Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 380

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 380
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SDG&E

Wildfire Fund and Continuation Account

2019 Wildfire Legislation. We describe the 2019 Wildfire Legislation and SDG&E’s commitment to make annual shareholder contributions to the Wildfire Fund through 2028 in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.

SDG&E is exposed to the risk that the participating California electric IOUs may incur third-party wildfire costs for which they will seek recovery from the Wildfire Fund with respect to wildfires that have occurred since enactment of the 2019 Wildfire Legislation in July 2019. In such a situation, SDG&E may recognize a reduction of its Wildfire Fund asset and record accelerated amortization against earnings when available coverage is reduced due to recoverable claims from any of the participating IOUs. The carrying value of SDG&E’s Wildfire Fund asset totaled $264 million at September 30, 2025.

In October 2025, a participating IOU publicly disclosed that it has received, or expects to receive, approximately $1.2 billion in aggregate reimbursements from the Wildfire Fund for eligible claims related to wildfires that occurred in 2019 and 2021. In the three months and nine months ended September 30, 2025, SDG&E reduced its Wildfire Fund asset by recording $2 million of accelerated amortization in O&M on Sempra’s and SDG&E’s Condensed Consolidated Statements of Operations.

Also in October 2025, another participating IOU publicly disclosed its intent to seek reimbursement from the Wildfire Fund for losses incurred and expected to be incurred in connection with a wildfire that remains under investigation, and for which the cause has not yet been conclusively determined. The administrator of the Wildfire Fund has confirmed that this wildfire qualifies as a “covered wildfire” for purposes of accessing the fund. The participating IOU has stated that it is currently unable to reasonably estimate a range of potential losses associated with this event. Accordingly, SDG&E is unable to estimate a range of potential loss resulting from any reduction in available coverage from the Wildfire Fund. 

For existing claims or new claims based on any California electric IOUs’ assets determined to be a cause of fires, including fires of the size and scope of the Eaton fire, payments of these claims could have a material adverse effect on the Wildfire Fund, including potentially exhausting the fund, and on SDG&E’s and Sempra’s financial condition and results of operations up to the carrying value of our Wildfire Fund asset