Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 501

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 501
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 Includes $76 in 2025, $75 in 2026, $76 in 2027, $75 in each of 2028 and 2029, and $525 thereafter related to PPAs. (2)     Substantially all amounts are related to PPAs.

Leases That Have Not Yet CommencedSDG&E has entered into four PPAs, of which SDG&E expects two will commence in 2025 and two will commence in 2026. SDG&E expects the future minimum lease payments to be $16 million in 2025, $41 million in 2026, $43 million each of 2027 through 2029 and $459 million thereafter (through expiration in 2041).SoCalGas has entered into a lease agreement for a new headquarters office space in Los Angeles that it expects will commence in 2026. In 2024, SoCalGas prepaid $1 million and expects the future minimum lease payments to be $8 million in 2028, $9 million in 2029 and $134 million thereafter (through expiration in 2041).Sempra Infrastructure has entered into a lease agreement for tugboat services for the PA LNG Phase 1 project that it expects will commence in 2027. Sempra Infrastructure expects the future minimum lease payments to be $10 million in 2027, $12 million, in each of 2028 and 2029 and $198 million thereafter (through expiration in 2047, exclusive of certain renewal options) and total future minimum fixed payments for operation and maintenance services to be $184 million.

Lessor AccountingSempra Infrastructure is a lessor for certain of its natural gas and ethane pipelines, compressor stations, LPG storage facilities, a rail facility and refined products terminals, which we account for as operating or sales-type leases. These leases expire at various dates from 2025 through 2042.Over the lease term, we monitor the underlying assets in operating leases for impairment, and we evaluate the net investment in sales-type leases for expected credit losses. Sempra Infrastructure expects to continue to derive value from the underlying assets associated with its pipelines following the end of their respective lease terms based on the expected remaining useful life, expected market conditions and plans to re-market and re-contract the underlying assets.Generally, we recognize operating lease income on a straight-line basis over the lease term, and sales-type lease income based on the effective interest method over the lease term