Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 207

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 2
Chunk 207
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 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 of $780 million. SDG&E’s proportionate share of the aggregate shareholder contribution amount through 2045 is expected to be $387 million, comprising (i) $219.3 million of fixed contributions of $12.9 million annually for 17 years, and (ii) $167.7 million of contingent contributions of $33.5 million annually for five years.

The 2025 Wildfire Legislation establishes a multi-stakeholder task force, coordinated by the Wildfire Fund’s administrator, to prepare and submit to the California legislature and Governor of California on or before April 1, 2026, a report that evaluates and sets forth recommendations on new models to complement or replace the Wildfire Fund. If the Wildfire Fund and the Continuation Account, if it becomes operative, are materially diminished, exhausted or terminated, SDG&E would lose the protection afforded by these funds, and as a consequence, a fire in any California electric IOUs’ service territory could have a material adverse effect on SDG&E’s and Sempra’s results of operations, financial condition, cash flows and/or prospects.

FERC Rate Matters

SDG&E files separately with the FERC for its authorized transmission revenue requirement and ROE on FERC-regulated electric transmission operations and assets.

TO5 Settlement. SDG&E’s authorized TO5 settlement provided for an ROE of 10.60%, consisting of a base ROE of 10.10% plus the California ISO adder. In December 2024, the FERC issued an order, which SDG&E has appealed, finding that SDG&E is not eligible