Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 115

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 115
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 Risks

We face risks related to failures and delays in obtaining and maintaining permits, licenses, franchises and other approvals required by our businesses.

The industries in which we operate are subject to extensive regulation, and our businesses require numerous permits, licenses, rights-of-way, franchises, certificates and other approvals from federal, state, local and foreign governmental agencies. These approvals may not be granted in a timely manner (including due to potential staffing issues at U.S. regulatory agencies) or at all or may be modified, rescinded or fail to be extended for a variety of reasons, including due to legal or regulatory changes or political considerations. The City of San Diego is studying the feasibility of municipalization as a potential alternative to SDG&E’s existing electric franchise agreement, and various aspects of SDG&E’s natural gas and electric franchise agreements have also been challenged in two lawsuits that we discuss in Note 15 of the Notes to the Consolidated Financial Statements. At Sempra Infrastructure, amendments to Mexico’s Constitution and to Mexico’s Electricity Industry Law have the potential to increase government control and participation in the energy sector and may require the CRE to revoke Sempra Infrastructure’s self-supply permits deemed improperly obtained under a legal standard that is ambiguous and not well defined under the law. Obtaining or maintaining required approvals could result in higher costs or the imposition of conditions or restrictions on our operations. Further, noncompliance by us or certain of our customers with the terms of these approvals could result in their modification, suspension or rescission and subject us to lost revenue, fines and penalties. If any of these approvals are suspended, rescinded or otherwise terminated or modified in a manner that makes our continued operation of the applicable business prohibitively expensive or otherwise impracticable, we may be required to adjust or temporarily or permanently cease certain of our operations, sell the associated assets or remove them from service and/or construct new assets intended to bypass the impacted area, in which case we may lose some of our rate base or revenue-generating assets, our development projects may be negatively affected and we may incur impairment charges or other costs that may not be recoverable. The occurrence of any of these events could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

From time to time, we invest funds in projects prior to receiving all regulatory approvals. We may be unable to recover any or all amounts invested in such projects if: 

▪there is a delay in obtaining these approvals 

▪any approval is conditioned on changes or other requirements that increase costs or