SEMPRA (SRE) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that SEMPRA surfaced in its latest filing.

• Planned sale of 45% of equity interest in Sempra Infrastructure Partners (SI Partners), expected to close in second or third quarter of 2026.second or third quarter of 2026
• As of February 26, 2026, 4,996,591 shares remain subject to future settlement under existing forward sale agreements.February 26, 2026
• Recent contractor fatalities on certain Sempra Infrastructure projects under construction.
• SDG&E's collective bargaining agreements expire in August 2026.August 2026
• In 2018, U.S. imposed tariffs on certain steel and aluminum imports and on Chinese imports, which remain in effect.2018
• In January 2025, U.S. Administration announced new and increased tariffs, including higher tariffs on Chinese goods and other imports.January 2025
• U.S. Administration imposed new tariffs on Mexico and Canada; additional tariffs threatened in connection with planned joint review of USMCA in 2026.2026
• U.S. Administration expanded 2018 steel and aluminum tariffs to previously excluded countries/products, increased rates, and imposed tariffs on certain copper products.2018
• China announced a tariff on U.S. LNG.
• Mexican government announced it may implement retaliatory tariffs in response to U.S. tariffs.
• Delay or default in payment by a customer at SI Partners resulted in recording provision for expected credit losses and lower revenues in 2024 and 2025.2024 and 2025
• S&P revised Sempra's outlook to negative from stable and downgraded SoCalGas' issuer credit rating in January 2025.January 2025
• Moody's revised Sempra's outlook to negative from stable in March 2025.March 2025
• Partial termination of Sempra's pension plan in connection with planned sale of portion of equity interest in SI Partners could affect benefit costs.
• City of San Diego studying feasibility of municipalization as alternative to SDG&E's existing electric franchise agreement.
• Amendments to Mexico's Constitution and 2025 Energy Laws have increased government control in energy sector, affecting SI Partners.2025
• Sempra aims net-zero scope 1 and 2 GHG emissions by 2050, 50% reduction by 2035 relative to 2019 baseline (for Sempra California and Sempra Infrastructure Mexico non-LNG), subject to revision if planned sale of SI Partners interest completed.2050
• Approximately 28,000 proofs of claim filed asserting future asbestos-exposure lawsuits related to power plants designed/built by predecessors acquired with Oncor interest.
• Nationwide strike by Mexican judiciary in 2024 in response to judicial reforms could cause delays, increased costs, or unfavorable outcomes.2024
• Limitations on operations of U.S. federal courts in 2025 due to lapses in congressional appropriations could cause delays, increased costs, or unfavorable outcomes.2025
• The LA Fires (Palisades and Eaton) burned in SoCalGas' service territory, destroying ~16,200 structures and damaging ~2,000 structures, causing service disruptions, response costs, and damage to SoCalGas infrastructure and third-party property.
• SoCalGas and Sempra face pending litigation regarding operation of SoCalGas' system and damage from the LA Fires, as discussed in Note 16.
• The 2019 Wildfire Legislation established the Wildfire Fund, and the 2025 Wildfire Legislation established the Continuation Account, for reimbursing wildfire claims of participating California electric IOUs above $1 billion, subject to fund coverage.2019 and 2025
• In February 2026, a participating IOU disclosed ~$1.26 billion in expected reimbursements from the Wildfire Fund for 2019 and 2021 wildfires; another IOU disclosed ~$134 million expected for one LA Fire.February 2026
• Administrator of Wildfire Fund confirmed the LA Fire qualifies as a covered wildfire; damages could materially reduce or exhaust the Fund.
• The 2025 Wildfire Legislation established a multi-stakeholder task force to report by April 1, 2026, on new models to complement/replace Wildfire Fund and Continuation Account.April 1, 2026
• SDG&E's TO5 settlement provided ROE of 10.60% (10.10% base + California ISO adder); in December 2024, FERC found SDG&E ineligible for adder and required refund retroactive to June 1, 2019. SDG&E appealed.December 2024
• In October 2024, SDG&E submitted TO6 filing proposing ROE increase to 11.75% base + California ISO adder (total 12.25%); FERC accepted subject to refund, suspended effective date to June 1, 2025, disallowed adder; SDG&E appealed. In February 2026, settlement judge reported agreement in principle.February 2026
• SDG&E's Track 2 request in its 2024 GRC resulted in disallowance of incurred costs.2024
• Net Billing Tariff implemented in December 2023 for customers interconnecting after April 2023, revising NEM structure.December 2023
• Residential fixed charge (income-based) implemented in fourth quarter of 2025 under 2022 California legislation.fourth quarter of 2025
• Oncor anticipates filing a UTM on or after March 16, 2026, for eligible investments placed into service after December 31, 2024, through December 31, 2025.March 16, 2026
• Legislation signed in June 2025 reduced regulatory lag through the UTM process for transmission and distribution capital investments.June 2025
• S&P lowered Oncor's senior secured debt and commercial paper ratings in July 2025 due to elevated wildfire risk and lack of certain legal protections for wildfire litigation in Texas.July 2025
• EFH's 2016 spin-off of Vistra intended to qualify for partially tax-free treatment; EFH received private letter ruling from IRS and supplemental ruling in connection with 2018 merger with Sempra subsidiary.2016
• Opposition by some Yaqui tribe members to construction of Guaymas-El Oro segment of Sonora pipeline.
• Proposed Cameron LNG Phase 2 project requires unanimous consent of all members under JV project financing agreements for Cameron LNG Phase 1 facility.
• In September 2025, SI Partners submitted filing with DOE to extend construction deadline for non-FTA permits for ECA LNG Phase 1 until end of summer 2026.September 2025
• ECA Regas Facility has firm storage and nitrogen injection service agreement with Shell expiring in May 2028; construction of proposed ECA LNG Phase 2 would conflict with current operations.May 2028
• CRNCI at SI Partners may become redeemable if certain triggers occur, including failure to complete construction by specified date, sustained priority distributions above thresholds, termination of LNG offtake contracts not replaced, material breach of affiliate contracts, or certain monetization events (e.g., third-party sale of PA2 JVCo).