasonality, weather conditions and other impacts, and the availability of competing supplies of electricity, such as renewable energy sources, among other factors.
While core customers are permitted to purchase their natural gas supplies from producers, marketers or brokers, SoCalGas and SDG&E are obligated to maintain adequate delivery capacity to serve the requirements of all their core customers. SoCalGas’ noncore customers consist primarily of electric generation, wholesale, and large commercial and industrial customers.
While core customers are permitted to purchase their natural gas supplies from producers, marketers or brokers, SoCalGas and SDG&E are obligated to maintain adequate delivery capacity to serve the requirements of all core customers in their service territories. SoCalGas’ noncore customers consist primarily of electric generation, wholesale, and large commercial and industrial customers.
ECA LNG Phase 1 has definitive 20-year SPAs with an affiliate of TotalEnergies SE for approximately 1.7 Mtpa of LNG and Mitsui & Co., Ltd. for approximately 0.8 Mtpa of LNG. PA LNG Phase 1 Project.
The ECA LNG Phase 1 project has definitive 20-year SPAs with an affiliate of TotalEnergies SE for approximately 1.7 Mtpa of LNG and with Mitsui & Co., Ltd. for approximately 0.8 Mtpa of LNG.
Sempra Texas Utilities’ assets at December 31, 2024 covered the following territory: For a discussion of risks and uncertainties related to our equity method investments in Oncor Holdings and Sharyland Holdings, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7.
Sempra Texas Utilities’ assets at December 31, 2025 covered the following territory: For a discussion of the risks and uncertainties related to our equity investments in Oncor Holdings and Sharyland Holdings, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7.
Sempra Infrastructure’s Guadalajara LPG terminal is an 80,000-barrel LPG storage facility near Guadalajara, Mexico, with associated loading and dispatch facilities, and serves the LPG needs of Guadalajara. The Guadalajara LPG terminal is fully contracted to PEMEX on a firm basis through 2028. Both contracts are U.S. dollar-denominated or referenced and are periodically adjusted for inflation.
SI Partners’ Guadalajara LPG terminal is an 80,000-barrel LPG storage facility near Guadalajara, Mexico, with associated loading and dispatch facilities, and serves the LPG needs of Guadalajara. The Guadalajara LPG terminal is fully contracted to PEMEX on a firm basis through 2028. Both contracts are U.S. dollar-denominated or referenced and are periodically adjusted for inflation.
Sempra Infrastructure is constructing Louisiana Storage, a 12.5-Bcf salt dome natural gas storage facility to support the PA LNG Phase 1 project. The construction includes an 11-mile pipeline that will connect to the Port Arthur Pipeline Louisiana Connector. We expect Louisiana Storage to be ready for service in time to support the needs of the PA LNG Phase 1 project.
SI Partners is constructing Louisiana Storage, a 12.5-Bcf salt dome natural gas storage facility to support the PA LNG Phase 1 project. The construction includes an 11-mile pipeline that will connect to the Port Arthur Pipeline Louisiana Connector. We expect Louisiana Storage to be ready for service in time to support the needs of the PA LNG Phase 1 project.
We expect the Port Arthur Pipeline Louisiana Connector to be ready for service ahead of the PA LNG Phase 1 project’s gas requirements. Natural Gas Distribution. Sempra Infrastructure owns the natural gas distribution regulated utility, Ecogas, which operates in three separate distribution zones in Mexicali, Chihuahua and La Laguna-Durango, Mexico.
We expect the Port Arthur Pipeline Louisiana Connector to be ready for service ahead of the PA LNG Phase 1 project’s gas requirements. Natural Gas Distribution. SI Partners owns the natural gas distribution regulated utility, Ecogas, which operates in three separate distribution zones in Mexicali, Chihuahua and La Laguna-Durango, Mexico.
CCA is only available if a customer’s local jurisdiction (city or county) offers such a program, and DA is currently limited by a cap based on gigawatt hours. Several jurisdictions in SDG&E’s territory have implemented CCA, including the City of San Diego in 2022. Additional jurisdictions may be considering CCA.
CCA is only available if a customer’s local jurisdiction (city or county) offers such a program, and DA is currently limited by a cap based on gigawatt hours. Several jurisdictions in SDG&E’s territory have implemented CCA, including the City of San Diego in 2022.
Sempra Infrastructure obtains numerous permits, authorizations and licenses for its electric and natural gas distribution, generation and transmission systems from the local governments where these services are provided. The permits for generation, transportation, storage and distribution operations at Sempra Infrastructure are generally for 30-year terms, with options for renewal under certain regulatory conditions.
SI Partners obtains numerous permits, authorizations and licenses for its electric and natural gas distribution, generation and transmission systems from the local governments where these services are provided. The permits for generation, transportation, storage and distribution operations at SI Partners are generally for 30-year terms, with options for renewal under certain regulatory conditions.
RATEMAKING MECHANISMS Sempra California General Rate Case Proceedings A CPUC GRC proceeding is designed to set sufficient base rates to allow SDG&E and SoCalGas to recover their reasonable forecasted operating costs and to provide the opportunity to realize their authorized rates of return on their investments.
RATEMAKING MECHANISMS Sempra California General Rate Case Proceedings A CPUC GRC proceeding is designed to set authorized base revenue requirements that are sufficient to allow SDG&E and SoCalGas to recover their reasonable forecasted operating costs and to provide the opportunity to realize their authorized rates of return on their investments.
These responsibilities consist of the ownership, management, construction, maintenance and operation of the electricity distribution system within its certificated service area. Oncor’s distribution system receives electricity from the transmission system through substations and distributes electricity to end-users and wholesale customers through 3,757 distribution feeders at December 31, 2024.
These responsibilities consist of the ownership, management, construction, maintenance and operation of the electricity distribution system within its certificated service area. Oncor’s distribution system receives electricity from the transmission system through substations and distributes electricity to end-users and wholesale customers through 3,874 distribution feeders at December 31, 2025.
The majority of transportation capacity on the Cameron Interstate Pipeline is under long-term transportation service agreements with shippers for delivery to the Cameron LNG Phase 1 facility. Sempra Infrastructure is constructing the Port Arthur Pipeline Louisiana Connector, a 72-mile pipeline connecting the PA LNG Phase 1 project to Gillis, Louisiana.
The majority of transportation capacity on the Cameron Interstate Pipeline is under long-term transportation service agreements with shippers for delivery to the Cameron LNG Phase 1 facility. SI Partners is constructing the Port Arthur Pipeline Louisiana Connector, a 72-mile pipeline connecting the PA LNG Phase 1 project to Gillis, Louisiana.
The TDF pipeline system runs from PEMEX’s Burgos facility in the Mexican state of Tamaulipas, Mexico to Sempra Infrastructure’s approximately 32,000-barrel LPG storage facility near the city of Monterrey, Mexico and is fully contracted to PEMEX on a firm basis through 2027.
The TDF pipeline system runs from PEMEX’s Burgos facility in the Mexican state of Tamaulipas, Mexico to SI Partners’ approximately 32,000-barrel LPG storage facility near the city of Monterrey, Mexico and is fully contracted to PEMEX on a firm basis through 2027.
Under the LP Agreement, if the minority partners approve Sempra’s request that a project not be pursued jointly, or if the minority partners decide not to participate in any proposed project for which Sempra nevertheless desires to make a positive final investment decision, then Sempra may proceed with such project either independently through a different investment vehicle or as a “Sole Risk Project” within SI Partners and receive Sole Risk Interests in respect thereof.
If the minority partners approve Sempra’s request that a project not be pursued jointly, or if the minority partners decide not to participate in any proposed project for which Sempra nevertheless desires to make a positive FID, then Sempra may proceed with such project either independently through a different investment vehicle or as a “Sole Risk Project” within SI Partners and receive Sole Risk Interests in respect thereof.
We did not experience any major work stoppages in 2024, and we maintain constructive relations with our labor unions.
We did not experience any major work stoppages in 2025, and we maintain constructive relations with our labor unions.
However, all investments included in a capital tracker are ultimately subject to prudence review by the PUCT in the next base rate review, after such assets are put into service.
All investments included in a capital tracker update filing are ultimately subject to prudence review by the PUCT in the next base rate review after such assets are put into service.
If LNG volumes received from Tangguh PSC are not sufficient to satisfy the commitment to the CFE, Sempra Infrastructure may purchase natural gas in the market to satisfy such commitment. Sempra Infrastructure purchases, transports and sells natural gas and LNG, and has customers in both the U.S. and Mexico, including the CFE.
If LNG volumes received from Tangguh PSC are not sufficient to satisfy the commitment to the CFE, SI Partners may purchase natural gas in the market to satisfy such commitment. SI Partners purchases, transports and sells natural gas and LNG, and has customers in both the U.S. and Mexico, including the CFE.
SoCalGas purchases natural gas from various sources, including from Canada, the U.S. Rockies and the southwestern regions of the U.S. Purchases of natural gas are primarily priced based on published monthly bid week indices, which can be subject to volatility. The cost of purchases of natural gas for SDG&E’s and SoCalGas’ core customers is billed to those customers without markup.
SoCalGas purchases natural gas from various producing regions, including from Canada, the U.S. Rockies and the southwestern regions of the U.S. Purchases of natural gas are primarily priced based on published indices, which can be subject to volatility. The cost of purchases of natural gas for SDG&E’s and SoCalGas’ core customers is billed to those customers without markup.
The CPUC also oversees and regulates other energy-related products and services, including solar and wind energy, bioenergy, alternative energy storage and other forms of renewable energy. In addition, the CPUC’s safety and enforcement role includes inspections, investigations and penalty and citation processes for safety and other violations. The CEC publishes electric demand forecasts for the state and specific service territories.
The CPUC also oversees and regulates other energy-related products and services, including solar and wind energy, bioenergy, alternative energy storage and other forms of renewable energy. In addition, the CPUC’s safety and enforcement authority includes inspections, investigations and citation and enforcement programs for safety and other violations. The CEC publishes electric demand forecasts for the state and specific service territories.
Sempra Infrastructure owns a 40-mile natural gas pipeline in south Louisiana, the Cameron Interstate Pipeline, which links the Cameron LNG Phase 1 facility in Cameron Parish in Louisiana to seven pipelines that offer access to major feed gas supply basins in Texas and the northeast, midcontinent and southeast regions of the U.S.
SI Partners owns the Cameron Interstate Pipeline, a 40-mile natural gas pipeline in south Louisiana that links the Cameron LNG Phase 1 facility in Cameron Parish in Louisiana to seven pipelines that offer access to major feed gas supply basins in Texas and the northeast, midcontinent and southeast regions of the U.S.
Authorized costs are recovered as the commodity or service is delivered. To the extent authorized amounts collected vary from actual costs, the differences are generally recovered or refunded in a subsequent period based on the nature of the balancing account mechanism. In general, the revenue recognition criteria for balanced costs billed to customers are met when the costs are incurred.
To the extent authorized amounts collected vary from actual costs, the differences are generally recovered or refunded in a subsequent period based on the nature of the balancing account mechanism. In general, the revenue recognition criteria for balanced costs billed to customers are met when the costs are incurred.
Load serving entities sell electric service to their end-users and wholesale customers upon receipt of power delivery from these energy generation facilities, while industrial and other customers consume the electricity to run their facilities. At December 31, 2024, Sempra Infrastructure had total nameplate capacity of 1,044 MW related to its operating wind and solar power generation facilities.
Load serving entities sell electric service to their end-users and wholesale customers upon receipt of power delivery from these energy generation facilities, while industrial and other customers consume the electricity to run their facilities. At December 31, 2025, SI Partners had total nameplate capacity of 1,044 MW related to its operating wind and solar power generation facilities.
The proceeding establishes a ROE and a formulaic rate whereby rates are determined using (i) a base period of historical costs and a forecast of capital investments, and (ii) a true-up period, similar to balancing account treatment, that is designed to provide earnings equal to SDG&E’s actual cost of service including its authorized return on investment.
The proceeding establishes, among other things, a ROE, capital structure and a formulaic rate whereby rates are determined using (i) a base period of historical costs and a forecast of capital investments, and (ii) a true-up period, similar to balancing account treatment, that is designed to provide earnings equal to SDG&E’s actual cost of service including its authorized return.
Martin 63 President March 2020 to present Chairman December 2018 to present Chief Executive Officer May 2018 to present Karen L.
Martin 64 President March 2020 to present Chairman December 2018 to present Chief Executive Officer May 2018 to present Karen L.
SI Partners, KKR Denali and an affiliate of ConocoPhillips own a 28%, 42% and 30% interest, respectively, in the PA LNG Phase 1 project under construction on a greenfield site in the vicinity of Port Arthur, Texas, located along the Sabine-Neches waterway. Sempra Infrastructure holds a 19.6% interest in the project.
SI Partners, KKR Denali and an affiliate of ConocoPhillips own a 28%, 42% and 30% interest, respectively, in the PA LNG Phase 1 project under construction on a greenfield site in the vicinity of Port Arthur, Texas, located along the Sabine-Neches waterway.
Certain FERC transmission development projects are open to competition, allowing independent developers to compete with incumbent utilities for the construction and operation of transmission facilities. 2024 Form 10-K | 15 Table of Contents SoCalGas SoCalGas is a regulated public utility that owns and operates a natural gas distribution, transmission and storage system that delivers natural gas to a population of, at December 31, 2024, approximately 21.1 million, covering an approximate 24,000 square mile service territory that encompasses Southern California and portions of central California (excluding San Diego County, the City of Long Beach and the desert area of San Bernardino County).
Certain FERC transmission development projects are open to competition, allowing independent developers to compete with incumbent utilities for the construction and operation of transmission facilities. 2025 Form 10-K | 15 Tab le of Cont ents SoCalGas SoCalGas is a regulated public utility that owns and operates a natural gas distribution, transmission and storage system that delivers natural gas to a population of, at December 31, 2025, approximately 21.3 million, covering an approximate 24,000 square mile service territory that encompasses Southern California and portions of central California (excluding San Diego County, the City of Long Beach and the desert area of San Bernardino County).
Other Cost-Based Regulatory Recovery The CPUC, and the FERC as it relates to SDG&E, authorize SDG&E and SoCalGas to collect, or in the case of CPUC programmatic activities, to apply for additional, revenue requirements beyond base rates from customers for certain operating and capital related costs (depreciation, taxes and return on rate base), including for: ▪ costs to purchase natural gas and electricity; ▪ costs associated with administering public purpose, demand response, environmental compliance, and customer energy efficiency programs; ▪ other programmatic activities, such as gas distribution, gas transmission, gas storage integrity management and wildfire mitigation; and ▪ costs associated with third party liability insurance premiums.
Other Cost-Based Regulatory Recovery The CPUC, and the FERC as applicable to SDG&E, authorize SDG&E and SoCalGas to collect, or in the case of CPUC programmatic activities, to apply for, additional revenue requirements beyond base rates from customers for certain operating and capital-related costs (depreciation, taxes and return on rate base), including for: ▪ costs to purchase natural gas and electricity ▪ costs associated with administering public purpose, demand response, environmental compliance, and customer energy efficiency programs ▪ programmatic activities, such as gas distribution, gas transmission, gas storage integrity management and wildfire mitigation ▪ costs associated with third-party liability insurance premiums Authorized costs are recovered as the commodity or service is delivered.
Most of Oncor’s power lines have been constructed over lands of others pursuant to easements or along public highways, streets and rights-of-way pursuant to permits, public utility easements, franchise or other agreements or as otherwise permitted by law. At December 31, 2024, Oncor had 5,094 employees, including 836 employees covered under a collective bargaining agreement and excluding interns.
Most of Oncor’s power lines have been constructed over lands of others pursuant to easements or along public highways, streets and rights-of-way pursuant to permits, public utility easements, franchise or other agreements or as otherwise permitted by law. At December 31, 2025, Oncor had approximately 5,600 employees, including 860 employees covered under a collective bargaining agreement and excluding interns.
DESCRIPTION OF BUSINESS BY SEGMENT Sempra’s business activities are organized under the following reportable segments: ▪ Sempra California ▪ Sempra Texas Utilities ▪ Sempra Infrastructure SDG&E and SoCalGas each has one reportable segment. 2024 Form 10-K | 12 Table of Contents Sempra California SDG&E SDG&E is a regulated public utility that provides electric services to a population of, at December 31, 2024, approximately 3.6 million and natural gas services to approximately 3.3 million of that population, covering an approximate 4,100 square mile service territory in Southern California that encompasses San Diego County and an adjacent portion of Orange County.
DESCRIPTION OF BUSINESS BY SEGMENT Sempra’s business activities are organized under the following reportable segments: ▪ Sempra California ▪ Sempra Texas Utilities ▪ Sempra Infrastructure SDG&E and SoCalGas each have one reportable segment. 2025 Form 10-K | 12 Tab le of Cont ents Sempra California SDG&E SDG&E is a regulated public utility that provides electric services to a population of, at December 31, 2025, approximately 3.6 million and natural gas services to approximately 3.3 million of that population, covering an approximate 4,100 square mile service territory in Southern California that encompasses San Diego County and an adjacent portion of Orange County.
Natural gas demand largely depends on the health and expansion of the Southern California economy, prices of alternative energy products, consumer preference, environmental regulations, legislation, California’s energy policy supporting increased electrification and renewable power generation, and the effectiveness of energy efficiency programs.
Natural gas demand largely depends on the health and expansion of the Southern California economy, prices of alternative energy products, consumer preferences, environmental regulations, legislation, California’s energy policy supporting increased electrification and renewable power generation, and the effectiveness of energy efficiency programs, among other factors.
Sempra Infrastructure’s refined products storage business develops, constructs and operates systems for the receipt, storage and delivery of refined products, principally gasoline, diesel and jet fuel, throughout the Mexican states of Baja California, Colima, Estado de Mexico, Puebla, Sinaloa and Veracruz for private companies, with a combined storage capacity of 4.6 million barrels fully operating as of December 31, 2024.
SI Partners’ refined products storage business develops, constructs, owns and operates systems for the receipt, storage and delivery of refined products, principally gasoline, diesel and jet fuel, throughout the Mexican states of Baja California, Colima, Estado de Mexico, Puebla, Sinaloa and Veracruz for private companies, with a combined storage capacity of 4.6 million barrels fully operating as of December 31, 2025.
The framework is intended to more equitably allocate SDG&E’s procurement cost obligations among customers served by SDG&E and customers now served by CCA and DA. San Diego’s mild climate and SDG&E’s robust energy efficiency programs contribute to lower consumption by our customers. Rooftop solar installations continue to reduce residential and commercial volumes sold by SDG&E.
The framework is intended to more equitably allocate SDG&E’s historical energy procurement cost obligations among customers served by SDG&E and customers now served by CCA and DA. San Diego’s mild climate contributes to lower consumption by our customers. Rooftop solar installations continue to reduce residential and commercial volumes sold by SDG&E.
These franchise agreements have been challenged in two lawsuits that we discuss in Note 15 of the Notes to Consolidated Financial Statements. SoCalGas has natural gas franchise agreements with the 12 counties and the 232 cities in its service territory. These franchise agreements allow SoCalGas to locate, operate and maintain facilities for the transmission and distribution of natural gas.
These franchise agreements have been challenged in a lawsuit that we discuss in Note 16 of the Notes to Consolidated Financial Statements. SoCalGas has natural gas franchise agreements with the 12 counties and the 232 cities in its service territory. These franchise agreements allow SoCalGas to locate, operate and maintain facilities for the transmission and distribution of natural gas.
Sempra Infrastructure uses the natural gas produced from this LNG to supply a contract for the sale of natural gas to the CFE at prices that are based on the SoCal Border index.
