SAN DIEGO GAS & ELECTRIC CO

We discuss herein SDG&E’s results of operations and significant changes in earnings, revenues and costs in thethree months ended March 31, 2026 compared to the same period in 2025.

RESULTS OF OPERATIONS

(Dollars in millions)

In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $15 million (5%) was primarily due to:

▪$32 million higher CPUC base operating margin, net of operating expenses, including $43 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD

▪$9 million higher net interest expense

▪$8 million lower income tax benefits primarily from flow-through items

Electric Revenues and Cost of Electric Fuel and Purchased Power

In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s electric revenues increased by $164 million (15%) to $1.2 billion primarily due to:

•$99 million higher revenues from incremental and balanced capital projects, including $59 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD

▪$33 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense

▪$21 million increase in cost of electric fuel and purchased power, which we discuss below

▪$14 million higher revenues from transmission operations

▪$9 million higher regulatory revenues associated with refundable programs, which are fully offset in O&M

In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s cost of electric fuel and purchased power increased by $21 million (29%) to $94 million primarily due to:

▪$42 million lower sales to the California ISO due to lower market prices

▪$5 million higher purchased power primarily due to tolling agreements offset by lower utility-owned generation costs

▪$26 million lower purchased power from the California ISO due to lower market prices

Natural Gas Revenues and Cost of Natural Gas

In the three months ended March 31, 2026 and 2025, SDG&E’s average cost of natural gas per thousand cubic feet was $7.59 and $5.69, respectively. The average cost of natural gas sold at SDG&E is impacted by market prices, as well as transportation, tariff and other charges.

In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s natural gas revenues decreased by $37 million (10%) to $319 million primarily due to:

▪$27 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M

▪$12 million lower revenues from incremental and balanced capital projects

In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s cost of natural gas increased by $3 million (3%) to $90 million due to:

▪$23 million higher average natural gas prices

▪$20 million lower volumes driven by weather

In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s O&M decreased by $17 million (4%) to $423 million primarily due to $18 million lower expenses associated with refundable programs, which costs are recovered in revenue.

In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s income tax expense increased by $55 million primarily due to:

▪lower income tax benefit from lower ITCs from standalone energy storage projects

▪higher pretax income

▪lower income tax benefits from flow-through items