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 (Q3) and nine months (YTD) ended September 30, 2026 compared to the same periods in 2025.

RESULTS OF OPERATIONS

(Dollars in millions)

In the three months ended September 30, 2026 compared to the same period in 2025, the increase in earnings of $52 million (16%) was primarily due to:

▪$67 million credit in 2026 from regulatory disallowances, net, related to prior years, which we discuss in Note 4 of the Notes to Condensed Financial Statements

▪$21 million higher CPUC base operating margin, net of operating expenses, including a $5 million credit in 2026 from regulatory disallowances, net

▪$8 million higher electric transmission margin

▪$29 million lower income tax benefits primarily from flow-through items, including impacts from the election in 2025 to accelerate self-developed software deductions

▪$6 million lower net regulatory interest income

▪$5 million higher net interest expense

In the nine months ended September 30, 2026 compared to the same period in 2025, the increase in earnings of $82 million (11%) was primarily due to:

▪$70 million higher CPUC base operating margin, net of operating expenses, including $47 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD and a $5 million credit in 2026 from regulatory disallowances, net

▪$67 million credit in 2026 from regulatory disallowances, net, related to prior years

▪$25 million higher electric transmission margin, including favorable impact from the retroactive application of the June 2026 FERC-approved TO6 settlement

▪$29 million lower income tax benefits primarily from flow-through items

▪$23 million higher net interest expense

▪$11 million lower AFUDC equity

▪$7 million lower net regulatory interest income

Electric Revenues and Cost of Electric Fuel and Purchased Power

In the three months ended September 30, 2026 compared to the same period in 2025, SDG&E’s electric revenues increased by $131 million (10%) to $1.4 billion due to:

▪$35 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are fully offset in income tax (expense) benefit

▪$33 million increase in cost of electric fuel and purchased power, which we discuss below

▪$32 million higher revenues from incremental and balanced capital projects, including $6 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD

▪$17 million higher CPUC-authorized base revenues

▪$15 million higher revenues from transmission operations

▪$14 million higher regulatory revenues from the election in 2025 to accelerate self-developed software deductions, which are fully offset in income tax (expense) benefit

▪$15 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M

In the three months ended September 30, 2026 compared to the same period in 2025, SDG&E’s cost of electric fuel and purchased power increased by $33 million (24%) to $168 million due to:

▪$60 million higher purchased power primarily due to changes in excess capacity sales and tolling agreements and higher utility-owned generation costs

▪$13 million higher purchased power from the California ISO due to higher market prices

▪$40 million higher sales to the California ISO due to higher market prices

In the nine months ended September 30, 2026 compared to the same period in 2025, SDG&E’s electric revenues increased by $424 million (13%) to $3.8 billion primarily due to:

•$168 million higher revenues from incremental and balanced capital projects, including $65 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD

•$100 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are fully offset in income tax (expense) benefit

▪$83 million increase in cost of electric fuel and purchased power, which we discuss below

▪$41 million higher revenues from transmission operations, including favorable impact from the retroactive application of the June 2026 FERC-approved TO6 settlement

▪$34 million higher CPUC-authorized base revenues

In the nine months ended September 30, 2026 compared to the same period in 2025, SDG&E’s cost of electric fuel and purchased power increased by $83 million (26%) to $397 million primarily due to:

▪$92 million higher purchased power primarily due to changes in excess capacity sales and tolling agreements offset by lower utility-owned generation costs

▪$12 million lower sales to the California ISO due to lower market prices

▪$20 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 September 30, 2026 and 2025, SDG&E’s average cost of natural gas per thousand cubic feet was $6.73 and $6.30, respectively. In the nine months ended September 30, 2026 and 2025, SDG&E’s average cost of natural gas per thousand cubic feet was $5.49 and $5.16, 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 September 30, 2026, SDG&E’s natural gas revenues and cost of natural gas were consistent with the same period in 2025.

In the nine months ended September 30, 2026 compared to the same period in 2025, SDG&E’s natural gas revenues decreased by $61 million (8%) to $739 million primarily due to:

▪$36 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M

▪$20 million decrease in cost of natural gas sold, which we discuss below

▪$16 million lower revenues from incremental and balanced capital projects

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

▪$7 million higher CPUC-authorized base revenues

In the nine months ended September 30, 2026 compared to the same period in 2025, SDG&E’s cost of natural gas decreased by $20 million (11%) to $155 million due to:

▪$29 million lower volumes driven by weather

▪$9 million higher average natural gas prices

In the three months ended September 30, 2026 compared to the same period in 2025, SDG&E’s O&M decreased by $13 million (3%) to $438 million primarily due to lower expenses associated with refundable programs, which costs are recovered in revenue.

In the nine months ended September 30, 2026 compared to the same period in 2025, SDG&E’s O&M decreased by $26 million (2%) remaining at $1.3 billion primarily due to lower expenses associated with refundable programs, which costs are recovered in revenue.

Regulatory Disallowances, Net

As we discuss in Note 4 of the Notes to Condensed Financial Statements, SDG&E recorded a credit in the third quarter of 2026 from regulatory disallowances, net, of $104 million ($72 million after tax), of which $98 million ($67 million after tax) relates to prior years and $6 million ($5 million after tax) relates to 2026.

Other Income, Net

In the three months ended September 30, 2026 compared to the same period in 2025, SDG&E’s other income, net, decreased by $8 million (25%) to $24 million primarily due to lower net interest income on regulatory balancing accounts.

In the nine months ended September 30, 2026 compared to the same period in 2025, SDG&E’s other income, net, decreased by $17 million (17%) to $86 million primarily due to:

▪$11 million lower AFUDC equity

▪$9 million lower net interest income on regulatory balancing accounts

▪$7 million higher non-service components of net periodic benefit cost

In the three months and nine months ended September 30, 2026 compared to the same periods in 2025, SDG&E had an income tax expense compared to income tax benefit primarily due to:

▪$31 million income tax expense in 2026 from a credit to regulatory disallowances, net, related to prior years