SI Partners uses the natural gas produced from this LNG to supply a contract for the sale of natural gas to the CFE at prices that are based on the SoCal Border index.
PHMSA also regulates the safety of onshore LNG facilities. SDG&E, SoCalGas and Sempra Infrastructure are also subject to regulation by the U.S. Commodity Futures Trading Commission.
PHMSA also regulates the safety of onshore LNG facilities. SDG&E, SoCalGas and SI Partners are also subject to regulation by the U.S. Commodity Futures Trading Commission.
These transmission line projects are necessary to meet reliability needs, support energy production and increase bulk power transfer capability. 2024 Form 10-K | 28 Table of Contents Oncor and Sharyland Utilities are subject to reliability standards adopted and enforced by the Texas Reliability Entity, Inc., an independent organization that develops reliability standards for the ERCOT region and monitors and enforces compliance with the standards of the North American Electric Reliability Corporation, including critical infrastructure protection, and ERCOT protocols.
These transmission line projects are necessary to meet reliability needs, support energy production and increase bulk power transfer capability. 2025 Form 10-K | 30 Tab le of Cont ents Oncor and Sharyland Utilities are subject to reliability standards adopted and enforced by the Texas Reliability Entity, Inc., an independent organization that develops reliability standards for the ERCOT region and monitors and enforces compliance with the standards of the North American Electric Reliability Corporation, including critical infrastructure protection, and ERCOT protocols.
Oncor’s transmission and distribution assets are located in over 120 counties and more than 400 incorporated municipalities, including the 2024 Form 10-K | 19 Table of Contents cities of Dallas and Fort Worth and surrounding suburbs, as well as Waco, Wichita Falls, Odessa, Midland, Tyler, Temple, Killeen and Round Rock, among others.
Oncor’s transmission and distribution assets are located in over 120 counties and more than 400 incorporated municipalities, including the cities of Dallas and Fort Worth and surrounding suburbs, as well as Waco, Wichita Falls, Odessa, Midland, Tyler, Temple, Killeen and Round Rock, among others.
There are also several in-state gas interconnections allowing for delivery of California-produced gas, including a number of direct connections from biomethane producers. 2024 Form 10-K | 16 Table of Contents SoCalGas purchases natural gas under short-term and long-term contracts and on the spot market for SDG&E’s and SoCalGas’ core customers.
There are also several in-state gas interconnections allowing for delivery of California-produced gas, including a number of direct connections from biomethane producers. 2025 Form 10-K | 16 Tab le of Cont ents SoCalGas purchases natural gas under short-term and long-term contracts and on the spot market for SDG&E’s and SoCalGas’ core customers.
As is prevalent in the industry, subject to regulatory limitations, SoCalGas typically injects natural gas into storage during the months of April through October and usually withdraws natural gas from storage during the months of November through March. 2024 Form 10-K | 18 Table of Contents Sempra Texas Utilities Sempra Texas Utilities is comprised of our equity method investments in Oncor Holdings and Sharyland Holdings.
As is prevalent in the industry, subject to regulatory limitations, SoCalGas typically injects natural gas into storage during the months of April through October and usually withdraws natural gas from storage during the months of November through March. 2025 Form 10-K | 18 Tab le of Cont ents Sempra Texas Utilities Sempra Texas Utilities is comprised of our equity method investments in Oncor Holdings and Sharyland Holdings.
An affiliate of TotalEnergies SE, an affiliate of Mitsui & Co., Ltd., and Japan LNG Investment, LLC (a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha) each own 16.6% of Cameron LNG JV. We account for our ownership interest in Cameron LNG JV under the equity method.
An affiliate of TotalEnergies SE, an affiliate of Mitsui & Co., Ltd., and Japan LNG Investment, LLC (a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha) each own 16.6% of Cameron LNG JV. SI Partners accounts for its ownership interest in Cameron LNG JV under the equity method.
SI Partners owns a 100% interest in Sempra LNG Holding, LP and a 99.9% interest in IEnova at December 31, 2024. The minority partners in SI Partners and Sempra are parties to the second amended and restated agreement of limited partnership of SI Partners (the LP Agreement).
SI Partners owns a 100% interest in Sempra LNG Holding, LP and a 99.9% interest in IEnova at December 31, 2025. The minority partners in SI Partners and Sempra are parties to a limited partnership agreement of SI Partners.
SDG&E’s 500-kV Southwest Powerlink transmission line, which is shared with Arizona Public Service Company and Imperial Irrigation District, extends from Palo Verde, Arizona to San Diego, California. SDG&E’s share of the line is 1,163 MW, although it can be less under certain system conditions.
SDG&E’s 500-kV Southwest Powerlink transmission line, which is shared with Arizona Public Service Company and Imperial Irrigation District, extends from Palo Verde, Arizona to San Diego, California. SDG&E’s share of the line is 1,163 MW, although it can be less under certain system conditions. SDG&E’s Sunrise Powerlink is a 500-kV transmission line constructed by SDG&E that extends across Southern California.
These electric facilities are primarily in the San Diego, Imperial and Orange counties of California, and in Arizona and Nevada and consisted of 2,021 miles of transmission lines, 24,149 miles of distribution lines and 159 substations at December 31, 2024. Occasionally, various areas of the service territory require expansion to accommodate customer growth and maintain reliability and safety.
These electric facilities are primarily in the San Diego, Imperial and Orange counties of California and in Arizona and Nevada and consisted of 2,018 miles of transmission lines, 24,210 miles of distribution lines and 158 substations at December 31, 2025. Occasionally, various areas of the service territory require expansion to accommodate customer growth and maintain reliability and safety.
The CPUC established the CCM to apply in the interim years between required cost of capital applications and considers changes in the cost of capital based on changes in interest rates based on the applicable utility bond index published by Moody’s (the CCM benchmark) for each 12-month period ending September 30 (the measurement period).
The CPUC established the CCM to apply in the interim years between required cost of capital applications. The CCM considers changes in the cost of capital using changes in interest rates as reflected by the applicable utility bond index published by Moody’s (CCM benchmark rate) for each 12-month period ending September 30 (the measurement period).
Risk Factors” and “Part II – Item 7. MD&A – Capital Resources and Liquidity – Sempra Infrastructure.” 2024 Form 10-K | 22 Table of Contents LNG Sempra Infrastructure’s LNG business line is comprised of a natural gas liquefaction and regasification portfolio in operation, construction or development, and is focused on securely delivering natural gas to markets around the world.
Risk Factors” and “Part II – Item 7. MD&A – Capital Resources and Liquidity – Sempra Infrastructure.” LNG Sempra Infrastructure’s LNG business line is comprised of a natural gas liquefaction and regasification portfolio in development, under construction or in operation and is focused on securely delivering natural gas to markets around the world.
We have since expanded our regulated public utility presence into Texas through our 80.25% interest in Oncor and 50% interest in Sharyland Utilities. Sempra Infrastructure’s assets include investments in the U.S. and Mexico with a focus on LNG, energy networks and low carbon solutions. Business Strategy Our mission is to be North America’s premier energy infrastructure company.
We have since expanded our regulated public utility presence into Texas through our 80.25% interest in Oncor and 50% interest in Sharyland Utilities. Sempra Infrastructure’s assets include investments in the U.S. and Mexico with a focus on LNG, energy networks and low carbon solutions. Business Strategy Sempra’s mission is to build America’s leading utility growth business.
Federal;” ▪ has jurisdiction over the proposed construction of major new electric generation, transmission and distribution, and natural gas storage, transmission and distribution facilities in California; ▪ conducts reviews and audits of utility performance and compliance with regulatory guidelines and conducts investigations related to various matters, such as safety, reliability and planning, deregulation, competition and the environment; and ▪ regulates the interactions and transactions of SDG&E and SoCalGas with Sempra and other affiliates, including their marketing functions.
Federal;” ▪ has jurisdiction over the proposed construction of major electric generation, transmission and distribution, and natural gas transmission, distribution and storage facilities in California; ▪ conducts reviews and audits of utility performance and compliance with regulatory guidelines and conducts investigations related to various matters, such as safety standards and practices, reliability and planning, deregulation, competition, disconnection and billing practices, commodity pricing, resource adequacy and environmental compliance; and ▪ regulates the interactions and transactions of SDG&E and SoCalGas with Sempra and other affiliates, including their marketing functions.
We discuss regulatory oversight by CARB below in “Environmental Matters – Air Quality and GHG Emissions.” 2024 Form 10-K | 27 Table of Contents Texas Oncor’s and Sharyland Utilities’ rates are regulated at the state level by the PUCT and, in the case of Oncor, at the city level by certain cities.
We discuss regulatory oversight by CARB below in “Environmental Matters – Air Quality and GHG Emissions.” Texas Oncor’s and Sharyland Utilities’ rates are regulated at the state level by the PUCT and, in the case of Oncor, at the city level by certain cities.
Noncore customers at SDG&E consist primarily of electric generation and large commercial customers. 2024 Form 10-K | 17 Table of Contents Noncore customers are responsible for procuring their natural gas requirements, as the regulatory framework does not allow SoCalGas and SDG&E to recover the cost of natural gas procured and delivered to noncore customers.
Noncore customers at SDG&E consist primarily of electric generation and large commercial customers. 2025 Form 10-K | 17 Tab le of Cont ents Noncore customers are responsible for procuring their natural gas requirements, as the regulatory framework does not allow SoCalGas and SDG&E to recover the cost of natural gas procured and delivered to noncore customers.
Sempra Infrastructure owns and operates the TdM power plant in the vicinity of Mexicali, Baja California, adjacent to the Mexico-U.S. border.
SI Partners owns and operates the TdM power plant in the vicinity of Mexicali, Baja California, adjacent to the Mexico-U.S. border.
The references to our websites in this report are not active hyperlinks and the information contained on, or that can be accessed through, the websites of Sempra, SDG&E and SoCalGas or any other website referenced herein is not a part of or incorporated by reference in this report or any other document that we file with or furnish to the SEC. 2024 Form 10-K | 37 Table of Contents
The references to our websites in this report are not active hyperlinks and the information contained on, or that can be accessed through, the websites of Sempra, SDG&E and SoCalGas or any other website referenced herein is not a part of or incorporated by reference in this report or any other document that we file with or furnish to the SEC. 2025 Form 10-K | 39 Tab le of Cont ents
These responsibilities consist of the construction, maintenance and security of transmission facilities and substations and the monitoring, controlling and dispatching of high-voltage electricity over its transmission facilities in coordination with ERCOT, which we discuss below in “Regulation – Utility Regulation – ERCOT Market.” At December 31, 2024, Oncor’s transmission system included approximately 18,324 circuit miles of transmission lines, a total of 1,288 transmission and distribution substations, and interconnection to 192 third-party generation facilities totaling 58,597 MW.
These responsibilities consist of the construction, maintenance and security of transmission facilities and substations and the monitoring, controlling and dispatching of high-voltage electricity over its transmission facilities in coordination with ERCOT, which we discuss below in “Regulation – Utility Regulation – ERCOT Market.” At December 31, 2025, Oncor’s transmission system included approximately 18,418 circuit miles of transmission lines, a total of 1,333 transmission and distribution substations, and interconnection to 230 third-party generation facilities totaling 63,670 MW.
The proceeding generally establishes the test year revenue requirements and provides for attrition, or annual increases in revenue requirements, for each year following the test year. Both the test year revenue requirements and attrition authorize how much SDG&E and SoCalGas can collect from their customers in base rates. We discuss the GRC in “Part I – Item 1A.
The proceeding generally establishes the test year revenue requirements and provides for attrition, or annual increases in revenue requirements, for each year following the test year. Both the test year revenue requirements and attrition authorize how much SDG&E and SoCalGas can collect from their customers in base rates.
These mandates are part of California’s RPS Program. The first and second phases of ESJ, which are in operation, were certified by the CEC under the RPS Program.
The first and second phases of ESJ, which are in operation, were certified by the CEC under the RPS Program.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeMD&A – Capital Resources and Liquidity.” For Sempra, the Rating Agencies have noted that the following events, among others, could lead to negative ratings actions: ▪ expansion of natural gas liquefaction projects or other unregulated businesses in a manner inconsistent with its present level of credit quality ▪ the PA LNG Phase 1 project experiences higher construction costs ▪ Sempra’s consolidated financial measures consistently weaken, or it fails to meet certain financial credit metrics ▪ catastrophic wildfires caused by SDG&E or by any California electric IOUs that participate in the Wildfire Fund, which could exhaust the fund earlier than expected ▪ a ratings downgrade at SDG&E, SoCalGas, Oncor and/or SI Partners For SDG&E, the Rating Agencies have noted that the following events, among others, could lead to negative ratings actions: ▪ catastrophic wildfires caused by SDG&E or by any California electric IOUs that participate in the Wildfire Fund, which could exhaust the fund earlier than expected ▪ a consistent weakening of SDG&E’s financial metrics, or it fails to meet certain financial credit metrics ▪ a deterioration in the regulatory environment, including credit negative outcomes of its pending regulatory proceedings ▪ a ratings downgrade at Sempra For SoCalGas, the Rating Agencies have noted that the following events, among others, could lead to negative ratings actions: ▪ SoCalGas’ financial measures consistently weaken, or it fails to meet certain financial credit metrics ▪ SoCalGas experiences increased business risk due to a deterioration in the regulatory environment, including credit negative outcomes of its pending regulatory proceedings or elevated risk concerning its natural gas utility business ▪ a ratings downgrade at Sempra For SI Partners, the Rating Agencies have noted that the following events, among others, could lead to negative ratings actions: ▪ SI Partners’ failure to meet certain financial credit metrics ▪ a deterioration in SI Partners’ business risk profile, including incremental construction risk or adverse changes in the operating environment in Mexico ▪ the PA LNG Phase 1 project experiences challenges or delays in construction that have an adverse financial impact on SI Partners ▪ a ratings downgrade at Sempra, IEnova, Cameron LNG, LLC and/or Port Arthur LNG, LLC A downgrade of any of our businesses’ credit ratings or ratings outlooks, as well as the reasons for such downgrades, could materially adversely affect the interest rates at which borrowings can be made and debt securities issued and the various fees on our credit facilities.
Biggest changeThe Rating Agencies also have specified certain events that could lead to negative ratings actions, including, among others: ▪ weakening of certain financial measures or failure to meet certain financial credit metrics ▪ ratings downgrades at certain affiliated entities ▪ for Sempra, expansion of unregulated businesses in a manner inconsistent with its present level of credit quality ▪ for Sempra and SDG&E, catastrophic wildfires caused by SDG&E or any other California electric IOU that participates in the Wildfire Fund and Continuation Account ▪ for SDG&E and SoCalGas, a deterioration of the legislative or regulatory environment, including credit negative outcomes of regulatory proceedings ▪ for Sempra and SI Partners, the PA LNG Phase 1 project or PA LNG Phase 2 project experiencing higher construction costs, delays or other challenges In an effort to maintain these credit ratings, we may seek to reduce our outstanding indebtedness or our need for additional indebtedness by reducing or postponing discretionary, non-safety or reliability related capital expenditures or investments in new businesses.
At certain ownership levels, these acquisitions of our common stock could threaten our ability to use some or all of our NOL or tax credit carryforwards if our corporation experiences an “ownership change” under applicable tax rules.
At certain ownership levels, these common stock acquisitions could threaten our ability to use some or all of our NOL or tax credit carryforwards if our corporation experiences an “ownership change” under applicable tax rules.
Any such difference could be significant and could require us to pay a significant amount of cash or deliver a significant number of shares of our common stock to such forward purchaser.
Any such difference could be significant and could require us to pay a significant amount of cash or deliver a significant number of shares of our common stock to a forward purchaser.
The purchase of shares of our common stock by a forward purchaser or its affiliate to unwind the forward purchaser’s hedge position could cause the price of our common stock to increase above the price that would have prevailed in the absence of those purchases (or prevent a decrease in such price), thereby increasing the amount of cash (in the case of cash settlement) or the number of shares (in the case of net share settlement) that we would owe such forward purchaser upon settlement of the applicable forward sale agreement or decreasing the amount of cash (in the case of cash settlement) or the number of shares (in the case of net share settlement) that such forward purchaser would owe us upon settlement of the applicable forward sale agreement.
The purchase of shares of our common stock by a forward purchaser (or its affiliate) to unwind the forward purchaser’s hedge position could cause the price of our common stock to increase above the price that would have prevailed in the absence of those purchases (or prevent a decrease in such price), thereby increasing the amount of cash (in the case of cash settlement) or the number of shares (in the case of net share settlement) that we would owe the forward purchaser upon settlement of the applicable forward sale agreement or decreasing the amount of cash (in the case of cash settlement) or the number of shares (in the case of net share settlement) that the forward purchaser would owe us upon settlement of the applicable forward sale agreement.
Any of these outcomes could have a material adverse effect on SDG&E’s and Sempra’s results of operations, financial condition, cash flows and/or prospects. Natural gas continues to be the subject of political and public debate, including a desire by some to reduce or eliminate reliance on natural gas as an energy source .
Any of these outcomes could have a material adverse effect on Sempra’s and SDG&E’s results of operations, financial condition, cash flows and/or prospects. Natural gas continues to be the subject of political and public debate, including a desire by some to reduce or eliminate reliance on natural gas as an energy source .
We depend on electric transmission lines, natural gas pipelines and other transportation facilities and services owned and operated by third parties to, among other things: ▪ deliver the natural gas, LNG, electricity and LPG we sell to customers or use for our LNG facilities ▪ supply natural gas to our gas storage and electric generation facilities ▪ provide retail energy services to customers If transportation is disrupted, the construction of necessary interconnecting infrastructure is not completed on schedule or at all or capacity is inadequate, we may be delayed in completing projects under development and/or unable to meet our contractual obligations to customers of those projects or existing projects, in which case we may be responsible for damages they incur, such as the cost of acquiring alternative supplies at then-current spot market rates, and we could lose customers that may be difficult to replace.
We depend on electric transmission lines, natural gas pipelines and other transportation facilities and services owned and operated by third parties to, among other things: ▪ deliver the natural gas, LNG, electricity and LPG we sell to customers or use at our LNG facilities ▪ supply natural gas to our gas storage and electric generation facilities ▪ provide retail energy services to customers If transportation is disrupted, the construction of necessary interconnecting infrastructure is not completed on schedule or at all or capacity is inadequate, we may be delayed in completing projects under development and/or unable to meet our contractual obligations to customers of those projects or existing projects, in which case we may be responsible for damages they incur, such as the cost of acquiring alternative supplies at then-current spot market rates, and we could lose customers that may be difficult to replace.
If any of these approvals are suspended, rescinded or otherwise terminated or modified in a manner that makes our continued operation of the applicable business prohibitively expensive or otherwise impracticable, we may be required to adjust or temporarily or permanently cease certain of our operations, sell the associated assets or remove them from service and/or construct new assets intended to bypass the impacted area, in which case we may lose some of our rate base or revenue-generating assets, our development projects may be negatively affected and we may incur impairment charges or other costs that may not be recoverable.
If any of these approvals are suspended, rescinded or otherwise terminated or modified in a manner that makes our continued operation of the applicable business prohibitively expensive or otherwise impracticable, we may be required to adjust or temporarily or permanently cease certain of our operations, sell the associated assets or remove them from service and/or construct new assets intended to bypass the impacted area, in which case we may lose some of our rate base or revenue-generating assets, our development and construction projects may be negatively affected and we may incur impairment charges or other costs that may not be recoverable.
