01—Abstract
Summary
Summary of the 8-K filed November 17, 2025. Cited figures are marked; the original filing is the authoritative source.
Sempra Energy (SRE) has filed an 8-K report detailing proposed decisions from the California Public Utilities Commission (CPUC) concerning its subsidiaries, San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas).
The report highlights two key areas: SDG&E's 2024 General Rate Case (GRC) Track 2 request and the 2026 Cost of Capital proceeding for both SDG&E and SoCalGas. The proposed decisions, while not final, indicate a significant reduction in the recovery of wildfire mitigation costs for SDG&E and a slightly lower authorized return on equity for both utilities compared to current rates. For SDG&E's GRC Track 2, the CPUC's proposed decision approves approximately $1.036 billiona of the $1.472 billion requested for wildfire mitigation costs incurred from 2019-2022, with notable denials in operational and maintenance expenses.
Furthermore, the proposed decision authorizes a lower total revenue requirement for ongoing capital-related costs from 2019-2027 than what SDG&E requested. In the Cost of Capital proceeding, the proposed decision maintains current capital structures but suggests a 35 basis point reduction in the authorized return on equity for both SDG&E and SoCalGas, effective 2026 through 2028. These proposed decisions are subject to public comment and a final vote by the CPUC.
The outcomes could impact Sempra's subsidiaries' future revenue recovery and profitability. Investors should monitor the comment period and the final CPUC vote, scheduled for December 18, 2025, as these decisions will influence the financial performance of SDG&E and SoCalGas.
02—Key points
Key Highlights
- CPUC issued proposed decisions (PDs) on November 14, 2025, impacting SDG&E and SoCalGas, subsidiaries of Sempra Energy.
- For SDG&E's 2024 GRC Track 2, the PD approves $1,036 million of $1,472 million requested wildfire mitigation costs (2019-2022), denying $436 million, including significant O&M and capital costs.
- The Track 2 PD authorizes a total revenue requirement of $721 million for 2019-2027 for ongoing capital-related costs, which is $427 million lower than SDG&E's request.
- The proposed Cost of Capital decision for SDG&E and SoCalGas (2026-2028) maintains current capital structures but proposes a 35 basis point reduction in authorized return on equity for both utilities.
- Public comments on the PDs are due December 4, 2025, with reply comments due December 9, 2025.
- The earliest possible date for the CPUC to vote on these proposed decisions is December 18, 2025.
- Sempra Energy notes that these are proposed decisions and can be modified or rejected by the CPUC before becoming final.
03—Questions
Frequently Asked Questions
What is the financial impact of the CPUC's proposed decision on SDG&E's wildfire mitigation costs?
The proposed decision approves $1,036 million of the $1,472 million requested by SDG&E for wildfire mitigation costs incurred from 2019-2022. This represents a denial of $436 million, particularly in operational and maintenance (O&M) and capital costs, which could impact SDG&E's revenue recovery for these expenditures.
How will the proposed Cost of Capital decision affect SDG&E and SoCalGas?
The proposed decision suggests a 35 basis point reduction in the authorized return on common equity for both SDG&E and SoCalGas, effective from January 1, 2026, through December 31, 2028. While capital structures remain the same, this reduction in authorized return could lead to lower profitability for these subsidiaries.
When will these proposed decisions become final?
These are currently proposed decisions and are subject to public comment and a vote by the CPUC. Public comments are due by December 4, 2025, with reply comments due by December 9, 2025. The earliest scheduled CPUC meeting for a vote is December 18, 2025. The CPUC may adopt, modify, or reject these proposed decisions.
What are the key differences between the proposed decision on SDG&E's GRC Track 2 and SDG&E's request?
The proposed decision significantly reduces the amount of wildfire mitigation costs approved for recovery compared to SDG&E's request. Additionally, the total authorized revenue requirement for ongoing capital-related costs from 2019-2027 is $721 million, which is substantially lower than SDG&E's requested $1,148 million.
04—Continue