Company: SREA
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001032208-25-000048
Chunk: 123

Company: SEMPRA
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 1
Chunk 123
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 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 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 Wildfire Fund could be completely exhausted due to fires in the other California electric IOUs’ service territories, by fires in SDG&E’s service territory or by a combination thereof, which would result in accelerated amortization of SDG&E’s Wildfire Fund asset. The carrying value of SDG&E’s Wildfire Fund asset totaled $269 million at June 30, 2025.

PG&E is seeking reimbursement from the Wildfire Fund for losses associated with the Dixie fire, which burned from July 2021 through October 2021. Although the cause of the LA Fires has not been determined, these fires may have a material adverse impact on the Wildfire Fund. Multiple lawsuits related to the Eaton fire have been initiated against Edison, and in July 2025, Edison announced that it is beginning a claims process for the Eaton fire in advance of a formal agency determination of the cause of the fire. Edison has disclosed that its equipment could have been associated with the ignition of the Eaton fire and that a liability is probable but not reasonably estimable.

If any California electric IOUs’ assets are determined to be a cause of fires, including fires of the size and scope of the LA Fires, payments of claims associated with those events 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, with additional potential material exposure if SDG&E’s equipment is determined to be a cause of a fire. Moreover, in the event that the Wildfire Fund is materially diminished, exhausted or terminated, SDG&E would lose the protection afforded by the Wildfire Fund, and as a consequence, a fire in SDG&E’s service territory could have a material adverse effect on SDG&E’s and Sempra’s results of operations, financial condition, cash flows and/or prospects.

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FERC Rate Matters

SDG&E files separately with the FERC for its authorized transmission revenue requirement and ROE on F