Our businesses also may become involved in new proceedings that we do not consider material, such as the approximately 28,000 proofs of claim that have been filed on behalf of persons who assert the right to file lawsuits in the future based on alleged exposure to asbestos in power plants designed and/or built by certain predecessor entities we acquired in connection with our acquisition of our majority interest in Oncor.
Our businesses also may become involved in proceedings that we do not consider material, such as the approximately 28,000 proofs of claim that have been filed on behalf of persons who assert the right to file lawsuits in the future based on alleged exposure to asbestos in power plants designed and/or built by certain predecessor entities we acquired in connection with our acquisition of our majority interest in Oncor.
In addition, if we are unable to defend and retain title to the properties we own or obtain or retain rights to construct and operate on the properties we do not own in a timely manner, on reasonable terms or at all, we could lose our rights to occupy and use these properties and related facilities, which could prevent, limit or delay existing or proposed operations or projects, increase our costs, and result in breaches of permits or contracts and related legal costs, impairments, fines or penalties.
In addition, if we are unable to defend and retain title to the properties we own or obtain or retain rights to construct and operate on the properties we do not own in a timely manner, on reasonable terms or at all, we could lose our rights to occupy and use these properties and related facilities, which could prevent, limit or delay existing or proposed operations or projects, increase our costs, and result in breaches of permits or contracts and related impairments, fines or penalties.
Moreover, Mexico has experienced periods of high inflation and exchange rate instability in the past, and severe devaluation of the Mexican peso could result in governmental intervention to institute restrictive exchange control policies, as has occurred before in Mexico and other Latin American countries. We discuss our foreign currency exposure at our Mexican subsidiaries in “Part II – Item 7.
Moreover, Mexico has experienced periods of high inflation and exchange rate instability in the past, and severe devaluation of the Mexican peso could result in governmental intervention to institute restrictive exchange control policies, as has occurred in Mexico and other Latin American countries. We discuss our foreign currency exposure at our Mexican subsidiaries in “Part II – Item 7.
In particular, the natural gas pipeline, storage and LNG market segments recently have been characterized by strong and increasing competition for winning new development projects and acquiring existing assets. These competitive factors could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
In particular, the natural gas pipeline, storage and LNG market segments have been characterized by strong and increasing competition for winning new development projects and acquiring existing assets. These competitive factors could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
These requirements may undergo changes at the federal, state, local and foreign levels, including in response to economic or political conditions. Compliance with these requirements, including changes to them or how they are implemented, interpreted or enforced, could increase our operating costs and materially adversely affect how we conduct our business.
These requirements may undergo changes at the federal, state, local and foreign levels, including in response to economic or political conditions. Compliance with these requirements and any changes to them or how they are implemented, interpreted or enforced could increase our operating costs and materially adversely affect how we conduct our business.
We develop our capital expenditure plans based on forecasts as well as regulatory and compliance requirements, including those related to safety, reliability and load growth, gas system planning, and transportation electrification, which generally assume that California will continue to pursue consistent environmental and climate-related policies.
We develop our capital expenditure plans based on assumptions and forecasts as well as regulatory and compliance requirements, including those related to safety, reliability and load growth, gas system planning, and transportation electrification, which generally assume that California will continue to pursue consistent environmental and climate-related policies.
Even though Sempra Texas Holdings Corp. would have administrative appeal rights if the IRS were to invalidate its private letter ruling and/or supplemental private letter ruling, including the right to challenge any adverse IRS position in court, any such appeal would be subject to uncertainties and could fail.
Even though Sempra Texas Holdings Corp. would have administrative appeal rights if the IRS were to invalidate its private letter ruling and/or supplemental private letter ruling, including the right to challenge any adverse IRS position in court, any such appeal would be costly, subject to uncertainties and could fail.
An impairment of our goodwill or long-lived assets could result in a material charge to earnings. We test long-lived assets, including equity method investments, for recoverability when events or changes in circumstances have occurred that may affect the recoverability or the estimated useful lives of the assets.
An impairment of our long-lived assets could result in a material charge to earnings. We test long-lived assets, including equity method investments, for recoverability when events or changes in circumstances have occurred that may affect the recoverability or the estimated useful lives of the assets.
In December 2024, the FERC issued an order, which SDG&E has appealed, finding that SDG&E is not eligible for the California ISO adder and that the TO5 adder refund provision has been triggered, requiring SDG&E to refund customers the California ISO adder retroactively from June 1, 2019.
In December 2024, the FERC issued an order, which SDG&E has appealed, finding that SDG&E is not eligible for the California ISO adder and that the TO5 adder refund provision had been triggered, requiring SDG&E to refund customers the California ISO adder retroactively from June 1, 2019.
In addition, insufficient electric capacity within ERCOT or significant changes within ERCOT or to the ERCOT market structure that impact transmission and distribution utilities, including adverse publicity or public perception, additional regulatory requirements or oversight, could materially adversely affect Oncor.
In addition, insufficient electric generation capacity within ERCOT or significant changes within ERCOT or to the ERCOT market structure that impact transmission and distribution utilities, including adverse publicity or public perception or additional regulatory requirements or oversight, could materially adversely affect Oncor.
Factors that have historically impacted and could continue to impact the amount, timing and types of capital expenditures we make include the cost and availability of financing; economic and market conditions; regulatory approvals; changes in tax law; business opportunities providing desirable rates of return; forecasts related to safety, reliability and load growth, gas system planning, and transportation electrification; safety and environmental requirements and climate-related policies; and cooperation of third-parties, including customers, partners, suppliers, lenders and others.
Factors that have historically impacted and could continue to impact the amount, timing and types of capital expenditures we make include the cost and availability of financing; economic and market conditions; regulatory decisions; changes in tax law; business opportunities providing desirable rates of return; forecasts related to safety, reliability and load growth, gas system planning and transportation electrification; safety and environmental requirements and climate-related policies; and cooperation of third parties, including customers, partners, suppliers, lenders and others.
If the framework or other mechanisms designed to achieve ratepayer indifference do not perform as intended, if the law changes, or if the law is not interpreted or enforced as expected, SDG&E’s remaining bundled customers could experience large increases in rates for commodity costs under commitments made on behalf of CCA and DA customers prior to their departure or, if all such costs are not recoverable in rates, SDG&E could experience material increases in its unrecoverable commodity costs.
If the framework or other mechanisms designed to achieve ratepayer indifference do not perform as intended, if the law changes, or if the law is not interpreted or enforced as expected, SDG&E’s remaining bundled customers could experience large increases in rates for ongoing historical commodity costs under commitments made on behalf of CCA and DA customers prior to their departure or, if all such costs are not recoverable in rates, SDG&E could experience material increases in its unrecoverable commodity costs.
These reforms and any further Mexican Constitutional, legal or regulatory changes could affect the Mexican economy, energy sector and our businesses, the extent of which we currently are unable to predict.
These reforms and any further Mexican Constitutional, legal or regulatory changes could adversely affect the Mexican economy, energy sector and our businesses, the extent of which we currently are unable to predict.
These measures subject us and Oncor to various restrictions, including: ▪ seven members of Oncor’s 13-person board of directors must be independent directors in all material respects under the rules of the NYSE in relation to Sempra and its affiliates and any other owners of Oncor, and also must have no material relationship with Sempra or its affiliates or any other owners of Oncor currently or within the previous 10 years; of the six remaining directors, two must be designated by Sempra, two must be designated by Oncor’s minority owner, TTI, and two must be current or former Oncor officers ▪ Oncor will not pay dividends or other distributions (except for contractual tax payments) if (i) a majority of Oncor’s independent directors or any of the directors appointed by TTI determines that it is in the best interest of Oncor to retain such amounts to meet expected future requirements, (ii) the payment would cause Oncor’s debt-to-equity ratio to exceed the debt-to-equity ratio approved by the PUCT, or (iii) unless otherwise allowed by the PUCT, Oncor’s senior secured debt credit rating by any of the Rating Agencies falls below BBB (or Baa2 for Moody’s) ▪ there must be certain “separateness measures” maintained to reinforce the legal and financial separation of Oncor from Sempra, including a requirement that dealings between Oncor and Sempra or Sempra’s affiliates (other than Oncor Holdings and its subsidiaries) must be on an arm’s-length basis, limitations on affiliate transactions and a prohibition on pledging Oncor assets or membership interests for any entity other than Oncor ▪ a majority of Oncor’s independent directors and the directors designated by TTI that are present and voting (with at least one required to be present and voting) must approve any annual or multi-year budget if the aggregate amount of capital expenditures or O&M in the budget differs by more than 10% from the corresponding amounts in the budget for the preceding fiscal year or multi-year period, as applicable As a result of these measures, we do not control Oncor Holdings or Oncor, and we have limited ability to direct the management, operations and policies of Oncor Holdings and Oncor, including the deployment or disposition of their assets, declarations of dividends or other distributions, strategic planning and other important matters.
These measures subject us and Oncor to various restrictions, including: ▪ seven members of Oncor’s 13-person board of directors must be independent directors in all material respects under the rules of the NYSE in relation to Sempra and its affiliates and any other owners of Oncor, and also must have no material relationship with Sempra or its affiliates or any other owners of Oncor currently or within the previous 10 years; of the six remaining directors, two must be designated by Sempra, two must be designated by Oncor’s minority owner, TTI, and two must be current or former Oncor officers ▪ Oncor will not pay dividends or other distributions (except for contractual tax payments) if (i) a majority of Oncor’s independent directors or any of the directors appointed by TTI determines that it is in the best interest of Oncor to retain such amounts to meet expected future requirements, (ii) the payment would cause Oncor’s debt-to-equity ratio to exceed the debt-to-equity ratio approved by the PUCT, or (iii) unless otherwise allowed by the PUCT, Oncor’s senior secured debt credit rating by any of the Rating Agencies falls below BBB (or Baa2 for Moody’s) ▪ certain “separateness measures” must be maintained to reinforce the legal and financial separation of Oncor from Sempra, including a requirement that dealings between Oncor and Sempra or Sempra’s affiliates (other than Oncor Holdings and its subsidiaries) must be on an arm’s-length basis, limitations on affiliate transactions and a prohibition on pledging Oncor assets or membership interests for any entity other than Oncor ▪ a majority of Oncor’s independent directors and the directors designated by TTI that are present and voting (with at least one required to be present and voting) must approve any annual or multi-year budget if the aggregate amount of capital expenditures or O&M in the budget differs by more than 10% from the corresponding amounts in the budget for the preceding fiscal year or multi-year period, as applicable As a result of these measures, we do not control Oncor Holdings or Oncor, and we have limited ability to direct the management, policies and operations of Oncor Holdings and Oncor, including the deployment or disposition of their assets, declarations of dividends or other distributions, strategic planning, risk management, climate-related activities, cybersecurity practices and other important matters.
Our businesses depend on the performance of business partners, customers, suppliers, contractors, and other counterparties under contractual and other arrangements to provide, among other things, services, equipment, or commodities.
Our businesses depend on the performance of business partners, customers, suppliers, contractors, and other counterparties under contractual and other arrangements to provide, among other things, services, supplies, equipment or commodities.
The operation of existing facilities and any future projects we complete involves many risks, including the potential for unforeseen design flaws, engineering challenges, or the breakdown for other reasons of facilities, equipment or processes; labor disputes or shortages; fuel interruption; environmental contamination; increasing regulatory requirements, including from regulations aiming to reduce GHG emissions; and the other operational risks that we discuss above under “Risks Related to All Sempra Businesses – Operational Risks.” Any of these events could lead to our facilities being idle or operating below expected levels, which may result in lost revenues or increased expenses, including higher maintenance costs and penalties.
The operation of existing facilities and any future projects we complete involves many risks, including the potential for unforeseen design flaws, engineering challenges, or breakdowns of facilities, equipment or processes; labor disputes or shortages; fuel interruption; environmental contamination; increasing regulatory requirements, including from regulations aiming to reduce GHG emissions; and the other operational risks that we discuss above under “Risks Related to All Sempra Businesses – Operational Risks.” Any of these events could lead to our facilities being idle or operating below expected levels, which may result in lost revenues or increased expenses, including higher maintenance costs and penalties.
Any of these occurrences could decrease revenues and earnings and/or increase costs, including maintenance costs or restoration expenses, amounts associated with claims against us, and regulatory fines, penalties and disallowances.
Any of these occurrences could decrease revenues and earnings and/or increase costs, including restoration expenses, amounts associated with claims against us, and regulatory fines, penalties and disallowances.
Our digitalization and grid modernization efforts, including the networking of operational technology assets such as substations, continue to increase the potential vulnerabilities and points of failure in our information systems.
Our digitalization and grid modernization efforts, including the networking of operational technology assets such as substations, continue to increase the potential vulnerabilities and points of failure in our systems.
A material charge to earnings from an impairment loss could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. Market performance or changes in other assumptions could require unplanned contributions to pension and PBOP plans. Sempra, SDG&E and SoCalGas provide defined benefit pension and PBOP plans to eligible employees and retirees.
A material charge to earnings from an impairment loss could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. Market performance, significant transactions or changes in other assumptions could require unplanned contributions to pension and PBOP plans. Sempra, SDG&E and SoCalGas provide defined benefit pension and PBOP plans to eligible employees and retirees.
In an effort to maintain a sustainable and durable business risk profile and continue to focus on value creation, Sempra has evaluated and updated its climate aspirations to reflect the changing policy, regulatory, commercial and technological landscape, including stakeholders’ evolving focus on reliability, resiliency and affordability and the pace and impact of climate and other public policies.
In an effort to maintain a sustainable and durable business risk profile and continue to focus on value creation, Sempra updated its climate aspirations to reflect the changing policy, regulatory, commercial and technological landscape, including stakeholders’ evolving focus on reliability, resiliency and affordability and the pace and impact of climate and other public policies.
Any such outcome could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows and/or prospects.
Any such outcome could have a material adverse effect on Sempra’s results of operations, financial condition, cash flows and/or prospects.
Our ability to pay dividends and meet our debt and other obligations largely depends on distributions from our subsidiaries and equity method investments, which in turn depend on their ability to execute their business strategies and generate cash flows in excess of their own expenditures, dividend payments to third-party owners (if any) and debt and other obligations.
Our ability to pay dividends and meet our debt and other obligations largely depends on distributions from our subsidiaries and equity method investees, which in turn depend on their ability to execute their business strategies and generate cash flows in excess of their own expenditures, dividend payments to third-party owners (if any) and debt and other obligations.
A loss that is not fully insured, is not sufficiently covered by the Wildfire Fund and/or cannot be recovered in customer rates could materially adversely affect Sempra’s and one or both of SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.
A loss that is not fully insured, is not sufficiently covered by the Wildfire Fund or the Continuation Account and/or cannot be recovered in customer rates could materially adversely affect Sempra’s and one or both of SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.
Even if such costs are recoverable, these costs, coupled with necessary safety and reliability investments, may negatively impact the affordability of SDG&E’s and SoCalGas’ customer rates and, for our businesses that are not regulated utilities, may cause costs to increase to levels that reduce customer demand and growth.
Even if such costs are recoverable, these costs, coupled with necessary safety and reliability investments, may negatively impact the affordability of SDG&E’s and SoCalGas’ services and, for our businesses that are not regulated utilities, may cause costs to increase to levels that reduce customer demand and growth.
In addition, attaining California’s clean energy goals will require sustained investments in transmission and distribution grid modernization, renewable energy integration projects, energy efficiency programs, operational and data management systems, and electric vehicle and energy storage infrastructure, which may increase exposure to overall grid instability and technology obsolescence.
In addition, attaining California’s clean energy goals will require sustained investments in transmission and distribution grid modernization, renewable energy integration projects, operational and data management systems, and electric vehicle and energy storage infrastructure, which may increase exposure to overall grid instability and technology obsolescence.
Wildfire Mitigation Efforts Although we expend significant resources on measures designed to mitigate wildfire risks, these measures may not be effective in preventing wildfires or reducing our wildfire-related losses, and their costs may not be fully recoverable in rates.
Regulatory Actions Related to Wildfire Mitigation Efforts Although we expend significant resources on measures designed to mitigate wildfire risks, these measures may not be effective in preventing wildfires or reducing our wildfire-related losses, and their costs may not be fully recoverable in rates.
SDG&E, SoCalGas and Sempra may be materially adversely affected by revisions or reinterpretations of existing or new legislation, regulations, decisions, orders or interpretations of the CPUC, the FERC or other regulatory bodies, any of which could change how SDG&E and SoCalGas operate, affect their ability to recover various costs through rates or adjustment mechanisms, require them to incur additional expenses and compliance costs or otherwise materially adversely affect their and Sempra’s results of operations, financial condition, cash flows and/or prospects.
Sempra, SDG&E and SoCalGas may be materially adversely affected by revisions or reinterpretations of existing or new legislation, regulations, decisions, orders or interpretations of the CPUC, the FERC or other regulatory bodies, any of which could change how SDG&E and SoCalGas operate, affect their ability to recover various costs through rates or adjustment mechanisms, require them to incur additional compliance or other costs, including fines and penalties, or otherwise materially adversely affect their and Sempra’s results of operations, financial condition, cash flows and/or prospects.
The inability to access capital from our subsidiaries and equity method investments could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. Sempra’s rights to the assets of its subsidiaries and equity method investments are structurally subordinated to the claims of each entity’s trade and other creditors.
Any inability to access capital from our subsidiaries and equity method investees could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. Sempra’s rights to the assets of its subsidiaries and equity method investees are structurally subordinated to the claims of each entity’s trade and other creditors.
CPUC Authority Over Operational Matters Our operations are subject to CPUC rules (and similar FERC rules), commonly referred to as “affiliate rules,” relating to transactions among SDG&E, SoCalGas and other Sempra businesses.
Operational Matters Our operations are subject to CPUC rules (and similar FERC rules), commonly referred to as “affiliate rules,” relating to transactions among SDG&E, SoCalGas and other Sempra businesses.
ITEM 1A. RISK FACTORS When evaluating our company and its consolidated entities and any investment in our or their securities, you should carefully consider the following risk factors and all other information contained in this report and the other documents we file with the SEC (including those filed subsequent to this report).
ITEM 1A. RISK FACTORS When evaluating our company and its businesses and any investment in our or their securities, you should carefully consider the following risk factors and all other information contained in this report and the other documents we file with the SEC (including those filed subsequent to this report).
In addition, entities accounted for as equity method investments, which we do not control, and our subsidiaries are all separate and distinct legal entities that are not obligated to pay dividends or make loans or distributions to us and could be precluded from doing so by legislation, regulation or contractual restrictions, in times of financial distress or in other circumstances.
In addition, our subsidiaries and entities accounted for as equity method investments are all separate and distinct legal entities that are not obligated to pay dividends or make loans or distributions to us and could be precluded from doing so by legislation, regulation or contractual restrictions, in times of financial distress or in other circumstances.
If any of these circumstances occurs, we may not receive an adequate or any return on our investment in these activities and our results of operations, financial condition, cash flows and/or prospects could be materially adversely affected. The operation of our facilities depends on good labor relations with our employees and our ability to attract and retain qualified personnel.
If any of these circumstances occur, we may not receive an adequate or any return on our investment, and our results of operations, financial condition, cash flows and/or prospects could be materially adversely affected. The operation of our facilities depends on good labor relations with our employees and our ability to attract and retain qualified personnel.
Any such event could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. Sempra Infrastructure’s obligations and those of its counterparties, such as its LNG customers, are contractually subject to suspension or termination for force majeure events, which generally are beyond the control of the parties.
Any such event could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. SI Partners’ obligations and those of its counterparties, such as its LNG customers, are contractually subject to suspension or termination for force majeure events, which generally are beyond the control of the parties.
