SAN DIEGO GAS & ELECTRIC CO
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
SRE$78.17-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001032208-26-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewResults of Operations by RegistrantSempraSDG&ESoCalGasCapital Resources and LiquidityCritical Accounting EstimatesNew Accounting StandardsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001032208-26-000045
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewResults of Operations by RegistrantSempraSDG&ESoCalGasCapital Resources and LiquidityCritical Accounting EstimatesNew Accounting StandardsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 363 previous paragraphs and 535 current paragraphs.
188 unchanged; 108 reworded; 203 added; 59 removed; 8 previous and 36 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (203)
Current report
In the three months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $38 million (15%) was primarily due to:
Current report
▪$13 million higher electric transmission margin, including favorable impact from the retroactive application of the June 2026 FERC-approved TO6 settlement
Current report
In the six months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $34 million (3%) was primarily due to:
Current report
▪$17 million higher electric transmission margin, including favorable impact from the retroactive application of the June 2026 FERC-approved TO6 settlement
Current report
◦the surcharge resulting from the comprehensive base rate review, reflecting the difference between newly approved rates and previously effective rates for the period from January 1, 2026 to June 1, 2026
Current report
▪higher depreciation expense and interest expense associated with increases in invested capital
Current report
In the six months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $163 million (46%) was due to higher equity earnings from Oncor Holdings driven by:
Current report
◦the surcharge resulting from the comprehensive base rate review, reflecting the difference between newly approved rates and previously effective rates for the period from January 1, 2026 to June 1, 2026
Current report
▪higher depreciation expense and interest expense associated with increases in invested capital
Current report
In the three months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $158 million was primarily due to:
Current report
▪$46 million from $20 million income tax benefit in 2026 compared to $26 million income tax expense in 2025 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:
Current report
◦$21 million income tax benefit in 2026 to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners
Current report
▪$26 million higher income tax expense primarily from other outside basis differences and changes in tax allocations between Sempra Infrastructure and Parent and other
Current report
▪$11 million lower revenues driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
Current report
In the six months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $274 million was primarily due to:
Current report
▪$92 million from asset and supply optimization driven by higher unrealized gains on commodity derivatives due to changes in natural gas prices and optimization of transport and storage contracts
Current report
▪$81 million from $55 million income tax benefit in 2026 compared to $26 million income tax expense in 2025 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:
Current report
◦$54 million income tax benefit in 2026 to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners
Current report
▪$39 million favorable impact from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives, comprised of a $52 million unfavorable impact in 2026 compared to a $91 million unfavorable impact in 2025
Current report
▪$31 million from income tax expense in 2026 compared to income tax benefit in 2025 primarily from other outside basis differences and changes in tax allocations between Sempra Infrastructure and Parent and other
Current report
▪$24 million lower revenues driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
Current report
▪$9 million higher income tax benefits primarily from changes in tax allocations between Sempra Infrastructure and Parent and other
Current report
▪$17 million higher income tax benefits primarily from changes in tax allocations between Sempra Infrastructure and Parent and other
Current report
▪$121 million decrease in cost of natural gas sold, which we discuss below
Current report
▪$45 million lower revenues from a $22 million credit in 2026 compared to a $23 million cost in 2025 for the non-service components of net periodic benefit cost, which fully offsets in other income, net
Current report
▪$24 million higher regulatory revenues primarily from lower gas repairs tax benefits
Showing the first 40 of 203 passages. Open the source sections for the rest.
