AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · An operating utility network serving approximately 21.3 million people, substantial installed infrastructure and disclosed regulatory recovery support a strong incumbent efficient-scale advantage. Exclusivity and comparative investment returns are not established.
durability · 2/4 · Installed infrastructure and regulatory recovery support persistence, but actual reductions in authorized returns and potential gas displacement constrain confidence in long-term economics.
customer dependency · 2/4 · The operating delivery network and long-term renewable PPAs provide indirect evidence of continuing customer dependence and committed demand. Customer-level switching friction, exclusivity and renewal outcomes are not disclosed.
erosion resilience · 2/4 · Higher authorized base revenues and continuing utility earnings demonstrate some resilience. Realized recovery disallowances and lower authorized returns coexist with competitive technologies and transition risks.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · SoCalGas realized $66 million higher CPUC-authorized base revenues in the first half of 2026. Total revenue declined largely through commodity and other offsetting items, so that decline is not direct evidence of discretionary price cuts. Prior disallowances and lower authorized returns show mixed pricing outcomes.
retention · 2/4 · Continuing utility delivery and existing long-term PPAs indirectly support repeat demand. Weather-related gas volume declines do not establish customer losses. No retention rates or contract renewal record are supplied.
margin resilience · 2/4 · First-half SDG&E operating income increased, while SoCalGas operating income declined and net earnings remained broadly stable. Commodity-cost offsets and authorized base revenue increases cushion results, but interest costs and disallowances limit resilience. These results do not independently establish a moat.
contractual freedom · 1/4 · Utility base revenues and recovery depend on regulatory authorization, with demonstrated disallowances and reductions in allowed returns. Competitive pipeline pricing and long-term PPAs do not establish broad unilateral repricing freedom elsewhere.
Predictability47
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 14.05
- Positive FCF years (%)
- 0.00
- FCF margin volatility (pp)
- 13.59
Financial strength19
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 10.62
- currentRatioGrade
- 67.29
- Net debt / operating income (x)
- 10.54
- Current ratio (x)
- 1.59
Capital allocation50
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 5.85
- 3-year average dilution (%)
- 1.18
- 3-year average SBC / revenue (%)
- 0.59
- cashConversionGrade
- 0.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Reported historical rate-base growth and shareholder returns support some successful allocation. Parent-only 2025 operating cash flow of $1.007 billion was below $1.603 billion of common dividends before investment funding, alongside substantial borrowing. Available credit provides liquidity, but parent cash flows cannot establish consolidated investment returns. The planned divestiture is not a completed outcome.
incentive alignment · 3/4 · Actual January 2025 awards use three-year relative shareholder-return and EPS-growth measures, threshold forfeiture and capped payouts; annual incentives also include safety. These are substantive alignment mechanisms, although adjusted earnings measures and collective ownership below 1% limit the strength of the ownership evidence. Future vesting is not assumed.
execution · 2/4 · Actual utility results and reported establishment of a capital-recovery tracker support delivery. The LNG commercial-operation delay and adverse regulatory outcomes make the record mixed. Utility financial results are indirect execution evidence, and the bonus-performance explanation is an issuer attribution.
governance · 2/4 · A formally required Lead Independent Director and completed shareholder engagement demonstrate functioning oversight mechanisms. The combined Chairman and CEO role concentrates leadership, and the passages do not establish exceptional oversight effectiveness or comprehensive shareholder protections.
Evidence
2025 Form 10-K | 15 Table of Contents SoCalGas SoCalGas is a regulated public utility that owns and operates a natural gas distribution, transmission and storage system that delivers natural gas to a population of, at December 31, 2025, approximately 21.3 million, covering an approximate 24,000 square mile service territory that encompasses Southern California and portions of central California (excluding San Diego County, the City of Long Beach and the desert area of San Bernardino County).
Business / SoCalGas operating network and service territory · Filed 26/02/2026
24 Table of Contents SOUTHERN CALIFORNIA GAS COMPANY CONDENSED BALANCE SHEETS (Dollars in millions) June 30, December 31, 2026 2025(1) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 2 $ 14 Accounts receivable – trade, net 558 958 Accounts receivable – other, net 83 61 Due from unconsolidated affiliates 5 8 Inventories 232 294 Regulatory assets 175 328 Greenhouse gas allowances 172 175 Other current assets 74 91 Total current assets 1,301 1,929 Other assets: Regulatory assets 2,215 1,888 Greenhouse gas allowances 1,195 935 Right-of-use assets – operating leases 126 68 Other long-term assets 692 738 Total other assets 4,228 3,629 Property, plant and equipment: Property, plant and equipment 31,680 31,078 Less accumulated depreciation and amortization (9,282) (8,948) Property, plant and equipment, net 22,398 22,130 Total assets $ 27,927 $ 27,688 (1) Derived from audited financial statements.
SoCalGas condensed balance sheets / property, plant and equipment · Filed 06/08/2026
Upon the occurrence of a cash expenditure associated with a regulatory asset, the related amounts are recoverable through a regulatory account mechanism for which we earn a return authorized by applicable regulators, which generally approximates the three-month commercial paper rate.