The framework is intended to more equitably allocate SDG&E’s procurement cost obligations among customers served by SDG&E and customers now served by CCA and DA.
The framework is intended to more equitably allocate SDG&E’s historical energy procurement cost obligations among customers served by SDG&E and customers now served by CCA and DA.
Such incidents could result in operational disruptions, electric or gas outages, property damage, personal injury or death and could cause secondary incidents that also may have these or other negative effects, such as fires; leaks or spills of gases, natural gas odorant or radioactive material; damage to natural resources; or other impacts to affected communities.
Such incidents, which have occurred from time to time, could result in operational disruptions, electric or gas outages, property damage, personal injury or death and could cause secondary incidents that also may have these or other negative effects, such as fires; leaks or spills of gases, natural gas odorant or radioactive material; damage to natural resources; or other impacts to affected communities.
If they fail to perform their obligations in accordance with these arrangements or elect to exercise their early termination rights, we may be unable to meet our obligations and may be required to enter into alternative arrangements or honor our underlying commitments at then-current market prices, which may result in losses or delays or other operational disruptions.
If they fail to perform their obligations in accordance with these arrangements or elect to exercise early termination rights, we may be unable to meet our obligations and may be required to secure alternative arrangements, if available, or honor our underlying commitments at then-current market prices, which may result in losses or delays or other operational disruptions.
Financial and Capital Stock-Related Risks Successfully completing our five-year capital expenditures plan is subject to certain risks. The execution of our five-year capital expenditures plan may not be completed in accordance with current expectations or produce the desired results.
Financial and Capital Stock-Related Risks Successfully executing our five-year capital expenditures plan is subject to risks. The execution of our five-year capital expenditures plan may not be completed in accordance with current expectations or produce the desired results.
Credit rating agencies routinely evaluate Sempra, SDG&E, SoCalGas, SI Partners and certain of our other businesses whose ratings are based on several factors, including the factors described below and, generally, the ability to generate cash flows; terms and levels of indebtedness, including the credit rating agencies’ treatment of certain types of indebtedness, such as subordinated indebtedness which is given partial equity credit but carries a higher interest rate than comparable senior indebtedness; overall financial strength; specific transactions or events, such as share repurchases and significant litigation; the status of certain capital projects, including our LNG projects; and general economic and industry conditions.
Credit rating agencies routinely evaluate Sempra, SDG&E, SoCalGas, SI Partners and certain of our other businesses, whose ratings are based on many factors, including, as applicable, the ability to generate cash flows; terms and levels of indebtedness, including the credit rating agencies’ treatment of certain types of indebtedness, such as subordinated indebtedness which is given partial equity credit but carries a higher interest rate than comparable senior indebtedness; overall financial strength; specific transactions or events, such as share repurchases and significant litigation; the status of certain capital projects; and general economic and industry conditions.
A decrease in demand for or supply of LNG or natural gas from such customers or the occurrence of other events that hinder Sempra Infrastructure from maintaining such agreements or establishing new ones could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
A decrease in demand for or supply of LNG or natural gas from such customers or the occurrence of other events that hinder SI Partners from maintaining such agreements or establishing new ones could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
Frequent and severe drought conditions, inconsistent and extreme swings in precipitation, changes in vegetation, unseasonably warm temperatures, low humidity, strong winds and other factors have increased the duration of the wildfire season and the intensity, prevalence and difficulty of prevention and containment of wildfires in California, including in SDG&E’s and SoCalGas’ service territories.
Frequent and severe drought conditions, inconsistent and extreme swings in precipitation, changes in vegetation, unseasonably warm temperatures, low humidity, strong winds and other factors have increased the duration of the wildfire season and the intensity, prevalence and difficulty of preventing and containing wildfires in California, including in SDG&E’s and SoCalGas’ service territories.
Sempra Infrastructure’s energy infrastructure assets may be considered by the Mexican government to be a public service or essential for the provision of a public service, in which case these assets and the related businesses could be subject to expropriation or nationalization, loss of concessions, renegotiation or annulment of existing contracts, and other similar risks.
SI Partners’ energy infrastructure assets may be considered by the Mexican government to be a public service or essential for the provision of a public service, in which case these assets and the related businesses could be subject to expropriation or nationalization, loss of concessions, renegotiation or annulment of existing contracts, and other similar risks.
We will generally have the right, in lieu of physical settlement of any forward sale agreement, to elect cash or net share settlement in respect of any or all of the shares of our common stock subject to such forward sale agreement.
We generally have the right, in lieu of physical settlement of any forward sale agreement, to elect cash or net share settlement in respect of any or all of the shares of our common stock subject to each forward sale agreement.
Our businesses depend on recruiting, developing and retaining qualified personnel. Several of our businesses have in place collective bargaining agreements with different labor unions, which are generally negotiated on a company-by-company basis.
Our businesses depend on recruiting, developing and retaining qualified personnel. Several of our businesses have collective bargaining agreements with different labor unions, which are negotiated on a company-by-company basis.
We face risks related to environmental and climate change regulation and the costs of the energy transition. The impacts from the mitigation of climate change and related regulations may increase the costs we incur to procure and transmit energy and provide other services.
We face risks related to environmental and climate change regulation and the costs of the energy transition. The impacts from efforts to mitigate climate change and related regulations may increase the costs we incur to procure and transmit energy and provide other services.
In October 2024, SDG&E submitted its TO6 filing to the FERC, requested to be effective January 1, 2025, and subject to refund. SDG&E’s TO6 filing proposes, among other items, an increase to SDG&E’s currently authorized base ROE from 10.10% to 11.75% plus the California ISO adder, for a total ROE of 12.25%.
In October 2024, SDG&E submitted its TO6 filing to the FERC and requested it to be effective January 1, 2025. SDG&E’s TO6 filing proposed, among other items, an increase to SDG&E’s currently authorized base ROE from 10.10% to 11.75% plus the California ISO adder, for a total ROE of 12.25%.
These approvals may not be granted in a timely manner (including due to potential staffing issues at U.S. regulatory agencies) or at all or may be modified, rescinded or fail to be extended for a variety of reasons, including due to legal or regulatory changes or political considerations.
These approvals may not be granted in a timely manner (including due to potential staffing and funding issues at regulatory agencies) or at all or may be modified, rescinded or fail to be extended for a variety of reasons, including due to legal or regulatory changes or political considerations.
Conducting these activities in foreign jurisdictions subjects us to complex management, security, political, legal, economic and financial risks that vary by country, many of which may differ from and potentially be greater than those associated with our wholly domestic businesses, and the occurrence of any of these 2024 Form 10-K | 60 Table of Contents risks could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
Conducting these activities in foreign jurisdictions subjects us to complex management, security, political, legal, economic and financial risks that vary by country, many of which may differ from and potentially be greater than those associated with our wholly domestic businesses, and the occurrence of any of these risks could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.
We often rely on third-party vendors to deploy new technologies and maintain and update our systems (including providing security updates), and these third parties may not have adequate risk management, technology resiliency and information security measures with respect to their systems or may fail to timely provide and install software updates.
We increasingly rely on third-party vendors to deploy new technologies and host, maintain and update our systems (including providing security updates), and these third parties may not have adequate risk management, technology resiliency and cybersecurity measures with respect to their systems or may fail to timely provide and install software updates.
The City of San Diego is studying the feasibility of municipalization as a potential alternative to SDG&E’s existing electric franchise agreement, and various aspects of SDG&E’s natural gas and electric franchise agreements have also been challenged in two lawsuits that we discuss in Note 15 of the Notes to the Consolidated Financial Statements.
The City of San Diego is studying the feasibility of municipalization as a potential alternative to SDG&E’s existing electric franchise agreement, and various aspects of SDG&E’s natural gas and electric franchise agreements have also been challenged in a lawsuit that we discuss in Note 16 of the Notes to Consolidated Financial Statements.
Failure to comply with environmental laws and regulations may subject us to fines and penalties, including criminal penalties in some cases, and/or curtailment of our operations.
Any failure to comply with these or other environmental laws and regulations may subject us to fines and penalties, including criminal penalties in some cases, and/or curtailment of our operations.
As a result, although we are dedicated to progress on our climate aims and are continuing to develop capabilities designed to reduce GHG emissions from our own operations as well as to support consumers’ and markets’ own climate goals, we may not be successful in achieving these objectives.
As a result, although we are dedicated to making progress on our climate aims and are continuing to develop capabilities designed to reduce GHG emissions from our own operations as well as to support consumers’ and markets’ climate goals and applicable legislative and regulatory mandates, we may not be successful in achieving these objectives.
Sempra Infrastructure’s ability to secure new or maintain, extend or replace existing long-term sales or capacity agreements for its natural gas pipeline operations depends on, among other factors, demand for and supply of LNG and/or natural gas from its transportation customers, which may include our LNG facilities.
SI Partners’ ability to secure new or maintain or extend existing long-term sales or capacity agreements for its natural gas pipeline operations depends on, among other factors, demand for and supply of LNG and/or natural gas from its transportation customers, which may include our LNG facilities.
Exchange and inflation rates with respect to Mexico and fluctuations in those rates may have an impact on the revenue, cash flows and costs from our international operations, which could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.
Our operations in Mexico pose foreign currency exchange rate and inflation risks. Exchange and inflation rates with respect to Mexico and fluctuations in those rates may have an impact on the revenue, cash flows and costs from our international operations, which could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.
If any of these risks occurs, our results of operations, financial condition, cash flows and/or prospects could be materially adversely affected, our actual results could differ materially from those expressed or implied in our forward-looking statements, and the trading prices of our securities and those of our consolidated entities could decline.
If any of these risks occur, our results of operations, financial condition, cash flows and/or prospects could be materially adversely affected, our actual results could differ materially from those expressed or implied in our forward-looking statements, and the trading prices of our securities and those of our businesses could decline.
Recovery may be delayed and/or insufficient if the applicable ratemaking mechanism involves a significant time lag between when costs are incurred and when those costs are recovered in rates or if there are material differences between the authorized costs embedded in rates (which are set on a prospective basis) and the actual costs incurred.
Recovery may be delayed and/or insufficient if ratemaking mechanisms involve a significant time lag between when costs are incurred and when those costs are recovered in rates or if there are material differences between the authorized costs embedded in rates (which are set on a prospective basis) and the actual costs incurred.
One of our wildfire mitigation strategies is to de-energize certain circuits for safety when there is elevated weather-related wildfire ignition risk.
One of SDG&E’s wildfire mitigation strategies is to de-energize certain circuits for safety when there is elevated weather-related wildfire ignition risk.
In ERCOT, rates are set by the PUCT based on a historical test year, and as a result, the rates Oncor is allowed to charge generally will not exactly match its costs at any given point in time and there is no assurance that it will be able to timely or fully recover its actual costs and/or earn its full return on invested capital, particularly during periods of increased capital spending by Oncor, high inflation, or increases in general interest rates relative to Oncor’s most recent base rate review.
In ERCOT, rates are set by the PUCT based on a historical test year, and as a result, the rates Oncor is allowed to charge generally will not exactly match its costs at any given point in time and it may not be able to timely or fully recover its actual costs and/or earn its full return on invested capital, particularly during periods of increased capital spending by Oncor, high inflation, or increases in interest rates, storm-related costs, and other operating costs relative to Oncor’s most recent base rate review.
Force majeure declarations may also have attendant negative consequences, or loss or deferral of revenue arising from non-deliveries of natural gas from suppliers or LNG to customers in certain circumstances. Also, certain force majeure events may impact the contractors constructing Sempra Infrastructure’s projects, which may result in delays or increased costs.
Force majeure declarations may have attendant negative consequences, such as loss or deferral of revenue arising from non-deliveries of natural gas from suppliers or LNG to customers in certain circumstances. Also, certain force majeure events may impact the contractors constructing SI Partners’ projects, which may result in delays or increased costs.
The markets in which we operate are characterized by numerous capable competitors, many of which have extensive and diversified development and/or operating experience domestically and internationally and financial resources similar to or greater than ours.
We face risks from increasing competition. The markets in which we operate are characterized by numerous capable competitors, many of which have extensive and diversified development and/or operating experience domestically and internationally and financial resources similar to or greater than ours.
In addition, Sempra may elect to make capital contributions to its subsidiaries, which are not required to be repaid and are structurally subordinated to claims by creditors of the applicable subsidiary. Our investments in businesses we do not control expose us to risks. We have investments in businesses we do not control or manage or in which we share control.
In addition, Sempra may elect to make additional capital contributions to its subsidiaries or equity method investments, which are not required to be repaid and are structurally subordinated to claims by creditors of the applicable subsidiary. Our investments in businesses we do not control expose us to risks.
We are a holding company and substantially all the assets that produce our earnings are owned by our subsidiaries or entities we do not control, including equity method investments.
We are a holding company and substantially all the assets that produce our earnings are owned by our subsidiaries or equity method investees, which are entities we do not control.
In addition, we may not realize all the anticipated benefits from future acquisitions, divestitures, partnerships or JVs for various reasons, including difficulties integrating or separating operations and personnel effectively or in a timely manner, higher or unexpected transaction or operating costs, unknown liabilities, and fluctuations in markets.
In addition, we may not realize the anticipated benefits from future transactions for various reasons, including difficulties integrating or separating operations and personnel effectively or in a timely manner, higher or unexpected transaction or operating costs, unknown liabilities, and fluctuations in markets.
Foreign Corrupt Practices Act, the Mexican Federal Anticorruption Law in Public Contracting (Ley Federal Anticorrupción en Contrataciones Públicas) and similar laws, and are sensitive to foreign policy, trade policy and other geopolitical factors related to or applicable in each of these countries. The current and the last U.S.
Foreign Corrupt Practices Act, the Mexican Federal Anticorruption Law in Public Contracting (Ley Federal Anticorrupción en Contrataciones Públicas) and similar laws, and are sensitive to geopolitical factors in each of these countries. The current and the last U.S.
Viruses, ransomware, malware and other forms of cyber-attacks targeting utility systems and other energy infrastructure are continuously increasing in sophistication, magnitude and frequency, may not be recognized until launched against a target and may further escalate during periods of heightened geopolitical tensions.
Viruses, ransomware, malware and other forms of cyber-attacks targeting utility systems and other energy infrastructure continue to increase in sophistication, magnitude and frequency, may not be recognized until launched against a target and may further escalate during periods of heightened geopolitical tensions.
To the extent we have unhedged positions, or if any hedging counterparty fails to fulfill its contractual obligations or if our hedging strategies do not work as intended, fluctuating commodity prices and interest rates could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. Risk management procedures may not prevent or mitigate losses.
To the extent we have unhedged positions, if any hedging counterparty fails to fulfill its contractual obligations, or if our hedging strategies do not work as intended, fluctuating commodity prices and interest rates could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. 2025 Form 10-K | 48 Tab le of Cont ents Risk management procedures may not prevent or mitigate losses.
These changes and other market factors such as oil prices could delay or hamper the development of U.S. LNG export facilities and make LNG projects in other parts of the world more feasible and competitive with LNG projects in North America, thus increasing supply and competition for global LNG demand.
These factors could delay or hamper the development of U.S. LNG export facilities and make LNG projects in other parts of the world more feasible and competitive with LNG projects in North America, thus increasing supply and competition for global LNG demand.
In the past, Oncor has financed much of its cash needs from operations and with proceeds from indebtedness, but these sources of capital may not be adequate or available at reasonable prices or on other reasonable terms in the future, or at all.
In the past, Oncor has financed much of its cash needs from operations and with proceeds from indebtedness, but these sources of capital may not be adequate or available in a timely manner, on reasonable terms or at all.
Any such investments could be substantial, would reduce the cash available to us for other purposes, may not be recovered, and could increase our indebtedness, any of which could materially adversely affect our results of operations, financial condition, cash flows and/or prospects. Sempra could incur substantial tax liabilities if EFH’s 2016 spin-off of Vistra is deemed to be taxable.
Any such investments could be substantial, would reduce the cash available to us for other purposes, may not be recovered, and could increase our indebtedness, any of which could materially adversely affect our results of operations, financial condition, cash flows and/or prospects. 2025 Form 10-K | 61 Tab le of Cont ents Sempra could incur substantial tax liabilities if EFH’s 2016 spin-off of Vistra is deemed to be taxable.
We could experience such an event or change in circumstances from, among other things, (i) an inability to operate our existing facilities, (ii) an inability to collect from customers, (iii) changes to laws or regulations or other circumstances affecting the energy sector or our assets in Mexico, (iv) adverse rulings in lawsuits, binding arbitrations, regulatory proceedings, audits and other proceedings materially impacting our businesses, including our equity method investments such as Oncor Holdings and Cameron LNG JV, and (v) more generally any loss of permits or approvals that requires us to adjust or cease certain operations and any failure to complete or receive an adequate return on our investments in capital projects.
We could experience events or changes in circumstances from, among other things, (i) an inability to operate our existing facilities; (ii) an inability to collect from customers; (iii) changes to laws or regulations or other circumstances affecting the energy sector or our assets in Mexico; (iv) adverse rulings in lawsuits, binding arbitrations, regulatory proceedings, audits and other proceedings materially impacting our businesses and (v) more generally any loss of permits or approvals that requires us to adjust or cease certain operations and any failure to complete or receive an adequate return on our investments in capital projects.
The changes in costs and preferences for lower carbon and renewable energy sources may impact the demand for, consumption of, and type of energy we transmit and distribute. Environmental and Climate Change Regulation We are subject to extensive federal, state, regional, local and foreign statutes, orders, rules and regulations relating to climate change and environmental protection.
The changes in costs and preferences for lower carbon and renewable energy sources may impact the demand for, consumption of, and types of energy we transmit and distribute. Environmental and Climate Change Regulation We are subject to extensive federal, state, regional, local, tribal and foreign laws and regulations relating to climate change and environmental protection.
The costs and burdens associated with complying with the various legislative and regulatory requirements to which Oncor is subject at the federal, state, and local levels and adjusting Oncor’s business and operations in response to legislative and regulatory developments, including changes in ERCOT, and any fines or penalties that could result from any noncompliance, may have a material adverse effect on Oncor.
The costs and burdens of complying with the various federal, state, and local legislative and regulatory requirements applicable to Oncor and adjusting Oncor’s business and operations in response to legislative and regulatory developments, including changes in ERCOT, and any fines or penalties that could result from any noncompliance, may have a material adverse effect on Oncor.
The CPUC conducts reviews and audits of the matters under its authority and may launch 2024 Form 10-K | 53 Table of Contents investigations or open proceedings at its discretion, the results of which could include citations, disallowances, fines and penalties, as well as corrective or mitigation actions to address any noncompliance, any of which may not be sufficiently funded by customer rates or at all.
The CPUC conducts reviews and audits of the matters under its authority and may launch investigations or open proceedings at its discretion, the results of which could include citations, disallowances, fines and penalties, as well as requirements for corrective or mitigation actions to address any noncompliance, any of which may not be sufficiently funded by customer rates or at all.
Although we make significant investments in risk management, technology resiliency and information security measures for the protection of our systems and data, these measures could be insufficient or otherwise fail, particularly against attacks involving sophisticated adversaries, including nation-state actors, or outages involving key technology vendors.
