Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 339

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 339
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 of rate regulation as a critical audit matter due to the high degree of subjectivity involved in assessing the impact of regulatory orders and future actions by the Commissions on the financial statements. Management’s judgments include assessing the likelihood of (1) the recovery in future rates of incurred costs and (2) potential refunds to customers. Auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

2024 Form 10-K  |  F-6

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the application of specialized rules to account for the effects of cost-based rate regulation and the uncertainty of future decisions by the Commissions included the following, among others:

▪We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs deferred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls over the initial recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.

▪We read relevant regulatory orders issued by the Commissions for SoCalGas and other publicly available information to assess the likelihood of recovery in future rates, or of a future reduction in rates, based on precedents of the Commissions’ treatment of similar costs under similar circumstances. 

▪We evaluated the external information and compared it to management’s recorded regulatory asset and liability balances for completeness.

▪We evaluated SoCalGas’ disclosures related to the impacts of rate regulation.

/s/ DELOITTE & TOUCHE LLP

San Diego, California

February 25, 2025

We have served as SoCalGas’ auditor since 1937.

2024 Form 10-K  |  F-7

SEMPRACONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in millions, except per share amounts; shares in thousands) Years ended December 31, 202420232022REVENUES Utilities:Natural gas$7,141 $9,495 $7,868 Electric4,296 4,334 4,783 Energy-related businesses1,748 2,891 1,788 Total revenues13,185 16,720 14,439 EXPENSES AND OTHER INCOME Utilities: Cost of