Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 347

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 347
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 for SoCalGas that we describe below. In addition to the changes in cost or market prices, natural gas or electric revenues recorded during a period are impacted by the difference between customer billings and recorded or CPUC-authorized amounts. These differences are required to be balanced over time, resulting in over- and undercollected regulatory balancing accounts. We discuss balancing accounts and their effects further in Note 4 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.

In the three months ended September 30, 2025 compared to the same period in 2024, the increase in earnings of $123 million (50%) was primarily due to:

▪$92 million higher income tax benefits primarily from flow-through items, including impacts from the election to accelerate self-developed software deductions, and from the resolution of prior year income tax items

▪$47 million higher CPUC base operating margin, net of operating expenses including higher depreciation and $9 million lower authorized cost of capital. In the first three quarters of 2024, Sempra California recorded CPUC-authorized base revenues based on 2023 authorized levels

Offset by:

▪$16 million higher net interest expense

In the nine months ended September 30, 2025 compared to the same period in 2024, the increase in earnings of $208 million (18%) was primarily due to:

▪$134 million higher income tax benefits primarily from flow-through items, including gas repairs tax benefits (which in the first three quarters of 2024 were recorded as a regulatory liability that was released in the fourth quarter of 2024 as a result of the 2024 GRC FD) and impacts from the election to accelerate self-developed software deductions, and from the resolution of prior year income tax items

▪$119 million higher CPUC base operating margin, net of operating expenses including higher depreciation and $31 million lower authorized cost of capital. In the first three quarters of 2024, Sempra California recorded CPUC-authorized base revenues based on 2023 authorized levels

▪$10 million regulatory award approved by the CPUC in 2025

▪$7 million higher net regulatory interest income

▪$7 million higher electric transmission margin

Offset by:

▪$48 million higher net interest expense

▪$25 million from disallowed regulatory recovery of COVID-19 costs

Sempra Texas Utilities

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