Removed paragraphs (59)
Previous report
▪$34 million lower income tax benefits primarily from flow-through items
Previous report
▪higher interest expense and depreciation expense associated with increases in invested capital
Previous report
In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $116 million was primarily due to:
Previous report
▪$35 million net income tax benefit in 2026 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:
Previous report
◦$33 million net income tax benefit to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners
Previous report
▪$9 million from revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
Previous report
▪$164 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M
Previous report
▪$155 million decrease in cost of natural gas sold, which we discuss below
Previous report
▪$29 million lower regulatory revenues associated with the acceleration of self-developed software deductions, which are offset in income tax expense
Previous report
▪$9 million lower regulatory revenues primarily from higher gas repairs tax benefits
Previous report
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of natural gas decreased by $158 million (32%) driven by Sempra California, which included:
Previous report
▪$21 million increase in cost of electric fuel and purchased power, which we discuss below
Previous report
▪$42 million lower sales to the California ISO due to lower market prices
Previous report
▪$26 million lower purchased power from the California ISO due to lower market prices
Previous report
◦$80 million from $13 million unrealized gains in 2026 compared to $67 million unrealized losses in 2025 on commodity derivatives
Previous report
▪$11 million increase at Parent and other due to a $16 million change in deferred compensation from $7 million expense in 2026 compared to $9 million benefit in 2025
Previous report
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s interest expense decreased by $51 million (12%) to $382 million due to:
Previous report
▪lower income tax benefit from lower ITCs from standalone energy storage projects
Previous report
▪$36 million net income tax benefit in 2026 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:
Previous report
◦$33 million net income tax benefit to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners
Previous report
▪$8 million from $18 million income tax benefit in 2026 compared to $10 million income tax benefit in 2025 from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives
Previous report
◦higher interest expense and depreciation expense associated with increases in invested capital
Previous report
▪$7 million at Cameron LNG JV primarily from lower interest expense and higher maintenance revenues
Previous report
▪$21 million increase in cost of electric fuel and purchased power, which we discuss below
Previous report
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:
Previous report
▪$42 million lower sales to the California ISO due to lower market prices
Previous report
▪$26 million lower purchased power from the California ISO due to lower market prices
Previous report
▪$27 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M
Previous report
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:
Previous report
▪lower income tax benefit from lower ITCs from standalone energy storage projects
Previous report
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:
Showing the first 40 of 59 passages. Open the source sections for the rest.
Reworded paragraphs (108)
Previous wording
We discuss herein Sempra’s results of operations and significant changes in earnings, revenues and costs by segment, as well as Parent and other, in the three months ended March 31, 2026 compared to the same period in 2025. We also discuss herein the impact of foreign currency and inflation rates on Sempra’s results of operations.
Current wording
We discuss herein Sempra’s results of operations and significant changes in earnings, revenues and costs by segment, as well as Parent and other, in the three months (Q2) and six months (YTD) ended June 30, 2026 compared to the same period in 2025. We also discuss herein the impact of foreign currency and inflation rates on Sempra’s results of operations.
Current wording
▪$29 million higher income tax benefits primarily from flow-through items
Previous wording
▪$38 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
Current wording
▪$59 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
Current wording
▪$5 million lower income tax benefits primarily from flow-through items
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $25 million (17%) was primarily due to higher equity earnings from Oncor Holdings driven by:
Current wording
In the three months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $138 million was due to higher equity earnings from Oncor Holdings driven by:
Previous wording
◦$3 million income tax benefit to adjust a Mexican deferred tax liability on our outside basis difference in Ecogas
Current wording
◦$25 million from $1 million income tax expense in 2026 compared to $26 million income tax expense in 2025 related to a Mexican deferred income tax liability on our outside basis difference in Ecogas
Previous wording
▪$36 million lower depreciation expense as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
Current wording
▪$37 million lower depreciation expense as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
Previous wording
▪$58 million from asset and supply optimization driven by unrealized gains on commodity derivatives in 2026 compared to unrealized losses on commodity derivatives in 2025 due to changes in natural gas prices and higher optimization of transport and storage contracts
Current wording
▪$34 million from asset and supply optimization driven by higher unrealized gains on commodity derivatives due to changes in natural gas prices and optimization of transport and storage contracts
Previous wording
▪$12 million favorable impact from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives, comprised of a $19 million favorable impact in 2026 compared to a $7 million favorable impact in 2025
Current wording
▪$27 million favorable impact from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives, comprised of a $71 million unfavorable impact in 2026 compared to a $98 million unfavorable impact in 2025
Previous wording
▪$11 million higher O&M from changes in provisions for expected credit losses
Current wording
▪$10 million lower O&M from changes in provisions for expected credit losses
Previous wording
◦$2 million income tax benefit to adjust a Mexican deferred income tax liability on our outside basis difference in Ecogas
