Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 103

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 103
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Operational Risks

Our businesses are subject to risks arising from their infrastructure and systems that support this infrastructure.

Our facilities and the systems that interconnect and/or manage them are subject to risks of, among other things, equipment or process failures due to aging or degrading infrastructure or otherwise; human error; loss or outage of a key technology platform or system; shortages of or delays in obtaining equipment, materials, commodities or labor, which have been and may in the future be 

2024 Form 10-K  |  40

exacerbated by supply chain and gas transportation capacity constraints, tight labor markets, and cost increases due to inflationary pressures, tariffs or otherwise, that may not be recoverable in a timely manner or at all; operational restrictions resulting from environmental requirements or governmental interventions or permitting delays; inability to enter into, maintain, extend or replace long-term supply or transportation contracts; and performance below expected levels. Our businesses undertake capital investment projects to construct, replace, operate, maintain and upgrade facilities and systems, but such projects may not be completed or effective at managing these risks and involve significant costs that may not be recoverable. We often rely on third parties, including contractors, to perform work related to these projects and other maintenance activities, which may subject us to liability for safety issues and the quality of work performed. Because some of our facilities are interconnected with those of third parties, including customer-side-of-meter facilities, natural gas pipelines and power generation facilities that produce most of the power we distribute, the operation of our facilities could also be materially adversely affected by these or similar risks to such third-party systems, which may be unanticipated or uncontrollable by us.

Additional risks associated with our ability to safely and reliably construct, replace, operate, maintain and upgrade facilities and systems, which may be beyond our control, include:

▪failure to meet customer demand for electricity and/or natural gas, including electric or gas outages

▪gas surges into homes or other properties

▪release of hazardous or toxic substances, including gas leaks

▪other incidents impacting the health, safety, or security of employees, contractors, the public or our infrastructure

▪failure to respond effectively to catastrophic events 

The occurrence of any of these events could affect supply and demand for electricity, natural gas or other forms of energy, cause unplanned outages, damage our assets and/or operations or those of third parties on which our businesses rely, damage property owned by customers or others, and cause personal injury or death. In addition