Although we make significant investments in risk management, technology resiliency and cybersecurity measures for the protection of our systems and data, these measures could be insufficient or otherwise fail, particularly against unknown software flaws, insider threats, attacks involving sophisticated adversaries, including nation-state actors, or outages involving key technology vendors and systems.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management processes include: 2024 Form 10-K | 62 Table of Contents ▪ risk assessments performed by internal personnel and third-party advisors designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise information technology environments ▪ information security teams principally responsible for developing and implementing (1) cybersecurity risk assessment processes, (2) information security controls, and (3) response plans to cybersecurity incidents ▪ the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our information security controls ▪ cybersecurity awareness training and policies designed to address social engineering attacks targeting employees and contractors ▪ cybersecurity incident response plans that include procedures for responding to and reporting, if applicable, certain cybersecurity incidents ▪ risk management processes for third-party service providers, suppliers, and vendors We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect our results of operations, financial condition, cash flows and/or prospects.
Biggest changeThis does not imply that we meet any technical standards, specifications, or requirements, only that we use these standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. 2025 Form 10-K | 68 Tab le of Cont ents Our cybersecurity risk management processes include: ▪ risk assessments performed by internal personnel and third-party advisors designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise information technology environments ▪ cybersecurity teams principally responsible for developing and implementing (1) cybersecurity risk assessment processes, (2) cybersecurity controls, and (3) response plans to cybersecurity incidents ▪ the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our cybersecurity controls ▪ cybersecurity awareness training and policies designed to address social engineering attacks targeting employees and contractors ▪ cybersecurity incident response plans that include procedures for responding to and reporting, if applicable, certain cybersecurity incidents ▪ risk management processes for third-party service providers, suppliers, and vendors We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect our results of operations, financial condition, cash flows and/or prospects.
The SST Committee as well as the SDG&E and SoCalGas boards of directors oversee management’s implementation of our cybersecurity risk management processes and receive regular reports from management on our material cybersecurity risks. In addition, management updates the SST Committee and SDG&E and SoCalGas boards of directors about certain cybersecurity incidents.
The SST Committee as well as the SDG&E and SoCalGas boards of directors oversee management’s implementation of our cybersecurity risk management processes and receive regular reports from management on our material cybersecurity risks. In addition, as needed, management updates the SST Committee and SDG&E and SoCalGas boards of directors about certain cybersecurity incidents.
The SDG&E and SoCalGas boards of directors receive briefings from SDG&E’s and SoCalGas’ chief information officer and internal information security staff. SDG&E’s and SoCalGas’ boards of directors also have safety committees that, at times, may oversee the matters described above on behalf of those companies’ respective boards of directors.
The SDG&E and SoCalGas boards of directors receive briefings from SDG&E’s and SoCalGas’ chief information officer and internal information technology and cybersecurity leadership. SDG&E’s and SoCalGas’ boards of directors also have safety committees that, at times, may oversee the matters described above on behalf of those companies’ respective boards of directors.
We have formed cybersecurity councils to provide overall corporate oversight for managing material risks from cybersecurity threats. The cybersecurity councils meet regularly to receive updates on cybersecurity developments at Sempra and our consolidated entities from their cybersecurity management teams.
We have formed cybersecurity councils to provide overall corporate oversight for managing material risks from cybersecurity threats. The cybersecurity councils meet regularly to receive updates on cybersecurity developments at Sempra and our consolidated entities from their cybersecurity management teams. Our cybersecurity management teams supervise efforts designed to prevent, detect, mitigate, and remediate cybersecurity risks and incidents.
Some of these members hold relevant degrees and certifications that we believe enhance our ability to manage and respond to cybersecurity risks, including, among others, bachelor’s and/or master’s degrees in cybersecurity and computer science as well as certified information systems security professional, certified incident handler, and certified information security manager certifications. 2024 Form 10-K | 63 Table of Contents
Some of these professionals hold relevant degrees and certifications that we believe enhance our ability to manage and respond to cybersecurity risks, including, among others, bachelor’s and/or master’s degrees in cybersecurity and computer science as well as certified information systems security professional, certified incident handler, and certified information security manager certifications. 2025 Form 10-K | 69 Tab le of Cont ents
The cybersecurity councils, cybersecurity management teams and materiality assessment teams include members with decades of operational experience as cybersecurity professionals as well as management with decades of service in the areas of information and operational technology and legal, compliance, financial reporting and enterprise risk management.
The cybersecurity management teams, cybersecurity councils and materiality assessment teams include professionals with decades of experience in their respective fields of cybersecurity, information and operational technology, legal, compliance, financial reporting and enterprise risk management.
The SST Committee reports to the Sempra board of directors regarding the Committee’s activities, including those related to cybersecurity. The SST Committee receives briefings on cybersecurity topics from Sempra’s chief information security officer, internal information security staff or external experts in part for continuing education on topics that impact public companies.
The SST Committee receives briefings on cybersecurity topics from Sempra’s chief information security officer, internal information technology leadership or external experts in part for continuing education on topics that impact public companies.
CYBERSECURITY GOVERNANCE Sempra’s, SDG&E’s and SoCalGas’ respective boards of directors consider cybersecurity risk as part of their risk oversight function. The Sempra board of directors has delegated to its SST Committee, which is entirely composed of independent directors under the independence standards established by the NYSE, oversight of cybersecurity and other information and operational technology risks.
CYBERSECURITY GOVERNANCE Sempra’s, SDG&E’s and SoCalGas’ respective boards of directors consider cybersecurity risk as part of their risk oversight function. The Sempra board of directors has delegated to its SST Committee oversight of cybersecurity and other information and operational technology risks. The SST Committee reports to the Sempra board of directors regarding the Committee’s activities, including those related to cybersecurity.
Our cybersecurity materiality assessment teams, which include chief information security officers, chief information officers, chief risk officers, chief accounting officers or chief financial officers, and general counsels, help assess the materiality of certain cybersecurity incidents.
Sempra’s director of cybersecurity governance & chief information security officer provides additional oversight and support for the operational cybersecurity activities at our consolidated entities. Our cybersecurity materiality assessment teams, which include chief information security officers, chief information officers, chief accounting officers or chief financial officers, and general counsels, help assess the materiality of certain cybersecurity incidents.
Our cybersecurity management teams supervise efforts designed to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal information security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by information security tools deployed in the information technology environment.
The cybersecurity management teams receive intelligence on emerging cybersecurity threats through various means, including internal cybersecurity personnel; governmental, public and private sources; subject matter experts and consultants; and cybersecurity tools deployed in the environment. Cybersecurity management also supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
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This does not imply that we meet any technical standards, specifications, or requirements, only that we use these standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
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Cybersecurity management also supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Sempra’s director of cybersecurity governance & chief information security officer provides additional oversight and support for the operational cybersecurity activities at our consolidated entities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeLEGAL PROCEEDINGS We are not party to, and our property is not the subject of, any material pending legal proceedings (other than ordinary routine litigation incidental to our businesses), including environmental proceedings described in Item 103(c)(3) of SEC Regulation S-K, except for the matters described in Note 15 of the Notes to Consolidated Financial Statements or referred to in “Part I – Item 1A.
Biggest changeLEGAL PROCEEDINGS We are not party to, and our property is not the subject of, any material pending legal proceedings (other than ordinary routine litigation incidental to our businesses), including environmental proceedings described in Item 103(c)(3) of SEC Regulation S-K, except for the matters described in Note 16 of the Notes to Consolidated Financial Statements or referred to in “Part I – Item 1A.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSoCalGas and SDG&E Common Stock Information concerning dividend declarations for SoCalGas and SDG&E is included in “Part II – Item 7.
Biggest changeInformation concerning dividend declarations for Sempra is included in “Part II – Item 7. MD&A – Capital Resources and Liquidity – Sources and Uses of Cash – Dividends.” SoCalGas and SDG&E Common Stock Information concerning dividend declarations for SoCalGas and SDG&E is included in “Part II – Item 7.
This repurchase authorization was publicly announced on August 5, 2020 and has no expiration date. As of February 25, 2025, a maximum of $1.25 billion and no more than 19,632,529 shares may yet be purchased under this repurchase authorization.
This repurchase authorization was publicly announced on August 5, 2020 and has no expiration date. As of February 26, 2026, a maximum of $1.25 billion and no more than 19,632,529 shares may yet be purchased under this repurchase authorization.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Sempra Common Stock Our common stock is traded on the NYSE under the trading symbol SRE. At February 19, 2025, there were approximately 19,241 record holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Sempra Common Stock Our common stock is traded on the NYSE under the trading symbol SRE. At February 19, 2026, there were approximately 18,180 record holders of our common stock.
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Information concerning dividend declarations for Sempra is included in “Part II – Item 7.
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MD&A – Capital Resources and Liquidity – Sources and Uses of Cash – Dividends.” Market for Sempra’s Common Stock Sempra’s common stock began trading on the Mexican Stock Exchange under the trading symbol SRE.MX in May 2021 following an exchange offer launched in the U.S. and Mexico to acquire the then publicly owned shares of IEnova for newly issued shares of our common stock.
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In November 2024, the CNBV approved our application to cross-list our common stock on the International Quotation System (SIC) of the Mexican Stock Exchange and delist our common stock from the general listing of the Mexican Stock Exchange.
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Our common stock is no longer quoted or traded on the general listing of the Mexican Stock Exchange or subject to applicable reporting requirements as of December 13, 2024, but remains eligible for trading by Mexican investors on the SIC effective December 16, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn 2024 compared to 2023, the increase in earnings of $99 million (6%) to $1.8 billion was primarily due to: ▪ $217 million higher income tax benefits primarily from flow-through items, including higher gas repairs tax benefits, offset by $25 million related to income tax benefits in 2023 from previously unrecognized income tax benefits pertaining to gas repairs expenditures ▪ $12 million higher electric transmission margin ▪ $12 million higher AFUDC equity ▪ $11 million higher net regulatory interest income ▪ $9 million higher CPUC base operating margin authorized for 2024, net of operating expenses, including higher authorized cost of capital Offset by: ▪ $89 million charge in 2024 for amounts relating to the FERC order finding that the TO5 adder refund provision has been triggered, requiring SDG&E to refund customers the California ISO adder retroactively from June 1, 2019, which we discuss in Note 4 of the Notes to Consolidated Financial Statements ▪ $60 million higher net interest expense ▪ $15 million impairment from disallowed capital costs in the 2024 GRC FD Sempra Texas Utilities In 2024 compared to 2023, the increase in earnings of $87 million (13%) to $781 million was primarily due to higher equity earnings from Oncor Holdings driven by: ▪ overall higher revenues primarily attributable to: ◦ rate updates to reflect increases in invested capital ◦ updates to transmission billing units ◦ customer growth ◦ base rates implemented in May 2023 Offset by: ◦ lower customer consumption primarily attributable to weather ▪ write-off of rate base disallowances in 2023 resulting from the PUCT’s final order in Oncor’s comprehensive base rate review Offset by: ▪ higher interest expense and depreciation expense attributable to increases in invested capital ▪ higher O&M 2024 Form 10-K | 68 Table of Contents Sempra Infrastructure In 2024 compared to 2023, the increase in earnings of $34 million (4%) to $911 million was primarily due to: ▪ $499 million favorable impact from foreign currency and inflation effects on our monetary positions in Mexico, comprised of a $263 million favorable impact in 2024 compared to a $236 million unfavorable impact in 2023 ▪ $61 million favorable impact from $19 million net interest income in 2024 compared to $42 million net interest expense in 2023 primarily due to higher capitalization of interest expense in 2024 from projects under construction ▪ $47 million favorable impact in interest expense from $30 million unrealized gains in 2024 compared to $17 million unrealized losses in 2023 on interest rate swaps related to the PA LNG Phase 1 project ▪ $21 million favorable impact from $20 million income tax benefit in 2024 compared to $1 million income tax expense in 2023 primarily from outside basis differences and remeasurement of deferred taxes Offset by: ▪ $463 million from asset and supply optimization driven by unrealized losses in 2024 compared to unrealized gains in 2023 on commodity derivatives due to changes in natural gas prices and lower LNG diversion fees ▪ $79 million from the transportation business driven by lower equity earnings and revenues, including the cumulative impact of new tariffs going into effect in June 2023 for certain pipelines in Mexico and a customer’s early termination of firm transportation agreements in 2023 ▪ $15 million from the renewables business driven by lower volumes from wind power generation assets ▪ $14 million from lower revenues in 2024 offset by higher O&M in 2023 from a provision for expected credit losses on a customer’s past due receivable balance Parent and Other In 2024 compared to 2023, the increase in losses of $433 million to $721 million was primarily due to: ▪ $330 million income tax expense in 2024 from changes to a valuation allowance against foreign tax credits that were carried forward from the implementation of the Tax Cuts and Jobs Act of 2017 ▪ $32 million from higher net interest expense ▪ $24 million decrease in equity earnings related to our investment in RBS Sempra Commodities LLP due to $16 million in 2024 from the substantial dissolution of the partnership and $40 million in 2023 related to a legal settlement, which we discuss in Notes 5 and 15 of the Notes to Consolidated Financial Statements ▪ $23 million income tax benefit in 2023 from the remeasurement of certain deferred income taxes ▪ $5 million related to settlement charges from our non-qualified pension plan in 2024 SIGNIFICANT CHANGES IN REVENUES AND COSTS The regulatory framework permits SDG&E and SoCalGas to recover certain program expenditures and other costs authorized by the CPUC (referred to as “refundable programs”).
Biggest changeIn 2025 compared to 2024, the decrease in earnings of $418 million (23%) was primarily due to: ▪ $432 million charge in 2025 from regulatory disallowances related to 2019 through 2024 associated with the 2024 GRC Track 2 FD, which we discuss in Note 4 of the Notes to Consolidated Financial Statements ▪ $159 million lower income tax benefits primarily from flow-through items, including gas repairs tax benefits, offset by impacts from the election to accelerate self-developed software deductions and the resolution of prior year income tax items ▪ $63 million higher net interest expense ▪ $25 million charge in 2025 from disallowed regulatory recovery of COVID-19 costs Offset by: ▪ $148 million higher CPUC base operating margin, net of operating expenses including higher depreciation, $44 million lower authorized cost of capital and a $32 million charge from regulatory disallowances associated with the 2024 GRC Track 2 FD related to 2025 ▪ $89 million charge in 2024 for amounts relating to the FERC order finding that the TO5 adder refund provision has been triggered, requiring SDG&E to refund customers the California ISO adder retroactively from June 1, 2019 ▪ $15 million impairment in 2024 from disallowed capital costs in the 2024 GRC FD Sempra Texas Utilities In 2025 compared to 2024, the increase in earnings of $80 million (10%) was primarily due to higher equity earnings from Oncor Holdings driven by: ▪ overall higher revenues primarily attributable to: ◦ the establishment of the UTM ◦ rate updates to reflect increases in invested capital ◦ customer growth ◦ higher annual energy efficiency program performance bonus Offset by: ▪ higher interest expense and depreciation expense associated with increases in invested capital ▪ higher O&M Sempra Infrastructure In 2025 compared to 2024, losses were $160 million compared to earnings of $911 million primarily due to: ▪ $703 million income tax expense in 2025 as a result of management’s decision to classify SI Partners and Ecogas as held for sale, comprised of the following: ◦ $693 million income tax expense to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners ◦ $10 million income tax expense due to the recognition of a deferred tax liability on our outside basis difference in Ecogas ▪ $445 million unfavorable impact from foreign currency and inflation effects on our monetary positions in Mexico, comprised of a $181 million unfavorable impact in 2025 compared to a $264 million favorable impact in 2024 ▪ $43 million lower income tax benefit primarily from outside basis differences and the remeasurement of certain deferred income taxes ▪ $30 million unfavorable impact in interest expense from unrealized gains in 2024 on interest rate swaps related to the PA LNG Phase 1 project ▪ $27 million unfavorable impact related to a customer’s early termination of firm transportation agreements, including interest expense 2025 Form 10-K | 74 Tab le of Cont ents ▪ $21 million from TdM driven by lower volumes and lower power prices and unrealized losses in 2025 compared to unrealized gains in 2024 on commodity derivatives due to changes in power prices Offset by: ▪ $52 million from asset and supply optimization driven by higher optimization of transport and storage contracts, higher LNG diversion fees and lower unrealized losses on commodity derivatives due to changes in natural gas prices ▪ $38 million lower O&M in 2025 primarily from lower provisions for expected credit losses ▪ $37 million lower depreciation expense as a result of management's decision to classify SI Partners and Ecogas as held for sale ▪ $31 million higher revenues driven by satisfaction of performance obligations related to customer payments received in advance from a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025 ▪ $13 million higher net interest income primarily from a change in the fair value of the Support Agreement Parent and Other In 2025 compared to 2024, the decrease in losses of $388 million was primarily due to: ▪ $252 million from $78 million income tax expense in 2025 compared to $330 million income tax expense in 2024 from changes to a valuation allowance against foreign tax credits that were carried forward from the implementation of the TCJA ▪ $191 million net income tax benefit in 2025 from changes to a valuation allowance against certain tax credit carryforwards offset by changes in state income tax apportionment as a result of management’s decision to classify SI Partners as held for sale ▪ $22 million income tax benefit in 2025 from the impacts of the OBBBA ▪ $19 million higher net investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan ▪ $15 million lower preferred dividends Offset by: ▪ $92 million higher net interest expense ▪ $16 million equity earnings in 2024 related to our investment in RBS Sempra Commodities LLP from the substantial dissolution of the partnership ▪ $11 million preferred deemed dividends related to the redemption of series C preferred stock in 2025 SIGNIFICANT CHANGES IN REVENUES AND COSTS The regulatory framework permits SDG&E and SoCalGas to recover certain program expenditures and other costs authorized by the CPUC (referred to as “refundable programs”), which may be subject to reviews for reasonableness.
If cash flows from operations were to be significantly reduced or we were unable to borrow or obtain other financing under acceptable terms, we would likely first reduce or postpone discretionary capital expenditures (not related to safety/reliability) and investments in new businesses.
If cash flows from operations were to be significantly reduced or we were unable to borrow or obtain other financing under acceptable terms, we would likely first reduce or postpone discretionary capital expenditures (not related to safety or reliability) and investments in new businesses.
FERC Rate Matters SDG&E files separately with the FERC for its authorized transmission revenue requirement and ROE on FERC-regulated electric transmission operations and assets. SDG&E’s authorized TO5 settlement provided for an ROE of 10.60%, consisting of a base ROE of 10.10% plus the California ISO adder.
FERC Rate Matters SDG&E files separately with the FERC for its authorized transmission revenue requirement and ROE on FERC-regulated electric transmission operations and assets. TO5 Settlement. SDG&E’s authorized TO5 settlement provided for an ROE of 10.60%, consisting of a base ROE of 10.10% plus the California ISO adder.
All declarations of dividends on our common stock and preferred stock are made at the discretion of the board of directors. While we view dividends as an integral component of shareholder return, the amount of future dividends will depend on earnings, cash flows, financial and legal requirements, and other relevant factors at that time.
All declarations of dividends on our common stock are made at the discretion of the board of directors. While we view dividends as an integral component of shareholder return, the amount of future dividends will depend on earnings, cash flows, financial and legal requirements, and other relevant factors at that time.
In November 2024, we established an ATM program providing for the offer and sale of shares of Sempra common stock having an aggregate gross sales price of up to $3.0 billion through agents acting as our sales agents or as forward sellers or directly to the agents as principals.
ATM Program and Forward Sales Agreements In November 2024, we established an ATM program providing for the offer and sale of shares of Sempra common stock having an aggregate gross sales price of up to $3.0 billion through agents acting as our sales agents or as forward sellers or directly to the agents as principals.
Expansion of the Cameron LNG Phase 1 facility beyond the first three trains is subject to certain restrictions and conditions under the JV project financing agreements, including among others, scope restrictions on expansion of the project unless appropriate prior consent is obtained from the existing project lenders.
