Summary
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% 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.
Key Highlights
- 1SDG&E has filed an unopposed offer of settlement in its TO6 FERC proceeding.
- 2The settlement proposes an increase in SDG&E's authorized base return on equity to 10.28% (from 10.10%).
- 3A hypothetical capital structure with 54% equity is established as part of the settlement.
- 4FERC approval of the settlement is expected in the second half of 2026.
- 5If approved, the settlement terms would be effective retroactively to June 1, 2025.
- 6Sempra anticipates the settlement's impact on EPS to be within existing 2026 and 2027 guidance ranges.