Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 142

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 142
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 incurred in connection with a wildfire that remains under investigation, and for which the cause has not yet been conclusively determined. The administrator of the Wildfire Fund has confirmed that this wildfire qualifies as a “covered wildfire” for purposes of accessing the fund. The participating IOU has stated that it is currently unable to reasonably estimate a range of potential losses associated with this event. Accordingly, SDG&E is unable to estimate a range of potential loss resulting from any reduction in available coverage from the Wildfire Fund. 

For existing claims or new claims based on any California electric IOUs’ assets determined to be a cause of fires, including fires of the size and scope of the Eaton fire, payments of these claims 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.

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2025 Wildfire Legislation. We describe the 2025 Wildfire Legislation that was signed into law in September 2025 in Note 1 of the Notes to Condensed Consolidated Financial Statements. The 2025 Wildfire Legislation established, among other things, the Continuation Account, a new state-administered account with up to $18.0 billion of additional liquidity to reimburse catastrophic wildfire-related claims incurred by large California electric IOUs, including SDG&E, if the Wildfire Fund is depleted. The funds in the account would only be available for claims arising from wildfires that ignited on or after September 19, 2025. The 2025 Wildfire Legislation preserves key elements of the 2019 Wildfire Legislation, including cost recovery standards and requirements, a cap on liability in the event of a finding of imprudence by the CPUC, and continued access to wildfire claims liquidity through the new Continuation Account. All of California’s large electric IOUs, including SDG&E, have elected to participate in the Continuation Account.

If the Continuation Account becomes operative, it would be funded with a combination of $9.0 billion from ratepayer contributions and $9.0 billion from electric IOU shareholder contributions. Electric IOU shareholder contributions totaling $5.1 billion would be obtained through fixed annual contributions of $300 million from 2029 through 2045, plus an additional $3.9 billion in contingent shareholder contributions payable in annual installments