Expansion of the Cameron LNG Phase 1 facility beyond the first three trains is also subject to certain restrictions and conditions under the JV project financing agreements, including, among others, scope restrictions on expansion of the project unless appropriate prior consent is obtained from the existing project lenders.
Entergy Louisiana, LLC, a subsidiary of Entergy Corporation, and Cameron LNG JV have an electricity service agreement (and related ancillary agreements) for the supply to Cameron LNG JV of up to 950 MW of power from new renewable sources in Louisiana.
Entergy Louisiana, LLC, a subsidiary of Entergy Corporation, and Cameron LNG JV have an electricity service agreement (and related ancillary agreements) for the supply to Cameron LNG JV of up to 950 MW of power from renewable sources in Louisiana.
Sempra has the following three reportable segments which reflect how the CODM oversees operational and financial performance: ▪ Sempra California ▪ Sempra Texas Utilities ▪ Sempra Infrastructure SDG&E and SoCalGas each has one reportable segment.
Sempra has the following three reportable segments which reflect how the CODM oversees operational and financial performance: ▪ Sempra California ▪ Sempra Texas Utilities ▪ Sempra Infrastructure SDG&E and SoCalGas each have one reportable segment.
Oncor’s senior secured debt was rated A2, A+ and A at Moody’s, S&P and Fitch, respectively, at December 31, 2024. Sempra, SDG&E and SoCalGas have committed lines of credit to provide liquidity and to support commercial paper. Borrowings under these facilities bear interest at benchmark rates plus a margin that varies with market index rates and each borrower’s credit rating.
Oncor’s senior secured debt was rated A2, A and A at Moody’s, S&P and Fitch, respectively, at December 31, 2025. Sempra, SDG&E and SoCalGas have committed lines of credit to provide liquidity and to support commercial paper. Borrowings under these facilities bear interest at benchmark rates plus a margin that varies with market index rates and each borrower’s credit rating.
As we discuss in Note 12 of the Notes to the Consolidated Financial Statements, SI Partners and ConocoPhillips have provided guarantees relating to their respective affiliate’s commitment to make its pro rata equity share of capital contributions to fund 110% of the development budget of the PA LNG Phase 1 project, in an aggregate amount of up to $9.0 billion.
As we discuss in Note 13 of the Notes to Consolidated Financial Statements, SI Partners and ConocoPhillips have provided guarantees relating to their respective affiliate’s commitment to make its pro rata equity share of capital contributions to fund 110% of the development budget of the PA LNG Phase 1 project, in an aggregate amount of up to $9.0 billion.
We provide additional detail in Note 14 of the Notes to Consolidated Financial Statements. IMPAIRMENT TESTING OF LONG-LIVED ASSETS Sempra Whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable, we consider if the estimated future undiscounted cash flows are less than the carrying amount of the asset.
We provide additional detail in Note 15 of the Notes to Consolidated Financial Statements. IMPAIRMENT TESTING OF LONG-LIVED ASSETS Sempra Whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable, we consider if the estimated future undiscounted cash flows are less than the carrying amount of the asset.
We provide details of our pension and PBOP plans in Note 8 of the Notes to Consolidated Financial Statements. SONGS ASSET RETIREMENT OBLIGATIONS Sempra, SDG&E SDG&E’s legal AROs related to the decommissioning of SONGS are estimated based on a site-specific study performed no less than every three years.
We provide details of our pension and PBOP plans in Note 9 of the Notes to Consolidated Financial Statements. SONGS ASSET RETIREMENT OBLIGATIONS Sempra, SDG&E SDG&E’s legal AROs related to the decommissioning of SONGS are estimated based on a site-specific study performed no less than every three years.
The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial condition and cash flows. We discuss these matters and additional information related to accounting for income taxes, including uncertainty in income taxes, in Note 7 of the Notes to Consolidated Financial Statements.
The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial condition and cash flows. We discuss these matters and additional information related to accounting for income taxes, including uncertainty in income taxes, in Note 8 of the Notes to Consolidated Financial Statements.
In the event that Oncor fails to meet its capital requirements, access sufficient capital, or raise capital on favorable terms to finance its ongoing needs, we may elect to make additional capital contributions to Oncor (as our commitments to the PUCT prohibit us from making loans to Oncor), which could be substantial and reduce the cash available to us for other purposes, increase our indebtedness and ultimately materially adversely affect our results of operations, financial condition, cash flows and/or prospects.
In the event that Oncor is unable to meet its capital requirements, access sufficient capital, or raise capital on favorable terms to finance its ongoing needs, we may elect to make additional capital contributions to Oncor (as our commitments to the PUCT prohibit us from making loans to Oncor), which could be substantial and reduce the cash available to us for other purposes, increase our indebtedness and ultimately materially adversely affect our results of operations, financial condition, cash flows and/or prospects.
SI Partners’ guarantee covers 70% of this amount plus enforcement costs of its guarantee. As of December 31, 2024, an aggregate amount of $2.7 billion has been paid by SI Partners’ subsidiary in satisfaction of its commitment to fund its portion of the development budget of the PA LNG Phase 1 project.
SI Partners’ guarantee covers 70% of this amount plus enforcement costs of its guarantee. As of December 31, 2025, an aggregate amount of $2.7 billion has been paid by SI Partners’ subsidiary in satisfaction of its commitment to fund its portion of the development budget of the PA LNG Phase 1 project.
We discuss SDG&E’s NDT and its expected SONGS decommissioning payments in Note 14 of the Notes to Consolidated Financial Statements. Off-Balance Sheet Arrangements SDG&E has entered into PPAs and tolling agreements that are variable interests in unconsolidated entities. We discuss variable interests in Note 1 of the Notes to Consolidated Financial Statements.
We discuss SDG&E’s NDT and its expected SONGS decommissioning payments in Note 15 of the Notes to Consolidated Financial Statements. Off-Balance Sheet Arrangements SDG&E has entered into PPAs and tolling agreements that are variable interests in unconsolidated entities. We discuss variable interests in Note 1 of the Notes to Consolidated Financial Statements.
The following tables summarize the impact to our projected benefit obligation for pension and accumulated benefit obligation for PBOP at December 31, 2024, and 2024 net periodic benefit costs, in each case if the discount rate or expected return on plan assets were changed by 1%.
The following tables summarize the impact to our projected benefit obligation for pension and accumulated benefit obligation for PBOP at December 31, 2025, and 2025 net periodic benefit costs, in each case if the discount rate or expected return on plan assets were changed by 1%.
At December 31, 2024, SDG&E expects to make interest payments on long-term debt totaling $6.7 billion, of which $400 million is expected to be paid in 2025 and $6.3 billion is expected to be paid in subsequent years through 2054.
At December 31, 2025, SDG&E expects to make interest payments on long-term debt totaling $6.7 billion, of which $400 million is expected to be paid in 2026 and $6.3 billion is expected to be paid in subsequent years through 2054.
We discuss herein Sempra’s results of operations and significant changes in earnings, revenues and costs by segment, as well as Parent and other, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We discuss herein Sempra’s results of operations and significant changes in earnings, revenues and costs by segment, as well as Parent and other, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
For a discussion of SDG&E’s results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to “ Part II – Item 7.
For a discussion of SDG&E’s results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to “ Part II – Item 7.
For a discussion of our results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to “ Part II – Item 7.
For a discussion of our results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to “ Part II – Item 7.
For a discussion of SoCalGas’ results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to “ Part II – Item 7.
For a discussion of SoCalGas’ results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to “ Part II – Item 7.
SDG&E recognizes a regulatory asset, or liability, to the extent that its SONGS ARO exceeds, or is less than, the amount collected from customers and the amount earned in SDG&E’s NDT. SDG&E’s ARO related to the decommissioning of SONGS was $471 million as of December 31, 2024, based on the decommissioning cost study prepared in 2024.
SDG&E recognizes a regulatory asset, or liability, to the extent that its SONGS ARO exceeds, or is less than, the amount collected from customers and the amount earned in SDG&E’s NDT. SDG&E’s ARO related to the decommissioning of SONGS was $446 million as of December 31, 2025, based on the decommissioning cost study prepared in 2024.
Our businesses invest in, develop and operate energy infrastructure, and provide electric and gas services to customers. ▪ SDG&E is a regulated public utility that provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County. ▪ SoCalGas is a regulated public natural gas distribution utility, serving customers throughout most of Southern California and part of central California.
Our businesses invest in and operate electric and gas utilities and other energy infrastructure that provide energy services to customers. ▪ SDG&E is a regulated public utility that provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County. ▪ SoCalGas is a regulated public natural gas distribution utility, serving customers throughout most of Southern California and part of central California.
An unfavorable outcome with respect to any of these factors could have a material adverse effect on (i) the development and construction of the applicable project, including a potential impairment of all or a substantial portion of the capital costs invested in the project to date, which could be material, and (ii) for any project that has reached a positive final investment decision, Sempra’s results of operations, financial condition, cash flows and/or prospects.
An unfavorable outcome with respect to any of these factors could have a material adverse effect on (i) the development and construction of the applicable project, including a potential impairment of all or a substantial portion of the capital costs invested in the project to date, which could be material, and (ii) for any project that has reached a positive FID, Sempra’s results of operations, financial condition, cash flows and/or prospects.
Our level of capital expenditures for PP&E and investments in the next few years may vary substantially and will depend on, among other things, the cost and availability of financing, regulatory approvals, changes in tax law and business opportunities providing desirable rates of return, among various other factors described in this MD&A and in “Part I – Item 1A.
Our level of capital expenditures for PP&E and investments in the next few years may differ substantially from our estimates and will depend on, among other things, the cost and availability of financing, regulatory approvals, changes in tax law and business opportunities providing desirable rates of return, among various other factors described in this MD&A and in “Part I – Item 1A.
Although we expect to settle the forward sale agreement entirely by the physical delivery of shares of our common stock in exchange for cash proceeds, we may, subject to certain conditions, elect cash settlement or net share settlement for all or a portion of our obligations under the forward sale agreement.
Although we may settle the forward sale agreements entirely by the physical delivery of shares of our common stock in exchange for cash proceeds, we may, subject to certain conditions, elect cash settlement or net share settlement for all or a portion of our obligations under the forward sale agreements.
ECA LNG Phase 1 is constructing a one-train natural gas liquefaction facility at the site of Sempra Infrastructure’s existing ECA Regas Facility with a nameplate capacity of 3.25 Mtpa and an initial offtake capacity of 2.5 Mtpa. We do not expect the construction or operation of the ECA LNG Phase 1 project to disrupt operations at the ECA Regas Facility.
ECA LNG Phase 1 is constructing a one-train natural gas liquefaction facility at the site of SI Partners’ existing ECA Regas Facility with a nameplate capacity of 3.25 Mtpa and an initial offtake capacity of 2.5 Mtpa. We do not expect the construction or operation of the ECA LNG Phase 1 project to disrupt operations at the ECA Regas Facility.
We expect the weighted-average rate base to continue to increase in 2025 based on our expected capital investments. For Oncor, rate base represents the total invested capital, as adjusted in accordance with PUCT rules, at the end of the previous calendar year as reported in the Earnings Monitoring Report filed with the PUCT on an annual basis.
We expect the weighted-average rate base to continue to increase in 2026 and beyond based on our expected capital investments. For Oncor, rate base represents the total invested capital, as adjusted in accordance with PUCT rules, at the end of the previous calendar year as reported in the Earnings Monitoring Report filed with the PUCT on an annual basis.
Periodically, we review our construction, investment and financing programs and revise them in response to changes in regulation, economic conditions, competition, customer growth, inflation, customer rates, the cost and availability of capital, and safety and environmental requirements.
Periodically, we review our construction, investment and financing programs and revise them in response to changes in regulation, economic conditions, competition, customer growth, inflation, customer rates, the cost and availability of capital, safety and environmental requirements, and other relevant factors.
The critical assumptions used to develop the required estimates include the following key factors: ▪ discount rates ▪ expected return on plan assets ▪ health care cost trend rates ▪ interest crediting rate on cash balance accounts ▪ mortality rate ▪ rate of compensation increases ▪ termination and retirement rates 2024 Form 10-K | 102 Table of Contents ▪ utilization of postretirement welfare benefits ▪ payout elections (lump sum or annuity) ▪ lump sum interest rates The actuarial assumptions we use may differ materially from actual results due to: ▪ return on plan assets ▪ changing market and economic conditions ▪ higher or lower withdrawal rates ▪ longer or shorter participant life spans ▪ more or fewer lump sum versus annuity payout elections made by plan participants ▪ higher or lower retirement rates Changes in the estimated costs or timing of pension and PBOP, or the assumptions and judgments used by management underlying these estimates (primarily the discount rate and expected return on plan assets), as well as changes in the circumstances associated with rate recovery, could have a material effect on the recorded expenses and liabilities.
The critical assumptions used to develop the required estimates include the following key factors: ▪ discount rates ▪ expected return on plan assets ▪ health care cost trend rates ▪ interest crediting rate on cash balance accounts ▪ mortality rate ▪ rate of compensation increases ▪ termination and retirement rates ▪ utilization of postretirement welfare benefits ▪ payout elections (lump sum or annuity) ▪ lump sum interest rates The actuarial assumptions we use may differ materially from actual results due to: ▪ return on plan assets ▪ changing market and economic conditions ▪ higher or lower withdrawal rates ▪ longer or shorter participant life spans ▪ more or fewer lump sum versus annuity payout elections made by plan participants ▪ higher or lower retirement rates 2025 Form 10-K | 109 Tab le of Cont ents Changes in the estimated costs or timing of pension and PBOP, or the assumptions and judgments used by management underlying these estimates (primarily the discount rate and expected return on plan assets), as well as changes in the circumstances associated with rate recovery, could have a material effect on the recorded expenses and liabilities.
For a discussion of our sources and uses of cash for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to “ Part II – Item 7. MD&A – Sources and Uses of Cash ” in our 2023 annual report on Form 10-K filed with the SEC on February 27, 2024.
For a discussion of our sources and uses of cash for the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to “ Part II – Item 7. MD&A – Sources and Uses of Cash ” in our 2024 annual report on Form 10-K filed with the SEC on February 25, 2025.
The increase in rate base reflects the significant capital investments that Oncor has made in its transmission and distribution system, and we expect rate base to continue to increase in 2025 based on Oncor’s expected capital investments.
The increase in rate base reflects the significant capital investments that Oncor has made in its transmission and distribution system, and we expect rate base to continue to increase in 2026 and beyond based on Oncor’s expected capital investments.
As a result, Sempra’s dividends on common stock and preferred stock declared on a historical basis may not be indicative of future declarations. SDG&E In 2024, 2023 and 2022, SDG&E paid common stock dividends to Enova Corporation and Enova Corporation paid corresponding dividends to Sempra of $225 million, $100 million and $100 million, respectively.
As a result, Sempra’s dividends on common stock declared on a historical basis may not be indicative of future declarations. SDG&E In 2025, 2024 and 2023, SDG&E paid common stock dividends to Enova Corporation and Enova Corporation paid corresponding dividends to Sempra of $200 million, $225 million and $100 million, respectively.
These arrangements do not commit any party to enter into definitive agreements or otherwise participate in the applicable project, and the ultimate participation by the parties remains subject to negotiation and finalization of definitive agreements, among other factors. LNG Cameron LNG Phase 2 Project.
These arrangements do not commit any party to enter into definitive agreements or otherwise participate in the applicable project, and the ultimate participation by the parties remains subject to negotiation and finalization of definitive agreements, among other factors.
At December 31, 2024, Sempra Infrastructure had $401 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if Sempra Infrastructure is unable to re-route a portion of the pipeline and resume operations or if Sempra Infrastructure terminates the contract and is unable to obtain recovery, which in each case could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
At December 31, 2025, Sempra Infrastructure had $389 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if, among other things, Sempra Infrastructure is unable to re-route a portion of the pipeline and resume operations or if Sempra Infrastructure terminates the contract and is unable to obtain recovery, which in each case could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
With respect to the ECA LNG Phase 1 and Phase 2 projects, recent and proposed changes to the Mexican Constitution and certain laws in Mexico and an unfavorable resolution of land disputes and permit challenges, in each case that we discuss in Note 15 of the Notes to Consolidated Financial Statements, could have a material adverse effect on the development and construction of these projects.
With respect to the ECA LNG Phase 1 project and the ECA LNG Phase 2 project that we discuss below, recent and proposed changes to the Mexican Constitution and certain laws in Mexico and an unfavorable resolution of a land dispute and permit challenges, in each case that we discuss in Note 16 of the Notes to Consolidated Financial Statements, could have a material adverse effect on the development and construction of these projects.
MD&A – Results of Operations ” in our 2023 annual report on Form 10-K filed with the SEC on February 27, 2024. We also discuss herein the impact of foreign currency and inflation rates on Sempra’s results of operations.
MD&A – Results of Operations ” in our 2024 annual report on Form 10-K filed with the SEC on February 25, 2025. We also discuss herein the impact of foreign currency and inflation rates on Sempra’s results of operations.
SDG&E and SoCalGas assess probabilities of future rate recovery associated with regulatory account balances at the end of each reporting period and whenever new and/or unusual events occur, such as: ▪ changes in the regulatory and political environment or the utility’s competitive position ▪ issuance of a regulatory commission order ▪ passage of new legislation 2024 Form 10-K | 101 Table of Contents To the extent that circumstances associated with regulatory balances change, the regulatory balances are evaluated and adjusted if appropriate.
SDG&E and SoCalGas assess probabilities of future rate recovery associated with regulatory account balances at the end of each reporting period and whenever new and/or unusual events occur, such as: ▪ changes in the regulatory and political environment or the utility’s competitive position ▪ issuance of a regulatory commission order ▪ passage of new legislation To the extent that circumstances associated with regulatory balances change, the regulatory balances are evaluated and adjusted if appropriate.
Accordingly, in October 2024, SDG&E submitted its TO6 filing to the FERC, requested to be effective January 1, 2025, and subject to refund. SDG&E’s TO6 filing proposes, among other items, an increase to SDG&E’s currently authorized base ROE from 10.10% to 11.75% plus the California ISO adder, for a total ROE of 12.25%.
In October 2024, SDG&E submitted its TO6 filing to the FERC and requested it to be effective January 1, 2025. SDG&E’s TO6 filing proposed, among other items, an increase to SDG&E’s currently authorized base ROE from 10.10% to 11.75% plus the California ISO adder, for a total ROE of 12.25%.
The estimate of the obligations includes: ▪ estimated decommissioning costs, including labor, equipment, material and other disposal costs ▪ inflation adjustment applied to estimated cash flows ▪ discount rate based on a credit-adjusted risk-free rate ▪ actual decommissioning costs, progress to date and expected duration of decommissioning activities 2024 Form 10-K | 103 Table of Contents SDG&E’s nuclear decommissioning expenses are subject to rate recovery and, therefore, rate-making accounting treatment is applied to SDG&E’s nuclear decommissioning activities.
The estimate of the obligations includes: ▪ estimated decommissioning costs, including labor, equipment, material and other disposal costs ▪ inflation adjustment applied to estimated cash flows ▪ discount rate based on a credit-adjusted risk-free rate ▪ actual decommissioning costs, progress to date and expected duration of decommissioning activities SDG&E’s nuclear decommissioning expenses are subject to rate recovery and, therefore, rate-making accounting treatment is applied to SDG&E’s nuclear decommissioning activities.
We have an EPC contract with Bechtel to construct the PA LNG Phase 1 project, which has an estimated price of approximately $10.7 billion. We estimate the capital expenditures for the PA LNG Phase 1 project will be approximately $13 billion including capitalized interest at the project level and project contingency.
