REGULATORY MATTERS (Tables)

3 Months Ended

Mar. 31, 2022

Regulated Operations [Abstract]

Schedule of Regulatory Assets

REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	March 31, 2022		December 31, 2021
SDG&E:
Fixed-price contracts and other derivatives	$	(57)	$	(50)
Deferred income taxes recoverable in rates	151		125
Pension and other postretirement benefit plan obligations	(1)		(7)
Removal obligations	(2,229)		(2,251)
Environmental costs	61		62
Sunrise Powerlink fire mitigation	123		122
Regulatory balancing accounts(1)(2)
Commodity – electric	122		77
Gas transportation	29		49
Safety and reliability	73		67
Public purpose programs	(126)		(107)
Wildfire mitigation plan	215		178
Liability insurance premium	108		110
Other balancing accounts	36		207
Other regulatory assets, net(2)	106		119
Total SDG&E	(1,389)		(1,299)
SoCalGas:
Deferred income taxes recoverable in rates	95		44
Pension and other postretirement benefit plan obligations	64		51
Employee benefit costs	31		31
Removal obligations	(612)		(627)
Environmental costs	34		34
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportation	(87)		(146)
Safety and reliability	378		339
Public purpose programs	(234)		(183)
Liability insurance premium	17		16
Other balancing accounts	(109)		42
Other regulatory assets, net(2)	147		142
Total SoCalGas	(276)		(257)
Sempra Infrastructure:
Deferred income taxes recoverable in rates	77		77
Total Sempra	$	(1,588)	$	(1,479)

(1)    At March 31, 2022 and December 31, 2021, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $426 and $358, respectively, and for SoCalGas was $532 and $410, respectively.

(2)    Includes regulatory assets earning a return authorized by applicable regulators, which generally approximates the three-month commercial paper rate.

Schedule of Regulatory Liabilities

REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	March 31, 2022		December 31, 2021
SDG&E:
Fixed-price contracts and other derivatives	$	(57)	$	(50)
Deferred income taxes recoverable in rates	151		125
Pension and other postretirement benefit plan obligations	(1)		(7)
Removal obligations	(2,229)		(2,251)
Environmental costs	61		62
Sunrise Powerlink fire mitigation	123		122
Regulatory balancing accounts(1)(2)
Commodity – electric	122		77
Gas transportation	29		49
Safety and reliability	73		67
Public purpose programs	(126)		(107)
Wildfire mitigation plan	215		178
Liability insurance premium	108		110
Other balancing accounts	36		207
Other regulatory assets, net(2)	106		119
Total SDG&E	(1,389)		(1,299)
SoCalGas:
Deferred income taxes recoverable in rates	95		44
Pension and other postretirement benefit plan obligations	64		51
Employee benefit costs	31		31
Removal obligations	(612)		(627)
Environmental costs	34		34
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportation	(87)		(146)
Safety and reliability	378		339
Public purpose programs	(234)		(183)
Liability insurance premium	17		16
Other balancing accounts	(109)		42
Other regulatory assets, net(2)	147		142
Total SoCalGas	(276)		(257)
Sempra Infrastructure:
Deferred income taxes recoverable in rates	77		77
Total Sempra	$	(1,588)	$	(1,479)

(1)    At March 31, 2022 and December 31, 2021, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $426 and $358, respectively, and for SoCalGas was $532 and $410, respectively.

(2)    Includes regulatory assets earning a return authorized by applicable regulators, which generally approximates the three-month commercial paper rate.

CPUC Authorized Cost of Capital and Rate Structure

In December 2019, the CPUC approved the cost of capital (shown in the table below) for SDG&E and SoCalGas that became effective on January 1, 2020 and will remain in effect through December 31, 2022, subject to the CCM. SDG&E’s CCM benchmark rate is 4.498% based on Moody’s Baa- utility bond index, and SoCalGas’ CCM benchmark rate is 4.029% based on Moody’s A- utility bond index.

AUTHORIZED CPUC COST OF CAPITAL, SUBJECT TO THE CCM
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	%

In April 2022, SDG&E and SoCalGas each filed applications with the CPUC to update their cost of capital (shown in the table below), which would become effective on January 1, 2023 and would remain in effect through December 31, 2025, subject to the CCM if it remains in place as proposed. SDG&E and SoCalGas expect to receive a final decision from the CPUC by the end of 2022.

PROPOSED CPUC COST OF CAPITAL
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
46.00	%	3.87	%	1.78	%	Long-Term Debt	45.60	%	3.89	%	1.77	%
—		—		—		Preferred Equity	0.40		6.00		0.02
54.00		10.55		5.70		Common Equity	54.00		10.75		5.81
100.00	%			7.48	%		100.00	%			7.60	%