Current wording
◦$27 million from $1 million income tax benefit in 2026 compared to $26 million income tax expense in 2025 related to a Mexican deferred income tax liability on our outside basis difference in Ecogas
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, the decrease in earnings of $4 million (1%) was primarily due to:
Current wording
In the three months ended June 30, 2026 compared to the same period in 2025, the decrease in losses of $1 million (1%) was primarily due to:
Previous wording
▪$11 million preferred dividends in 2025 prior to the redemption of series C preferred stock
Current wording
▪$11 million preferred dividends in 2025 prior to the redemption of series C preferred stock in October 2025
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, the increase in losses of $6 million (5%) was primarily due to:
Current wording
In the six months ended June 30, 2026 compared to the same period in 2025, the increase in losses of $5 million (3%) was primarily due to:
Previous wording
▪$14 million unfavorable impact from $4 million net investment losses in 2026 compared to $10 million net investment gains in 2025 on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan
Current wording
▪$11 million lower net investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s natural gas revenues decreased by $337 million (14%) driven by Sempra California, which included:
Current wording
In the three months ended June 30, 2026 compared to the same period in 2025, Sempra’s natural gas revenues decreased by $106 million (7%) driven by Sempra California, which included:
Previous wording
▪$8 million lower income tax benefits primarily from flow-through items
Current wording
▪$8 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M
Previous wording
▪$12 million lower revenues from incremental and balanced capital projects
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s electric revenues increased by $165 million (16%) driven by Sempra California, which included:
Current wording
In the three months ended June 30, 2026 compared to the same period in 2025, Sempra’s electric revenues increased by $127 million (12%) driven by Sempra California, which included:
Current wording
▪$37 million higher revenues from incremental and balanced capital projects
Previous wording
▪$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
Current wording
▪$136 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
Previous wording
▪$5 million higher purchased power primarily due to tolling agreements offset by lower utility-owned generation costs
Current wording
▪$32 million higher purchased power primarily due to changes in excess capacity sales and tolling agreements offset by lower utility-owned generation costs
Previous wording
▪$19 million revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
Current wording
▪$27 million revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
Previous wording
▪$36 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:
Current wording
▪$11 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of sales from energy-related businesses decreased by $43 million (36%) primarily due to:
Current wording
In the three months ended June 30, 2026 compared to the same period in 2025, Sempra’s cost of sales from energy-related businesses decreased by $154 million primarily due to:
Previous wording
▪$22 million unrealized losses in 2026 on commodity derivatives related to the PA LNG Phase 1 project
Current wording
▪$77 million from $75 million unrealized gains in 2026 compared to $2 million unrealized losses in 2025 on undesignated commodity derivatives related to the PA LNG Phase 1 project and ECA LNG Phase 1 project
Previous wording
▪$60 million driven by lower natural gas purchases related to asset and supply optimization
Current wording
▪$68 million driven by lower natural gas purchases related to asset and supply optimization
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s revenues from energy-related businesses increased by $25 million (7%) primarily due to:
Current wording
In the six months ended June 30, 2026 compared to the same period in 2025, Sempra’s revenues from energy-related businesses increased by $1 million primarily due to:
Previous wording
◦$41 million driven by lower natural gas prices associated with optimization of transport and storage contracts
Current wording
◦$99 million driven by lower natural gas prices associated with optimization of transport and storage contracts
Previous wording
◦$17 million higher development costs and certain non-capitalized expenses from projects under construction
Current wording
◦$19 million higher development costs and certain non-capitalized expenses from projects under construction
Previous wording
◦$18 million higher purchased services and maintenance expenses
Current wording
◦$13 million higher purchased services and maintenance expenses
Previous wording
▪$159 million decrease at Sempra California primarily due to $155 million lower expenses associated with refundable programs, which costs are recovered in revenue
Current wording
▪$5 million decrease at Sempra California primarily due to lower non-refundable operating costs
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s O&M decreased by $101 million (8%) due to:
Current wording
In the six months ended June 30, 2026 compared to the same period in 2025, Sempra’s O&M decreased by $89 million (3%) due to:
Previous wording
◦$14 million related to 2025 expected credit losses on a credit support agreement with a third-party financial institution and associated transaction fees
Current wording
◦$9 million related to 2025 expected credit losses on a credit support agreement with a third-party financial institution and associated transaction fees
Previous wording
In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s depreciation and amortization decreased by $19 million (3%) to $621 million primarily due to:
Current wording
In the three months ended June 30, 2026 compared to the same period in 2025, Sempra’s depreciation and amortization decreased by $41 million (6%) to $612 million primarily due to:
Previous wording
▪$73 million lower at Sempra Infrastructure as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
Current wording
▪$75 million lower at Sempra Infrastructure as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
Previous wording
▪$55 million higher at Sempra California due to higher utility plant rate base
Current wording
▪$33 million higher at Sempra California due to higher utility plant rate base
Showing the first 40 of 108 pairs. Open the source sections for the rest.