We have an EPC contract with Bechtel to construct the PA LNG Phase 1 project, which has an estimated price of approximately $10.8 billion, with capital expenditures for the project of approximately $13 billion including capitalized interest at the project level and project contingency.
SDG&E and SoCalGas expect that the available unused funds from their credit facilities described above, which also supports their commercial paper programs, cash flows from operations, and other incurrences of debt including issuing debt securities and 2024 Form 10-K | 85 Table of Contents obtaining term loans will continue to be adequate to fund their respective current operations and planned capital expenditures.
SDG&E and SoCalGas expect that the available unused funds from their credit facilities described above, which also supports their commercial paper programs, cash flows from operations, and other incurrences of debt including issuing debt securities and obtaining term loans will continue to be adequate to fund their respective current operations and planned capital expenditures.
IMPACT OF FOREIGN CURRENCY AND INFLATION RATES ON RESULTS OF OPERATIONS Because our natural gas distribution utility in Mexico, Ecogas, uses its local currency as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period for consolidation in Sempra’s results of operations.
IMPACT OF FOREIGN CURRENCY AND INFLATION RATES ON RESULTS OF OPERATIONS Because Ecogas, our natural gas distribution utility in Mexico, uses the Mexican peso as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period when included in Sempra’s results of operations.
We discuss critical accounting estimates that are material to our financial statements with the Audit Committee of Sempra’s board of directors.
We discuss these critical accounting estimates, which are material to our financial statements with the Audit Committee of Sempra’s board of directors.
Sempra Infrastructure is constructing a natural gas liquefaction project on a greenfield site that it owns in the vicinity of Port Arthur, Texas, located along the Sabine-Neches waterway.
SI Partners is constructing a natural gas liquefaction project on a greenfield site that it owns in the vicinity of Port Arthur, Texas, located along the Sabine-Neches waterway.
Failure by SoCalGas to timely recover all or a substantial portion of its costs related to the LA Fires or any conclusion that such recovery is no longer probable could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows and/or prospects. Aliso Canyon Natural Gas Storage Facility Litigation.
Failure by SoCalGas to timely recover all or a substantial portion of its costs related to the LA Fires or any conclusion that such recovery is no longer probable could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows and/or prospects.
Oncor’s regulatory rate base as reported in these filings as of December 31, 2023 and 2022 was $23.1 billion and $20.7 billion, respectively. As calculated on a similar basis, its estimated regulatory rate base at December 31, 2024 was $26.6 billion.
Oncor’s regulatory rate base as reported in these filings as of December 31, 2024 and 2023 was $26.6 billion and $23.1 billion, respectively. As calculated on a similar basis, its estimated regulatory rate base at December 31, 2025 was $31.5 billion.
At December 31, 2024, a total of 2,909,274 shares of Sempra common stock remain subject to future settlement under this forward sale agreement, which may be settled on one or more dates specified by us occurring no later than June 30, 2026, which is the final settlement date under the agreement.
At December 31, 2025, a total of 2,909,274 shares of Sempra common stock remain subject to future settlement under this forward sale agreement, which may be settled on one or more dates specified by us no later than June 30, 2026.
SoCalGas In 2024 and 2023, SoCalGas paid common stock dividends to Pacific Enterprises and Pacific Enterprises paid corresponding dividends to Sempra of $200 million and $100 million, respectively. SoCalGas did not declare or pay common stock dividends in 2022. SoCalGas’ dividends on common stock declared on an annual historical basis may not be indicative of future declarations.
SoCalGas In 2025, 2024 and 2023, SoCalGas paid common stock dividends to Pacific Enterprises and Pacific Enterprises paid corresponding dividends to Sempra of $200 million, $200 million and $100 million, respectively. SoCalGas’ dividends on common stock declared on an annual historical basis may not be indicative of future declarations.
At December 31, 2024, SoCalGas expects to make interest payments on long-term debt totaling $5.6 billion, of which $300 million is expected to be paid in 2025 and $5.3 billion is expected to be paid in subsequent years through 2054. We calculate expected interest payments using the stated interest rate for fixed-rate obligations, including floating-to-fixed interest rate swaps.
At December 31, 2025, SoCalGas expects to make interest payments on long-term debt totaling $6.5 billion, of which $400 million is expected to be paid in 2026 and $6.1 billion is expected to be paid in subsequent years through 2055. We calculate expected interest payments using the stated interest rate for fixed-rate obligations, including floating-to-fixed interest rate swaps.
MD&A – Results of Operations ” in our 2023 annual report on Form 10-K filed with the SEC on February 27, 2024.
MD&A – Results of Operations ” in our 2024 annual report on Form 10-K filed with the SEC on February 25, 2025.
MD&A – Results of Operations ” in our 2023 annual report on Form 10-K filed with the SEC on February 27, 2024.
MD&A – Results of Operations ” in our 2024 annual report on Form 10-K filed with the SEC on February 25, 2025.
We expect the majority of our capital expenditures for PP&E and investments in 2025 will relate to investments in transmission and distribution safety and reliability at our regulated public utilities and construction of the PA LNG Phase 1 project, ECA LNG Phase 1 project and natural gas pipelines at Sempra Infrastructure.
We expect the majority of our capital expenditures for PP&E and investments in 2026 will relate to investments in transmission and distribution safety and reliability at our regulated public utilities and construction of the PA LNG Phase 1 project and PA LNG Phase 2 project at Sempra Infrastructure.
Capital Stock Transactions Sempra Cash provided by issuances of common stock was: ▪ $1,219 million in 2024 ▪ $145 million in 2023 ▪ $4 million in 2022 Cash used for repurchases of common stock was: ▪ $43 million in 2024 ▪ $32 million in 2023 ▪ $478 million in 2022 We discuss the issuances and repurchases of common stock in Note 12 of the Notes to Consolidated Financial Statements.
Capital Stock Transactions Sempra Cash provided by issuances of common stock was: ▪ $32 million in 2025 ▪ $1,219 million in 2024 ▪ $145 million in 2023 Cash used for repurchases of common stock was: ▪ $58 million in 2025 ▪ $43 million in 2024 ▪ $32 million in 2023 We discuss the issuances and repurchases of common stock in Note 13 of the Notes to Consolidated Financial Statements.
In December 2024, the FERC issued an order, which SDG&E has appealed, finding that SDG&E is not eligible for the California ISO adder and that the TO5 adder refund provision has been triggered, requiring SDG&E to refund customers the California ISO adder retroactively from June 1, 2019. In June 2024, SDG&E exercised its right to terminate the TO5 settlement.
In December 2024, the FERC issued an order, which SDG&E has appealed, finding that SDG&E is not eligible for the California ISO adder and that the TO5 adder refund provision had been triggered, requiring SDG&E to refund customers the California ISO adder retroactively from June 1, 2019. TO6 Filing.
UTILITIES: ELECTRIC REVENUES AND COST OF ELECTRIC FUEL AND PURCHASED POWER (Dollars in millions) Years ended December 31, 2024 2023 2022 Sempra: Electric revenues: Sempra California $ 4,299 $ 4,336 $ 4,785 Eliminations and adjustments (3) (2) (2) Total $ 4,296 $ 4,334 $ 4,783 Cost of electric fuel and purchased power (1) : Sempra California $ 308 $ 445 $ 994 Eliminations and adjustments (63) (70) (57) Total $ 245 $ 375 $ 937 (1) Excludes depreciation and amortization, which are presented separately on Sempra’s Consolidated Statements of Operations.
UTILITIES: ELECTRIC REVENUES AND COST OF ELECTRIC FUEL AND PURCHASED POWER (Dollars in millions) Years ended December 31, 2025 2024 2023 Sempra: Electric revenues: Sempra California $ 4,555 $ 4,299 $ 4,336 Eliminations and adjustments (3) (3) (2) Total $ 4,552 $ 4,296 $ 4,334 Cost of electric fuel and purchased power (1) : Sempra California $ 448 $ 308 $ 445 Eliminations and adjustments (63) (63) (70) Total $ 385 $ 245 $ 375 (1) Excludes depreciation and amortization, which are presented separately on Sempra’s Consolidated Statements of Operations.
We discuss details of SDG&E’s and SoCalGas’ regulatory assets and liabilities and additional factors that management considers when assessing probabilities associated with regulatory balances in Notes 1, 4, 14 and 15 of the Notes to Consolidated Financial Statements. INCOME TAXES Sempra, SDG&E, SoCalGas Our income tax expense and related balance sheet amounts involve significant management judgments and estimates.
We discuss details of SDG&E’s and SoCalGas’ regulatory assets and liabilities and additional factors that management considers when assessing probabilities associated with regulatory balances in Notes 1, 4, 15 and 16 of the Notes to Consolidated Financial Statements. 2025 Form 10-K | 108 Tab le of Cont ents INCOME TAXES Sempra, SDG&E, SoCalGas Our income tax expense and related balance sheet amounts involve significant management judgments and estimates.
When (i) including Sempra’s proportionate ownership interest in expected capital expenditures for PP&E at unconsolidated equity method investees while excluding Sempra’s expected capital contributions to those unconsolidated equity method investees and (ii) excluding NCI’s proportionate ownership interest in expected capital expenditures for PP&E at Sempra and at unconsolidated equity method investees, we expect capital expenditures for PP&E from 2025 through 2029 to total $55.5 billion.
When (i) including Sempra’s proportionate ownership interest in expected capital expenditures for PP&E at unconsolidated equity method investees while excluding Sempra’s expected capital contributions to those unconsolidated equity method investees and (ii) excluding NCI’s proportionate ownership interest in expected capital expenditures for PP&E at Sempra and at unconsolidated equity method investees, we expect capital expenditures for PP&E from 2026 through 2030 to total $64.9 billion.
We discuss our short-term debt activities in Note 6 of the Notes to Consolidated Financial Statements and below in “Sources and Uses of Cash.” 2024 Form 10-K | 83 Table of Contents The following table shows selected statistics for our commercial paper borrowings.
We discuss our short-term debt activities in Note 7 of the Notes to Consolidated Financial Statements and below in “Sources and Uses of Cash.” The following table shows selected statistics for our commercial paper borrowings.
Also, cash flows 2024 Form 10-K | 82 Table of Contents from operations may be impacted by the timing and outcomes of regulatory proceedings, commencement and completion of, and potential cost overruns for, large projects and other material events.
Also, cash flows from operations may be impacted by the timing and outcomes of regulatory proceedings, commencement and completion of, and potential cost overruns for, large projects and other material events.
These projects and programs include (i) the Track 2 and Track 3 requests related to SDG&E’s wildfire mitigation plan costs that we describe below, as well as review of SoCalGas’ and SDG&E’s Pipeline Safety Enhancement Plan costs incurred from 2015 to 2020, inclusively, which the GRC FD added to the Track 3 request, (ii) the ability to file advice letters to implement the revenue requirements associated with the costs of SDG&E’s Moreno compressor station project and SoCalGas’ Honor Rancho compressor station and customer information system replacement projects, which projects were all approved by the CPUC subject to applicable cost caps, and (iii) the opportunity to file separate applications for cost recovery of mobile home park and gas integrity management programs at both SDG&E and SoCalGas, advanced metering infrastructure replacements at SDG&E, and other projects and programs.
These projects and programs include (i) the Track 2 and Track 3 requests that we describe below, (ii) the ability to file advice letters to implement the revenue requirements associated with the costs of SDG&E’s Moreno compressor station project and SoCalGas’ Honor Rancho compressor station and customer information system replacement projects, which projects were all approved by the CPUC subject to applicable cost caps, and (iii) the opportunity to file separate applications for cost recovery of mobile home park and gas integrity management programs at both SDG&E and SoCalGas, advanced metering infrastructure replacements at SDG&E, and other projects and programs. 2024 GRC Track 2.
CAPITAL EXPENDITURES FOR INVESTMENTS (Dollars in millions) Years ended December 31, 2024 2023 2022 Sempra: Sempra Texas Utilities $ 976 $ 367 $ 346 Sempra Infrastructure 12 15 30 Total Sempra $ 988 $ 382 $ 376 2024 Form 10-K | 97 Table of Contents Future Capital Expenditures for PP&E and Investments The amounts and timing of capital expenditures for PP&E and certain investments are generally subject to approvals by various regulatory and other governmental and environmental bodies, including the CPUC, the FERC and the PUCT, and various other factors described in this MD&A and in “Part I – Item 1A.
CAPITAL EXPENDITURES FOR INVESTMENTS (Dollars in millions) Years ended December 31, 2025 2024 2023 Sempra: Sempra Texas Utilities $ 2,013 $ 976 $ 367 Sempra Infrastructure 2 12 15 Total Sempra $ 2,015 $ 988 $ 382 2025 Form 10-K | 104 Tab le of Cont ents Future Capital Expenditures for PP&E and Investments The amounts and timing of capital expenditures for PP&E and certain investments are generally subject to approvals by various regulatory and other governmental and environmental bodies, including the CPUC, the FERC and the PUCT, and various other factors described in this MD&A and in “Part I – Item 1A.
We expect that the requests for cost recovery of these projects and programs, which remain subject to CPUC approval, will result in additional amounts of authorized revenue requirement that are not included in the amounts described above.
We expect that the requests for cost recovery of these projects and programs, which remain subject to CPUC approval, may result in additional amounts of authorized revenue requirement.
The differences in cost between estimates and actual are recovered or refunded in subsequent periods through rates. 2024 Form 10-K | 70 Table of Contents Utility cost of electric fuel and purchased power includes utility-owned generation, power purchased from third parties, and net power purchases and sales to/from the California ISO.
The differences in cost between estimates and actual are recovered or refunded in subsequent periods through rates. 2025 Form 10-K | 76 Tab le of Cont ents Utility cost of electric fuel and purchased power includes utility-owned generation, power purchased from third parties, and net power purchases and sales to/from the California ISO.
ECA LNG Phase 2 Project. Sempra Infrastructure is developing a second, large-scale natural gas liquefaction project at the site of its existing ECA Regas Facility. We expect the proposed ECA LNG Phase 2 project to be comprised of two trains and one LNG storage tank and produce approximately 12 Mtpa of export capacity.
ECA LNG Phase 2 Project. SI Partners is developing a second, large-scale natural gas liquefaction project at the site of its existing ECA Regas Facility in Baja California, Mexico. We expect the proposed ECA LNG Phase 2 project to be comprised of multiple trains and one additional LNG storage tank and produce approximately 12 Mtpa of export capacity.
We discuss variable interests in Note 1 of the Notes to Consolidated Financial Statements. In June 2021, Sempra provided a promissory note, which constitutes a guarantee, for the benefit of Cameron LNG JV with a maximum exposure to loss of $165 million.
The guarantee will terminate in May 2026. We discuss this guarantee in Note 16 of the Notes to Consolidated Financial Statements. In June 2021, Sempra provided a promissory note, which constitutes a guarantee for the benefit of Cameron LNG JV with a maximum exposure to loss of $165 million.
In 2024, 2023 and 2022, Sempra Infrastructure distributed $297 million, $730 million and $237 million, respectively, to its NCI owners, and NCI owners contributed $1,235 million, $1,770 million and $31 million, respectively, to Sempra Infrastructure.
In 2025, 2024 and 2023, Sempra Infrastructure distributed $609 million, $297 million and $730 million, respectively, to its NCI owners, and NCI owners contributed $327 million, $1,235 million and $1,770 million, respectively, to Sempra Infrastructure.
These changes generally represent the difference between when costs are incurred and when they are ultimately recovered or refunded in rates through billings to customers. CPUC GRC 2024 Revenue Requirements and Attrition Year Revenues.
These changes generally represent the difference between when costs are incurred and when they are ultimately recovered or refunded in rates through billings to customers.
The collective bargaining agreement for these employees covering wages, hours, working conditions, and medical and other benefit plans was due to expire on September 30, 2024, but was extended by mutual agreement through February 7, 2025, while SoCalGas and the unions continued negotiations. Two ratification votes in late 2024 were not successful.
The collective bargaining agreement for these employees covering wages, hours, working conditions, and medical and other benefit plans was due to expire on September 30, 2024, but was extended by mutual agreement while SoCalGas and the unions continued negotiations.
Port Arthur LNG has a seven-year term loan facility for an aggregate principal amount of approximately $6.8 billion and an initial working capital facility for up to $200 million, each of which matures in March 2030. At December 31, 2024, $1.1 billion of borrowings were outstanding under the term loan facility agreement.
Port Arthur LNG I has a seven-year term loan facility for an aggregate principal amount of approximately $6.8 billion and an initial working capital facility for up to $200 million, each of which matures in March 2030.
The successful development and/or construction of these projects is subject to numerous risks and uncertainties. 2024 Form 10-K | 89 Table of Contents With respect to projects in development, these risks and uncertainties include, as applicable depending on the project, any failure to: ▪ secure binding customer commitments ▪ identify suitable project and equity partners ▪ obtain sufficient financing ▪ reach agreement with project partners or other applicable parties to proceed ▪ obtain, modify, and/or maintain permits and regulatory approvals, including LNG export applications to non-FTA countries ▪ negotiate, complete and maintain suitable commercial agreements, which may include EPC, tolling, equity acquisition, governance, LNG sales, gas supply and transportation contracts ▪ reach a positive final investment decision With respect to projects under construction, these risks and uncertainties include, in addition to the risks described above as applicable to each project, construction delays and cost overruns.
The successful development and/or construction of these projects is subject to numerous risks and uncertainties. 2025 Form 10-K | 96 Tab le of Cont ents With respect to projects in development, these risks and uncertainties include a variety of factors as applicable depending on the project and many of which are outside our control, including any failure to: ▪ secure binding customer commitments ▪ identify suitable project and equity partners ▪ obtain sufficient financing ▪ reach agreement with project partners or other applicable parties to proceed ▪ obtain, modify, and/or maintain permits and regulatory approvals, including LNG export applications to non-FTA countries and any applicable approvals in Mexico ▪ negotiate, complete and maintain suitable commercial agreements, which may include EPC, tolling, equity acquisition, governance, LNG sales, gas supply and transportation contracts ▪ reach a positive FID With respect to projects under construction, these risks and uncertainties include, in addition to the risks described above as applicable to each project, construction delays, unforeseen design flaws, cost overruns, stakeholder relations issues and other construction-related issues.
CAPITAL EXPENDITURES FOR PP&E (Dollars in millions) Years ended December 31, 2024 2023 2022 Sempra: Sempra California (1) $ 4,753 $ 4,560 $ 4,466 Sempra Infrastructure 3,459 3,832 884 Segment totals 8,212 8,392 5,350 Parent and other 3 5 7 Total Sempra $ 8,215 $ 8,397 $ 5,357 (1) Includes capital expenditures for PP&E of $2,522, $2,540, and $2,473 at SDG&E and $2,231, $2,020, and $1,993 at SoCalGas for 2024, 2023, and 2022, respectively.
CAPITAL EXPENDITURES FOR PP&E (Dollars in millions) Years ended December 31, 2025 2024 2023 Sempra: Sempra California (1) $ 4,543 $ 4,753 $ 4,560 Sempra Infrastructure 6,063 3,459 3,832 Segment totals 10,606 8,212 8,392 Parent and other 6 3 5 Total Sempra $ 10,612 $ 8,215 $ 8,397 (1) Includes capital expenditures for PP&E of $2,427, $2,522, and $2,540 at SDG&E and $2,116, $2,231, and $2,020 at SoCalGas for 2025, 2024, and 2023, respectively.
Sempra California SDG&E’s and SoCalGas’ operations have historically provided relatively stable earnings and liquidity. Their future performance and liquidity will depend primarily on the ratemaking and regulatory process, environmental regulations, economic conditions, actions by legislatures, litigation and the changing energy marketplace, as well as other matters described in this report.
