Summary
Sempra Energy (SRE) has filed an 8-K report detailing outcomes from recent California Public Utilities Commission (CPUC) proceedings. The CPUC has approved a final decision in the 2026 Cost of Capital proceeding for subsidiaries SDG&E and SoCalGas, which includes a slight improvement with a 5 basis point increase in the authorized return on equity, keeping other aspects consistent with the previously issued proposed decision. However, the report also highlights a significant development regarding SDG&E's Track 2 request in its 2024 General Rate Case. The CPUC did not vote on the proposed decision for this request, which is estimated to result in a substantial $471 million after-tax charge to Sempra's earnings in the fourth quarter of 2025. This charge encompasses amounts related to 2019-2024, as well as the first three quarters of 2025. Despite this significant charge, Sempra is guiding to the high end of its previously announced full-year 2025 adjusted EPS guidance range, and has updated its GAAP EPS guidance range to reflect the estimated impact.
Key Highlights
- 1CPUC approved a Final Decision in the 2026 Cost of Capital proceeding for SDG&E and SoCalGas, authorizing a return on equity 5 basis points higher than the proposed decision.
- 2The CPUC did not vote on the Proposed Decision for SDG&E's Track 2 request in its 2024 General Rate Case.
- 3An estimated $471 million after-tax charge is expected in Q4 2025 due to the Track 2 Proposed Decision, covering periods from 2019-2024 and Q1-Q3 2025.
- 4Sempra is guiding to the high end of its previously announced full-year 2025 adjusted diluted EPS guidance ($4.30-$4.70), incorporating the estimated charge.
- 5Sempra updated its full-year 2025 GAAP EPS guidance to a range of $2.38-$2.78, reflecting the estimated charge.
- 6Full-year 2026 adjusted EPS guidance of $4.80-$5.30 is affirmed, factoring in the Cost of Capital FD and the Track 2 PD impacts.