Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 228

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 2
Chunk 228
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 changes to the Mexican Constitution to reinforce state control over strategic sectors by granting a central role to government entities like the CFE and PEMEX, which have been converted from for-profit state-owned enterprises into public state-owned enterprises. Following these constitutional reforms, in March 2025, the Mexican government adopted energy-related laws (2025 Energy Laws), including the ESL, which repealed the LIE, and the HSL, which repealed the LH. The 2025 Energy Laws increase the government’s control and participation in the energy sector and may create novel challenges for infrastructure development and operations. Like the LIE and LH, the ESL and HSL give Mexican authorities broad discretion to revoke or suspend permits under certain circumstances. In October 2025, the Mexican government enacted new regulations regarding the ESL and HSL, which provide further detail on the legal and regulatory framework of the energy sector. These new regulations provide state-owned companies preferential treatment regarding open access, increase oversight by regulators and obligations for private companies and reduce the maximum term of certain permits for new projects. For the power sector, the new regulations provide for state prevalence and additional requirements for private projects, increase oversight by regulators and sanctions and establish that self-supply permits remain valid and can migrate voluntarily to the wholesale electricity market.

Although the new laws, regulations, and certain general administrative provisions in the energy sector have been published, the extent of the impact of the 2025 Energy Laws is still uncertain. These laws and future implementation of existing and any new regulations could adversely affect Sempra Infrastructure’s ability to operate its existing assets at their current levels, result in increased costs to Sempra Infrastructure and its customers, adversely impact Sempra Infrastructure’s ability to develop new projects in Mexico, result in decreased revenues and/or cash flows, and negatively impact Sempra Infrastructure’s ability to recover the carrying values of its investments in Mexico, any of which could have a material adverse impact on Sempra’s business, results of operations, financial condition, cash flow and/or prospects.

SOURCES AND USES OF CASH

The following tables include only significant changes in cash flow activities for each of the Registrants.

CASH FLOWS FROM OPERATING ACTIVITIES(Dollars in millions)Nine months ended September 30,SempraSDG&ESoCalGas2025$3,376 $1,343 $1,426 20243,542 1,443 1,370 Change$(166)$(100)$56 Change in regulatory accounts, current and noncurrent$(534