Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 288

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 288
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54

CPUC COST OF CAPITALA CPUC cost of capital proceeding every three years determines a utility’s authorized capital structure and authorized return on rate base. The CCM applies in the interim years and considers changes in the cost of capital based on changes in interest rates based on the applicable utility bond index published by Moody’s (the CCM benchmark rate) for each 12-month period ending September 30 (the measurement period). The index applicable to SDG&E and SoCalGas is based on each utility’s credit rating. The CCM benchmark rate is the basis of comparison to determine if the CCM is triggered in each measurement period, which occurs if the change in the applicable Moody’s utility bond index relative to the CCM benchmark rate is larger than plus or minus 1.00% for the measurement period. The CCM, if triggered, would automatically update the authorized cost of debt based on actual costs and update the authorized ROE upward or downward by 20% of the difference between the CCM benchmark rate and the applicable Moody’s utility bond index, subject to regulatory approval. Alternatively, SDG&E and SoCalGas are each permitted to file a cost of capital application to have its cost of capital determined in lieu of the CCM in an interim year in which an extraordinary or catastrophic event materially impacts its cost of capital and affects utilities differently than the market as a whole.The following table summarizes the CPUC-approved cost of capital for SDG&E and SoCalGas. The authorized weighting remained unchanged for each of the years presented. AUTHORIZED COST OF CAPITALAuthorized weighting2024202520242025Return on rate baseWeighted return on rate baseSDG&E:Long-Term Debt45.25 %4.34 %4.34 %1.96 %1.96 %Preferred Equity2.75 6.22 6.22 0.17 0.17 Common Equity52.00 10.65 10.23 5.54 5.32 100.00 %7.67 %7.45 %SoCalGas:Long-Term Debt45.60 %4.54 %4.63 %2.07 %2.11 %Preferred Equity2.40 6.00 6.00 0.14 0.14 Common Equity52.00 10.50 10.08 5.46 5.24 100.00 %7.67