Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 189

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 2
Chunk 189
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. In December 2024, the CPUC approved an FD in the 2024 GRC, effective retroactive to January 1, 2024, for which SDG&E recorded the retroactive impacts in the fourth quarter of 2024. SDG&E’s authorized base revenues for the first three quarters of 2025 are based on the revenues authorized for the 2024 test year plus the amount authorized for attrition for 2025. We provide additional information on the 2024 GRC FD in Note 4 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.

RESULTS OF OPERATIONS

RESULTS OF OPERATIONS(Dollars in millions)

In the three months ended September 30, 2025 compared to the same period in 2024, the increase in earnings of $63 million (24%) was primarily due to:

▪$53 million higher income tax benefits primarily from flow-through items, including impacts from the election to accelerate self-developed software deductions, and from the resolution of prior year income tax items

▪$15 million higher CPUC base operating margin, net of operating expenses including higher depreciation and $5 million lower authorized cost of capital. In the first three quarters of 2024, SDG&E recorded CPUC-authorized base revenues based on 2023 authorized levels

▪$4 million higher electric transmission margin

▪$4 million higher net regulatory interest income

Offset by:

▪$8 million higher net interest expense

110

In the nine months ended September 30, 2025 compared to the same period in 2024, the increase in earnings of $110 million (16%) was primarily due to:

▪$60 million higher income tax benefits primarily from flow-through items, including impacts from the election to accelerate self-developed software deductions and gas repairs tax benefits (which in the first three quarters of 2024 were recorded as a regulatory liability that was released in the fourth quarter of 2024 as a result of the 2024 GRC FD), and from the resolution of prior year income tax items

▪$49 million higher CPUC base operating margin, net of operating expenses including higher depreciation and $14 million lower authorized cost of capital. In the first three quarters of 2024, SDG&E recorded CPUC-authorized base revenues based on 2023 authorized levels

▪$10 million higher net regulatory interest