REGULATORY MATTERS (Tables)

9 Months Ended

Sep. 30, 2020

Regulated Operations [Abstract]

Schedule of Regulatory Assets

We show the details of regulatory assets and liabilities in the following table.

REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	September 30, 2020		December 31, 2019
SDG&E:
Fixed-price contracts and other derivatives	$	(21)	$	8
Deferred income taxes refundable in rates	(20)		(108)
Pension and other postretirement benefit plan obligations	72		103
Removal obligations	(2,131)		(2,056)
Environmental costs	43		45
Sunrise Powerlink fire mitigation	120		121
Regulatory balancing accounts(1)(2)
Commodity – electric	173		102
Gas transportation	15		22
Safety and reliability	74		77
Public purpose programs	(146)		(124)
2019 GRC retroactive impacts	70		111
Other balancing accounts	284		106
Other regulatory assets (liabilities), net(2)	25		(153)
Total SDG&E	(1,442)		(1,746)
SoCalGas:
Deferred income taxes refundable in rates	(125)		(203)
Pension and other postretirement benefit plan obligations	370		400
Employee benefit costs	44		44
Removal obligations	(698)		(728)
Environmental costs	37		40
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportation	(118)		(118)
Safety and reliability	358		295
Public purpose programs	(349)		(273)
2019 GRC retroactive impacts	252		400
Other balancing accounts	(116)		(7)
Other regulatory assets (liabilities), net(2)	46		(101)
Total SoCalGas	(299)		(251)
Sempra Mexico:
Deferred income taxes recoverable in rates	83		83
Other regulatory assets	1		6
Total Sempra Energy Consolidated	$	(1,657)	$	(1,908)

(1)    At September 30, 2020 and December 31, 2019, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $127 million and $108 million, respectively, and for SoCalGas was $291 million and $500 million, respectively.

(2)    Includes regulatory assets earning a return.

Schedule of Regulatory Liabilities

We show the details of regulatory assets and liabilities in the following table.

REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	September 30, 2020		December 31, 2019
SDG&E:
Fixed-price contracts and other derivatives	$	(21)	$	8
Deferred income taxes refundable in rates	(20)		(108)
Pension and other postretirement benefit plan obligations	72		103
Removal obligations	(2,131)		(2,056)
Environmental costs	43		45
Sunrise Powerlink fire mitigation	120		121
Regulatory balancing accounts(1)(2)
Commodity – electric	173		102
Gas transportation	15		22
Safety and reliability	74		77
Public purpose programs	(146)		(124)
2019 GRC retroactive impacts	70		111
Other balancing accounts	284		106
Other regulatory assets (liabilities), net(2)	25		(153)
Total SDG&E	(1,442)		(1,746)
SoCalGas:
Deferred income taxes refundable in rates	(125)		(203)
Pension and other postretirement benefit plan obligations	370		400
Employee benefit costs	44		44
Removal obligations	(698)		(728)
Environmental costs	37		40
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportation	(118)		(118)
Safety and reliability	358		295
Public purpose programs	(349)		(273)
2019 GRC retroactive impacts	252		400
Other balancing accounts	(116)		(7)
Other regulatory assets (liabilities), net(2)	46		(101)
Total SoCalGas	(299)		(251)
Sempra Mexico:
Deferred income taxes recoverable in rates	83		83
Other regulatory assets	1		6
Total Sempra Energy Consolidated	$	(1,657)	$	(1,908)

(1)    At September 30, 2020 and December 31, 2019, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $127 million and $108 million, respectively, and for SoCalGas was $291 million and $500 million, respectively.

(2)    Includes regulatory assets earning a return.

CPUC Authorized Cost of Capital and Rate Structure

The following table summarizes the location of balances related to the Wildfire Fund on Sempra Energy’s and SDG&E’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations.

WILDFIRE FUND
(Dollars in millions)
	Location					September 30, 2020		December 31, 2019
Wildfire Fund asset:
Current	Other Current Assets(1)					$	29	$	29
Noncurrent	Wildfire Fund					371		392
Wildfire Fund obligation:
Current	Other Current Liabilities					$	13	$	13
Noncurrent	Deferred Credits and Other					87		86
		Three months ended September 30,				Nine months ended September 30,
		2020		2019		2020		2019
Amortization of Wildfire Fund asset	Operation and Maintenance	$	7	$	8	$	21	$	8
Accretion of Wildfire Fund obligation	Operation and Maintenance	—		—		1		—

(1)    Included in Prepaid Expenses for SDG&E.

In January 2020, SDG&E filed an advice letter to continue the cost of preferred equity for test year 2020 at 6.22%, which the CPUC approved in March 2020.

CPUC AUTHORIZED COST OF CAPITAL AND RATE STRUCTURE
SDG&E							SoCalGas
Authorized weighting		Return on rate base		Weighted return on rate base			Authorized weighting		Return on rate base		Weighted return on rate base
45.25	%	4.59	%	2.08	%	Long-Term Debt	45.60	%	4.23	%	1.93	%
2.75		6.22		0.17		Preferred Equity	2.40		6.00		0.14
52.00		10.20		5.30		Common Equity	52.00		10.05		5.23
100.00	%			7.55	%		100.00	%			7.30	%