01—Abstract
Summary
Summary of the 8-K filed March 26, 2026. Cited figures are marked; the original filing is the authoritative source.
Sempra Energy (SRE) subsidiary San Diego Gas & Electric Company (SDG&E) has filed an unopposed offer of settlement with the Federal Energy Regulatory Commission (FERC) regarding its TO6 proceeding.
This settlement proposes an increase in SDG&E's authorized base return on equity from 10.10%a to 10.28% and establishes a hypothetical capital structure with 54% equity. This is a positive development as it provides clarity on future revenue generation for SDG&E's transmission operations. The terms of the settlement are subject to FERC approval, which is anticipated in the second half of 2026.
If approved, these changes would be retroactively effective from June 1, 2025. Crucially, Sempra expects the financial impact of this settlement to fall within its previously announced 2026 and 2027 earnings-per-common-share (EPS) guidance ranges, indicating no negative surprise to near-term earnings expectations.
02—Key points
Key Highlights
- SDG&E has filed an unopposed offer of settlement in its TO6 FERC proceeding.
- The settlement proposes an increase in SDG&E's authorized base return on equity to 10.28% (from 10.10%).
- A hypothetical capital structure with 54% equity is established as part of the settlement.
- FERC approval of the settlement is expected in the second half of 2026.
- If approved, the settlement terms would be effective retroactively to June 1, 2025.
- Sempra anticipates the settlement's impact on EPS to be within existing 2026 and 2027 guidance ranges.
03—Questions
Frequently Asked Questions
What is the TO6 proceeding and why is it important?
The TO6 proceeding is a regulatory process where the Federal Energy Regulatory Commission (FERC) establishes San Diego Gas & Electric Company's (SDG&E) Electric Transmission Owner Formula Rate. This rate determines the parameters for how SDG&E quantifies its costs for owning, operating, and maintaining its FERC-jurisdictional transmission facilities, directly impacting its revenue from these operations.
What are the key terms of the proposed settlement?
The key terms include an increase in SDG&E's authorized base return on equity from 10.10% to 10.28% and the establishment of a hypothetical capital structure with 54% equity. These terms are subject to FERC approval.
When is the settlement expected to be approved and effective?
FERC approval is expected in the second half of 2026. If approved, the settlement terms will be effective retroactively to June 1, 2025.
What is the expected financial impact of this settlement on Sempra's earnings?
Sempra expects the financial impact of these settlement terms on its diluted earnings-per-common-share (EPS) to fall within its previously announced 2026 and 2027 EPS guidance ranges. This suggests no adverse surprises to near-term earnings expectations from this regulatory filing.
04—Continue