Rearranged current paragraphs (36)
Current report — wording carried from elsewhere
▪$21 million higher CPUC base operating margin, net of operating expenses
Current report — wording carried from elsewhere
▪$73 million lower depreciation expense as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
Current report — wording carried from elsewhere
▪$22 million preferred dividends in 2025 prior to the redemption of series C preferred stock in October 2025
Current report — wording carried from elsewhere
▪$8 million lower regulatory revenues associated with the acceleration of self-developed software deductions, which are offset in income tax expense
Current report — wording carried from elsewhere
▪$32 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense
Current report — wording carried from elsewhere
▪$11 million higher CPUC-authorized base revenues
Current report — wording carried from elsewhere
▪$18 million higher regulatory revenues associated with refundable programs, which are fully offset in O&M
Current report — wording carried from elsewhere
▪$25 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:
Current report — wording carried from elsewhere
▪$53 million revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
Current report — wording carried from elsewhere
▪$128 million driven by lower natural gas purchases related to asset and supply optimization
Current report — wording carried from elsewhere
▪$164 million decrease at Sempra California due to:
Current report — wording carried from elsewhere
◦$36 million higher development costs and certain non-capitalized expenses from projects under construction
Current report — wording carried from elsewhere
◦$31 million higher purchased services and maintenance expenses
Current report — wording carried from elsewhere
▪$148 million lower at Sempra Infrastructure as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
Current report — wording carried from elsewhere
▪$88 million higher at Sempra California due to higher utility plant rate base
Current report — wording carried from elsewhere
▪$44 million at Parent and other from higher debt balances from debt issuances and higher borrowings on commercial paper offset by higher capitalization of interest expense from projects under construction at Sempra Infrastructure
Current report — wording carried from elsewhere
◦overall higher revenues primarily attributable to:
Current report — wording carried from elsewhere
•rate updates to reflect increases in invested capital
Current report — wording carried from elsewhere
▪ $162 million at Oncor Holdings driven by:
Current report — wording carried from elsewhere
◦overall higher revenues primarily attributable to:
Current report — wording carried from elsewhere
•rate updates to reflect increases in invested capital
Current report — wording carried from elsewhere
▪$21 million at IMG due to lower income tax expense and lower interest expense
Current report — wording carried from elsewhere
In the three months ended June 30, 2026 compared to the same period in 2025, Sempra’s earnings attributable to NCI increased by $95 million to $141 million primarily due to an increase in SI Partners subsidiaries’ net income driven by higher unrealized gains on commodity derivatives and foreign currency and inflation effects on our monetary positions in Mexico.
Current report — wording carried from elsewhere
▪$17 million higher CPUC base operating margin, net of operating expenses
Current report — wording carried from elsewhere
▪$18 million higher net interest expense
Current report — wording carried from elsewhere
▪$37 million higher revenues from incremental and balanced capital projects
Current report — wording carried from elsewhere
▪$32 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense
Current report — wording carried from elsewhere
▪$11 million higher CPUC-authorized base revenues
Current report — wording carried from elsewhere
▪$18 million higher regulatory revenues associated with refundable programs, which are fully offset in O&M
Current report — wording carried from elsewhere
▪$17 million higher CPUC-authorized base revenues
Current report — wording carried from elsewhere
▪$5 million higher CPUC-authorized base revenues
Current report — wording carried from elsewhere
▪$21 million higher income tax benefits primarily from flow-through items
Current report — wording carried from elsewhere
▪$4 million higher CPUC base operating margin, net of operating expenses
Current report — wording carried from elsewhere
▪$11 million higher net interest expense
Current report — wording carried from elsewhere
In the six months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $4 million (1%) was primarily due to:
Current report — wording carried from elsewhere
As a result of satisfying all applicable criteria in June 2025, we classified Ecogas’ assets and liabilities as held for sale and ceased recording depreciation and amortization.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
▪$33 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense
Previous report — wording carried elsewhere
▪$14 million higher revenues from transmission operations
Previous report — wording carried elsewhere
▪$33 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense
Previous report — wording carried elsewhere
▪$14 million higher revenues from transmission operations
Previous report — wording carried elsewhere
▪$5 million higher net interest expense
Previous report — wording carried elsewhere
▪$6 million higher CPUC base operating margin, net of operating expenses
Previous report — wording carried elsewhere
▪$10 million higher revenues from incremental and balanced capital projects
Previous report — wording carried elsewhere
▪$75 million lower volumes driven by weather