SAN DIEGO GAS & ELECTRIC CO

We discuss herein SoCalGas’ results of operations and significant changes in earnings, revenues and costs in the three 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 decrease in earnings of $19 million (4%) was primarily due to:

▪$26 million lower income tax benefits primarily from flow-through items

▪$5 million higher net interest expense

▪$6 million higher CPUC base operating margin, net of operating expenses

▪$6 million regulatory award approved by the CPUC in 2026

Natural Gas Revenues and Cost of Natural Gas

In the three months ended March 31, 2026 and 2025, SoCalGas’ average cost of natural gas per thousand cubic feet was $3.18 and $4.23, respectively. The average cost of natural gas sold at SoCalGas is impacted by market prices, as well as transportation and other charges.

In the three months ended March 31, 2026 compared to the same period in 2025, SoCalGas’ natural gas revenues decreased by $292 million (14%) to $1.7 billion primarily due to:

▪$159 million decrease in cost of natural gas sold, which we discuss below

▪$137 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M

▪$28 million lower regulatory revenues associated with the acceleration of self-developed software deductions, which are offset in income tax expense

▪$16 million lower regulatory revenues primarily from higher gas repairs tax benefits

▪$36 million higher CPUC-authorized base revenues

▪$10 million higher revenues from incremental and balanced capital projects

▪$8 million regulatory award approved by the CPUC in 2026

In the three months ended March 31, 2026 compared to the same period in 2025, SoCalGas’ cost of natural gas decreased by $159 million (38%) to $256 million due to:

▪$84 million lower average natural gas prices

▪$75 million lower volumes driven by weather

In the three months ended March 31, 2026 compared to the same period in 2025, SoCalGas’ O&M decreased by $136 million (18%) to $621 million primarily due to $137 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, SoCalGas’ income tax expense decreased by $18 million (47%) primarily due to higher income tax benefits from flow-through items.