Their future performance and liquidity will depend primarily on the ratemaking and regulatory process, environmental regulations, economic conditions, actions by legislatures, litigation and the changing energy marketplace, as well as other matters described in this report.
Enova Corporation, a wholly owned subsidiary of Sempra, owns all of SDG&E’s outstanding common stock. Accordingly, dividends paid by SDG&E to Enova Corporation and dividends paid by Enova Corporation to Sempra are eliminated in Sempra’s consolidated financial statements.
Pacific Enterprises, a wholly owned subsidiary of Sempra, owns all of SoCalGas’ outstanding common stock. Accordingly, dividends paid by SoCalGas to Pacific Enterprises and dividends paid by Pacific Enterprises to Sempra are eliminated in Sempra’s consolidated financial statements.
Risk Factors” for discussions of the following legal and regulatory matters affecting our operations in Mexico and risks associated with Mexican laws, policies and government influence: Energía Costa Azul ▪ Land Disputes ▪ Environmental and Social Impact Permits One or more unfavorable final decisions on these land disputes or environmental and social impact permit challenges could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the 2024 Form 10-K | 94 Table of Contents site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
Risk Factors” for discussions of the following legal and regulatory matters affecting our operations in Mexico and risks associated with Mexican laws, policies and government influence: ▪ Energía Costa Azul ◦ Land Disputes ◦ Environmental and Social Impact Permits ▪ Mexican Government Influence on Economic and Energy Matters One or more unfavorable conclusions on these land disputes, environmental and social impact permit challenges, and regulatory and other actions by the Mexican government could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects. 2025 Form 10-K | 102 Tab le of Cont ents SOURCES AND USES OF CASH We discuss herein our sources and uses of cash for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Sempra Infrastructure has received authorizations from the DOE that permit the LNG to be produced from the PA LNG Phase 1 project to be exported to all current and future FTA and non-FTA countries. In April 2019, the FERC approved the siting, construction and operation of the PA LNG Phase 1 project.
SI Partners has received authorizations from the DOE that permit the export of LNG to be produced from the PA LNG Phase 1 project to all current and future FTA and non-FTA countries, and from the FERC for the siting, construction and operation of the PA LNG Phase 1 project.
In addition, Oncor will not make distributions if a majority of Oncor’s independent directors or any minority member director determines it is in the best interests of Oncor to retain such amounts to meet expected future requirements.
In addition, Oncor will not make distributions if a majority of Oncor’s independent directors or any minority member director determines it is in the best interests of Oncor to retain such amounts to meet expected future requirements. 2025 Form 10-K | 95 Tab le of Cont ents Oncor 2025 Comprehensive Base Rate Review.
We provide further discussion in Note 3 of the Notes to Consolidated Financial Statements. 2024 Form 10-K | 69 Table of Contents UTILITIES: NATURAL GAS REVENUES AND COST OF NATURAL GAS (Dollars in millions) Years ended December 31, 2024 2023 2022 Sempra: Natural gas revenues: Sempra California $ 7,083 $ 9,425 $ 7,792 Sempra Infrastructure 78 87 89 Segment totals 7,161 9,512 7,881 Eliminations and adjustments (20) (17) (13) Total $ 7,141 $ 9,495 $ 7,868 Cost of natural gas (1) : Sempra California $ 1,118 $ 3,747 $ 2,562 Sempra Infrastructure 22 8 37 Segment totals 1,140 3,755 2,599 Eliminations and adjustments (8) (36) 4 Total $ 1,132 $ 3,719 $ 2,603 (1) Excludes depreciation and amortization, which are presented separately on Sempra’s Consolidated Statements of Operations.
We provide further discussion in Note 3 of the Notes to Consolidated Financial Statements. 2025 Form 10-K | 75 Tab le of Cont ents UTILITIES: NATURAL GAS REVENUES AND COST OF NATURAL GAS (Dollars in millions) Years ended December 31, 2025 2024 2023 Sempra: Natural gas revenues: Sempra California $ 7,263 $ 7,083 $ 9,425 Sempra Infrastructure 78 78 87 Segment totals 7,341 7,161 9,512 Eliminations and adjustments (22) (20) (17) Total $ 7,319 $ 7,141 $ 9,495 Cost of natural gas (1) : Sempra California $ 1,264 $ 1,118 $ 3,747 Sempra Infrastructure 25 22 8 Segment totals 1,289 1,140 3,755 Eliminations and adjustments (7) (8) (36) Total $ 1,282 $ 1,132 $ 3,719 (1) Excludes depreciation and amortization, which are presented separately on Sempra’s Consolidated Statements of Operations.
We received authorizations from the DOE to export U.S.-produced natural gas to Mexico and to re-export LNG to non-FTA countries from the proposed ECA LNG Phase 2 project.
We received authorizations from the DOE to export U.S.-produced natural gas to Mexico and to re-export LNG to non-FTA countries from the proposed ECA LNG Phase 2 project. In February 2026, the DOE extended the construction deadline associated with the project to December 2029.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

24 edited+4 added−2 removed14 unchanged
Biggest changeWe try to structure our hedging transactions with the objective that over time (i) realized gains and losses on our economic hedges would be largely offset by gains and losses related to our purchases or sales of natural gas and (ii) we would realize the economic benefit we anticipated at the time we structured the original transaction.
Biggest changeWe try to structure our hedging transactions with the objective that over time (i) realized gains and losses on our economic hedges would be largely offset by gains and losses related to our purchases or sales of natural gas and (ii) we would realize the economic benefit we anticipated at the time we structured the original transaction. 2025 Form 10-K | 112 Tab le of Cont ents A hypothetical 10% change in commodity prices would have resulted in a change in the fair value of our commodity-based natural gas and electricity derivatives of $11 million and $13 million at December 31, 2025 and 2024, respectively.
If such costs continue to be subject to significant inflationary pressures and we are not able to fully recover such higher costs in rates or there is a delay in recovery, these increased costs may have a significant effect on Sempra’s, SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.
If such costs continue to be subject to inflationary pressures and we are not able to fully recover such higher costs in rates or there is a delay in recovery, these increased costs may have a significant effect on Sempra’s, SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.
If additional costs become subject to significant inflationary pressures, we may not be able to fully recover such higher costs through contractual adjustments for inflation, which may have a significant effect on Sempra’s results of operations, financial condition, cash flows and/or prospects.
If additional costs become subject to inflationary pressures, we may not be able to fully recover such higher costs through contractual adjustments for inflation, which may have a significant effect on Sempra’s results of operations, financial condition, cash flows and/or prospects.
INTEREST RATE RISK We are exposed to fluctuations in interest rates primarily from our short- and long-term debt. Subject to regulatory constraints, we periodically enter into interest rate swap agreements to moderate our exposure to interest rate changes and to lower our overall cost of borrowing.
INTEREST RATE RISK We are exposed to fluctuations in interest rates primarily from our short- and long-term debt. Subject to regulatory constraints, we periodically enter into interest rate swap agreements intended to moderate our exposure to interest rate changes and to lower our overall cost of borrowing.
MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations.” The hypothetical effect for every 10% appreciation in the U.S. dollar against the Mexican peso, in which we have operations and investments, are as follows: HYPOTHETICAL EFFECTS FROM 10% STRENGTHENING OF U.S.
MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations.” The hypothetical effect for every 10% appreciation in the U.S. dollar against the Mexican peso, in which we have operations and investments, is as follows: HYPOTHETICAL EFFECTS FROM 10% STRENGTHENING OF U.S.
We discuss revenue recognition in Note 3 and additional market-risk information regarding derivative instruments in Note 9 of the Notes to Consolidated Financial Statements. We have exposure to changes in commodity prices, interest rates and foreign currency and inflation rates.
We discuss revenue recognition in Note 3 and additional market-risk information regarding derivative instruments in Note 10 of the Notes to Consolidated Financial Statements. We have exposure to changes in commodity prices, interest rates and foreign currency and inflation rates.
Sempra, SDG&E, SoCalGas and Sempra Infrastructure maintain separate risk management committees, organizations and processes to provide oversight of these activities for their respective businesses. The committees consist of senior officers who establish policy, oversee energy risk management activities, and monitor the results of trading and other activities to help ensure compliance with our energy risk management and trading policies.
Sempra, SDG&E, SoCalGas and SI Partners maintain separate risk management committees, organizations and processes to provide oversight of these activities for their respective businesses. The committees consist of senior officers who establish policy, oversee energy risk management activities, and monitor the results of trading and other activities to help ensure compliance with our energy risk management and trading policies.
Sempra Infrastructure generally secures long-term contracts that are U.S. dollar-denominated or referenced and are periodically adjusted for market factors, including inflation, and Sempra Infrastructure generally enters into lump-sum contracts for its large construction projects in which much of the risk during construction is absorbed or hedged by the EPC contractor.
SI Partners generally secures long-term contracts that are U.S. dollar-denominated or referenced and are periodically adjusted for market factors, including inflation, and SI Partners generally enters into lump-sum contracts for its large construction projects in which much of the risk during construction is absorbed or hedged by the EPC contractor.
Based on a net monetary liability position of $4.5 billion, including those related to our investments in JVs, at December 31, 2024, the hypothetical effect of a 10% increase in the Mexican inflation rate is approximately $89 million lower earnings attributable to common shares as a result of higher income tax expense for our consolidated entities, as well as lower equity earnings for our JVs.
Based on a net monetary liability position of $4.5 billion, including those related to our equity method investments, at December 31, 2025, the hypothetical effect of a 10% increase in the Mexican inflation rate is approximately $89 million lower earnings attributable to common shares as a result of higher income tax expense for our consolidated entities, as well as lower equity earnings for our equity method investees.
During this period, Sempra Texas Utilities experienced increased costs, including labor and contractor-related costs as well as higher insurance premiums, and does not have specific regulatory mechanisms that allow for recovery of higher non-reconcilable costs due to inflation; rather, recovery is limited to rate updates through capital trackers and base rate reviews, which may result in partial non-recovery due to the regulatory lag.
During this period, Sempra Texas Utilities experienced increased costs, including labor and contractor-related costs, materials, equipment and supplies, as well as higher insurance premiums, and does not have specific regulatory mechanisms that allow for recovery of higher non-reconcilable costs due to inflation; rather, recovery is limited to rate updates through capital trackers, UTM filings and base rate reviews, which may result in partial non-recovery due to regulatory lag.
SDG&E and SoCalGas use natural gas derivatives and SDG&E uses electricity derivatives to manage natural gas and electric price risk associated with servicing load requirements. The use of natural gas and electricity derivatives is subject to certain limitations imposed by company policy and regulatory requirements.
SDG&E and SoCalGas use natural gas derivatives and SDG&E uses electricity derivatives with the objective of managing natural gas and electric price and basis risk associated with servicing load requirements. The use of natural gas and electricity derivatives is subject to certain limitations imposed by company policy and regulatory requirements.
However, SoCalGas may, at times, be exposed to market risk as a result of the GCIM, which rewards or penalizes the utility for commodity costs below or above certain benchmarks. The one-day VaR for SDG&E’s and SoCalGas’ commodity positions were both $2 million at December 31, 2024 and $2 million and $4 million, respectively, at December 31, 2023.
However, SoCalGas may, at times, be exposed to market risk as a result of the GCIM, which awards or penalizes the utility for commodity costs below or above certain benchmarks. The one-day VaR for SDG&E’s and SoCalGas’ commodity positions were $2 million and $6 million, respectively, at December 31, 2025 and both $2 million at December 31, 2024.
(4) Amount represents the effects of currency exchange rate movement from December 31, 2024 that would be recorded to OCI at the end of the reporting period. Monetary assets and liabilities at our Mexican subsidiaries and JVs that are denominated in U.S. dollars may fluctuate significantly throughout the year.
(4) Amount represents the effects of currency exchange rate movement from December 31, 2025 that would be recorded to OCI at the end of the reporting period. Monetary assets and liabilities at our Mexican subsidiaries and equity method investees that are denominated in U.S. dollars may fluctuate significantly throughout the year.
(2) Amount represents the impact to earnings for a change in the average exchange rate throughout the reporting period. (3) Amount primarily represents the effects of currency exchange rate movement from December 31, 2024 on monetary assets and liabilities and remeasurement of non-U.S. deferred income tax balances at our Mexican subsidiaries.
(2) Amount represents the impact to earnings for a change in the average exchange rate throughout the reporting period. (3) Amount primarily represents the effects of currency exchange rate movement from December 31, 2025 on monetary assets and liabilities and remeasurement of foreign deferred income tax balances at our Mexican subsidiaries.
The following discussion of these primary market-risk exposures as of December 31, 2024 includes a discussion of how these exposures are managed. COMMODITY PRICE RISK Market risk related to physical commodities is created by volatility in the prices and basis of certain commodities.
The following discussions of these primary market-risk exposures as of December 31, 2025 includes discussions of how these exposures are managed. COMMODITY PRICE RISK Market risk related to physical commodities is created by volatility in the prices and basis of certain commodities.
DOLLAR (1) (Dollars in millions) Hypothetical effects Sempra: Translation of 2024 earnings to U.S. dollars (2) $ (2) Transactional exposure (3) 151 Translation of net assets of foreign subsidiaries and investment in foreign entities (4) (18) (1) After the effects of foreign currency derivatives.
DOLLAR (1) (Dollars in millions) Hypothetical effects Sempra: Translation of 2025 earnings to U.S. dollars (2) $ (2) Transactional exposure (3) 124 Translation of net assets of foreign subsidiaries and investment in foreign entities (4) (24) (1) After the effects of foreign currency derivatives.
In 2024 and 2023, SDG&E and SoCalGas experienced inflationary pressures from increases in various costs, including the cost of natural gas, electric fuel and purchased power, labor, materials and supplies, as well as availability of labor and materials.
In 2025 and 2024, SDG&E and SoCalGas experienced inflationary pressures from increases in various costs, including the cost of natural gas, electric fuel and purchased power, labor, materials, equipment and supplies, as well as decreased availability of many of these items.
We provide further information about debt and interest rate swap transactions in Notes 6 and 9, respectively, of the Notes to Consolidated Financial Statements. 2024 Form 10-K | 106 Table of Contents We also are subject to the effect of interest rate fluctuations on the assets of our pension plans, PBOP plans, and SDG&E’s NDT.
We provide further information about debt and interest rate swap transactions in Notes 7 and 10, respectively, of the Notes to Consolidated Financial Statements. We also are subject to the effect of interest rate fluctuations on the assets of our pension plans, PBOP plans, and SDG&E’s NDT.
Sempra Infrastructure is exposed to commodity price risk indirectly through its LNG, natural gas pipelines and storage, and power-generating assets. Sempra Infrastructure has utilized and may continue to utilize commodity contracts, including physical 2024 Form 10-K | 105 Table of Contents and financial derivatives, in an effort to mitigate these risks and optimize the value of these assets.
SI Partners is exposed to commodity price risk indirectly through its LNG, natural gas pipelines and storage, and power-generating assets. SI Partners has utilized and may continue to utilize commodity contracts, including physical and financial derivatives, in an effort to mitigate these risks and optimize the value of these assets.
If interest rates increased or decreased by 10% on all variable-rate long-term debt at December 31, 2024, after considering the effects of interest rate swaps, the change in earnings attributable to common shares over the 12-month period ending December 31, 2025 would be approximately $3 million.
If interest rates increased or decreased by 10% on all variable-rate long-term debt outstanding at December 31, 2025, all of which relates to variable-rate long-term debt classified as held for sale, after considering the effects of interest rate swaps, the change in earnings attributable to common shares over the 12-month period ending December 31, 2026 would be approximately $4 million.
The table below shows the nominal amount of our debt: NOMINAL AMOUNT OF DEBT (1) (Dollars in millions) December 31, 2024 December 31, 2023 Sempra SDG&E SoCalGas Sempra SDG&E SoCalGas Short-term: Sempra California $ 1,454 $ 417 $ 1,037 $ 947 $ — $ 947 Other 562 — — 1,397 — — Long-term: Sempra California fixed-rate $ 16,309 $ 8,950 $ 7,359 $ 15,109 $ 8,350 $ 6,759 Sempra California variable-rate — — — 400 400 — Other fixed-rate 15,527 — — 11,317 — — Other variable-rate 1,063 — — 890 — — (1) After the effects of interest rate swaps.
The table below shows the nominal amount of our debt: NOMINAL AMOUNT OF DEBT (1) (Dollars in millions) December 31, 2025 December 31, 2024 Sempra (2) SDG&E SoCalGas Sempra SDG&E SoCalGas Short-term: Sempra California $ 1,436 $ 532 $ 904 $ 1,454 $ 417 $ 1,037 Other 2,733 — — 562 — — Long-term: Sempra California fixed-rate $ 17,909 $ 9,800 $ 8,109 $ 16,309 $ 8,950 $ 7,359 Other fixed-rate 11,958 — — 15,527 — — Other variable-rate — — — 1,063 — — (1) After the effects of interest rate swaps.
Earnings attributable to common shares are affected by changes in interest rates on short-term debt and variable-rate long-term debt. If weighted-average interest rates on short-term debt outstanding at December 31, 2024 increased or decreased by 10%, the change in earnings attributable to common shares over the 12-month period ending December 31, 2025 would be approximately $7 million.
If weighted-average interest rates on short-term debt outstanding at December 31, 2025, including short-term debt classified as held for sale, increased or decreased by 10%, the change in earnings attributable to common shares over the 12-month period ending December 31, 2026 would be approximately $14 million.
In 2024 and 2023, Sempra Infrastructure experienced inflationary pressures from increases in various costs, including the cost of labor, materials and supplies.
In 2025 and 2024, SI Partners experienced inflationary pressures from increases in various costs, including the cost of commodities, labor, materials, equipment and supplies, as well as decreased availability of many of these items.
However, we expect the effects of these fluctuations, as they relate to Sempra California, to be reflected in future rates . FOREIGN CURRENCY EXCHANGE RATE RISK AND INFLATION EXPOSURE We discuss our foreign currency exchange rate risk and inflation exposure in “Part II – Item 7.
We expect the effects of these fluctuations, as they relate to Sempra California, to be reflected in future rates . 2025 Form 10-K | 113 Tab le of Cont ents FOREIGN CURRENCY EXCHANGE RATE RISK AND INFLATION EXPOSURE At December 31, 2025, SI Partners, which holds our foreign operations, is classified as held for sale.
Removed
A hypothetical 10% change in commodity prices would have resulted in a change in the fair value of our commodity-based natural gas and electricity derivatives of $13 million and $14 million at December 31, 2024 and 2023, respectively.
Added
Before reductions for unamortized discount and debt issuance costs and excluding finance lease obligations. (2) Excludes $8,287 that is included in Liabilities Held for Sale on the Sempra Consolidated Balance Sheet, which consists of $362 of short-term debt, $5,766 of long-term fixed-rate debt, and $2,159 of long-term variable-rate debt.
Removed
Before reductions for unamortized discount and debt issuance costs and excluding finance lease obligations.
Added
Earnings attributable to common shares are affected by changes in interest rates on short-term debt and variable-rate long-term debt.
Added
Upon completion of the sale, which we expect to occur in the second or third quarter of 2026, we will deconsolidate SI Partners and account for our remaining 25% interest under the equity method, thereby reducing volatility in our results of operations associated with foreign currency exchange rate fluctuations and Mexican inflation.
Added
We discuss our foreign currency exchange rate risk and inflation exposure in “Part II – Item 7.

Other SRE 10-K year-over-year comparisons