Company: SREA
Filing Date: 2025-09-19
Form Type: 8-K
Source: 0001032208-25-000051
Chunk: 2

Company: SEMPRA
Filing Date: 2025-09-19
Form: 8-K
Item: Item 8.01
Chunk 2
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 earn an equity return on a certain amount of capital investments supporting wildfire risk mitigation. The 2025 Wildfire Legislation establishes this amount as $6 billion of wildfire risk mitigation capital investments authorized by the CPUC after January 1, 2026, and SDG& E’s proportionate share is limited to $258 million.

▪ Liability Cap - As with the 2019 Wildfire Legislation, for participating electric IOUs that have received a safety certification as described below, reimbursements to the Continuation Account with electric IOU shareholder contributions are not required if the CPUC reasonableness review described above results in a finding that the participating IOU acted prudently. Reimbursements to the Continuation Account with electric IOU shareholder contributions are required for wildfire liabilities deemed imprudently incurred, but the amount of the reimbursement is capped as described below if the Continuation Account is not otherwise depleted. In the event of a finding of imprudence, the applicable participating electric IOU may credit its shareholder contributions to the Continuation Account against required reimbursements, which are subject to a cap equal to the lesser of (i) the disallowed costs, or (ii) 20% of the electric IOU’s total transmission and distribution equity rate base for the year of ignition of the applicable wildfire, less (a) prior reimbursements by the electric IOU for any covered wildfire-related disallowances within three years before the date of ignition of the applicable wildfire, and (b) any unused shareholder contributions by the electric IOU not already credited. SDG& E’s current estimated cap, which will vary over time, is approximately $1.4 billion based on its 2024 transmission and distribution equity rate base.

▪ Safety Certification - As with the 2019 Wildfire Legislation, the liability cap as described above and the CPUC prudency standards established by the 2019 Wildfire Legislation are available for participating electric IOUs that maintain a valid safety certification, which is annually issued by California’s Office of Energy Infrastructure Safety based on the requirements established by the 2019 Wildfire Legislation. Other than clarification and timing changes, the 2025 Wildfire Legislation does not modify the safety certification requirements.

▪ Insurance Subrogation Reform - The 2025 Wildfire Legislation requires insurance companies to first offer to the participating electric IOU providing service in the territory in which a wildfire ignites the opportunity to purchase or settle certain subrogation claims on the same terms and conditions as those offered to a third party before selling