Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 77

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 77
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 Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. Because unrealized gains and losses are recorded as regulatory assets and liabilities, they do not affect earnings. Inputs used to determine the fair value of CRRs are reviewed and compared with market conditions to determine reasonableness.

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CRRs are recorded at fair value based almost entirely on the most current auction prices published by the California ISO, an objective source. Annual auction prices are published once a year, typically in the middle of November, and are the basis for valuing CRRs settling in the following year. For the CRRs settling from January 1 to December 31, the auction price inputs, at a given location, were in the following ranges for the years indicated below:CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTSSettlement yearPrice per MWhMedian price per MWh2025$(7.38)to$15.54 $0.01 2024(3.69)to9.55 (0.44)The impact associated with discounting is not significant. Because these auction prices are a less observable input, these instruments are classified as Level 3. The fair value of these instruments is derived from auction price differences between two locations. Positive values between two locations represent expected future reductions in congestion costs, whereas negative values between two locations represent expected future charges. Valuation of our CRRs is sensitive to a change in auction price. If auction prices at one location increase (decrease) relative to another location, this could result in a significantly higher (lower) fair value measurement. We summarize CRR volumes in Note 8.Other SempraThe table below sets forth reconciliations of changes in the fair value of Sempra’s Support Agreement for the benefit of CFIN classified as Level 3 in the fair value hierarchy.LEVEL 3 RECONCILIATIONS(Dollars in millions)Three months ended September 30, 20252024Balance at July 1$39 $23 Realized and unrealized gains (losses), net(1)2 3 Settlements(2)(2)Balance at September 30(2)$39 $24 Change in unrealized gains (losses) relating to instruments still held at September 30$2 $3 Nine months ended September 30,20252024Balance at January 1$25 $23 Realized and unrealized gains (losses),