Note 4 / regulatory asset recovery and authorized return mechanism · Filed 26/02/2026
112 Table of Contents In the three months ended June 30, 2026 compared to the same period in 2025, SoCalGas’ natural gas revenues decreased by $81 million (6%) to $1.2 billion primarily due to: ▪$101 million decrease in cost of natural gas sold, which we discuss below ▪$43 million lower revenues from a $21 million credit in 2026 compared to a $22 million cost in 2025 for the non-service components of net periodic benefit cost, which fully offsets in other income (expense), net ▪$14 million regulatory award approved by the CPUC in 2025 ▪$7 million lower regulatory revenues associated with the acceleration of self-developed software deductions, which are offset in income tax expense ▪$5 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M Offset by: ▪$30 million higher CPUC-authorized base revenues ▪$29 million lower revenues in 2025 from disallowed regulatory recovery of COVID-19 costs ▪$20 million higher regulatory revenues primarily from lower gas repairs tax benefits ▪$14 million higher revenues from incremental and balanced capital projects In the three months ended June 30, 2026 compared to the same period in 2025, SoCalGas’ cost of natural gas decreased by $101 million to $51 million due to: ▪$96 million lower average natural gas prices ▪$5 million lower volumes driven by weather In the six months ended June 30, 2026 compared to the same period in 2025, SoCalGas’ natural gas revenues decreased by $373 million (11%) to $2.9 billion primarily due to: ▪$260 million decrease in cost of natural gas sold, which we discuss below ▪$142 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M ▪$43 million lower revenues from a $43 million credit in 2026 compared to a negligible cost in 2025 for the non-service components of net periodic benefit cost, which fully offsets in other income (expense), net ▪$35 million lower regulatory revenues associated with the acceleration of self-developed software deductions, which are offset in income tax expense Offset by: ▪$66 million higher CPUC-authorized base revenues ▪$29 million lower revenues in 2025 from disallowed regulatory recovery of COVID-19 costs ▪$24 million higher revenues from incremental and balanced capital projects In the six months ended June 30, 2026 compared to the same period in 2025, SoCalGas’ cost of natural gas decreased by $260 million (46%) to $307 million due to: ▪$190 million lower average natural gas prices ▪$70 million lower volumes driven by weather Operation and Maintenance In the six months ended June 30, 2026 compared to the same period in 2025, SoCalGas’ O&M decreased by $139 million (10%) to $1.2 billion primarily due to lower expenses associated with refundable programs, which costs are recovered in revenue.
SoCalGas results / authorized base revenues, commodity costs and volumes · Filed 06/08/2026
RESULTS OF OPERATIONS RESULTS OF OPERATIONS (Dollars in millions) In the three months ended June 30, 2026 compared to the same period in 2025, the increase in earnings of $23 million (27%) was primarily due to: ▪$25 million charge in 2025 from disallowed regulatory recovery of COVID-19 costs ▪$21 million higher income tax benefits primarily from flow-through items ▪$4 million higher CPUC base operating margin, net of operating expenses Offset by: ▪$11 million higher net interest expense ▪$10 million regulatory award approved by the CPUC in 2025 ▪$3 million lower AFUDC equity 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: ▪$25 million charge in 2025 from disallowed regulatory recovery of COVID-19 costs ▪$10 million higher CPUC base operating margin, net of operating expenses Offset by: ▪$16 million higher net interest expense ▪$6 million lower AFUDC equity ▪$5 million lower income tax benefits primarily from flow-through items SIGNIFICANT CHANGES IN REVENUES AND COSTS Natural Gas Revenues and Cost of Natural Gas In the three months ended June 30, 2026 and 2025, SoCalGas’ average cost of natural gas per thousand cubic feet was $0.87 and $2.50, respectively.
SoCalGas results / base operating margin and realized cost disallowance · Filed 06/08/2026
Competition. SDG&E faces competition to serve its customer load from distributed and local power generation growth, including DER.
SDG&E competition / distributed and local generation · Filed 26/02/2026
In addition, the electric industry is undergoing rapid technological change, and third party energy storage alternatives and other technologies may increasingly compete with SDG&E’s traditional transmission and distribution infrastructure in delivering electricity to consumers.
SDG&E competition / storage and alternative delivery technologies · Filed 26/02/2026
Certain FERC transmission development projects are open to competition, allowing independent developers to compete with incumbent utilities for the construction and operation of transmission facilities.
Competition / transmission projects open to independent developers · Filed 26/02/2026
Demand and Competition. Ecogas faces competition from other distributors of natural gas in each of its three distribution zones as other distributors of natural gas construct or consider constructing natural gas distribution systems.
Demand and competition / Ecogas distribution zones · Filed 26/02/2026
They compete primarily on the basis of price (in terms of storage and transportation fees), available capacity and interconnections to downstream markets.
Pipeline and storage competition / price, capacity and interconnections · Filed 26/02/2026
The 2025 target was lower than the 2024 ABP earnings target due to several factors, including (1) at Sempra California, the impact from regulatory outcomes in late 2024 that affected our forecasts for 2025, including the CPUC’s 2024 General Rate Case final decision, a CPUC decision resulting in lower authorized cost of capital for 2025, and an order by the Federal Energy Regulatory Commission resulting in lost eligibility for the additional return on equity for participating in the California Independent System Operator market; (2) at Sempra Texas, higher expected operating and maintenance costs and interest expenses, as well as the anticipated impacts from Oncor’s filing of a 2026 Proxy Statement 55 Table of Contents Executive Compensation new base rate review with the PUCT; and (3) at Sempra Infrastructure, the delay in the commercial operations date from 2025 to 2026 for the ECA LNG Phase 1 project under construction.
Executive compensation / realized regulatory changes and LNG project delay · Filed 27/03/2026
utility customer rates on our ability to obtain cost recovery from applicable regulators, our capital expenditure and other growth plans and our ability to advance statewide policies ▪the impact on affordability of customer rates, cost of capital and operating margin due to (i) volatility in inflation, interest rates, commodity prices, tariff rates, and foreign currency exchange rates and (ii) with respect to SDG&E’s and SoCalGas’ businesses, the cost of meeting the demand for lower carbon and reliable energy in California ▪the impact of air quality and climate-related policies, laws, rules, regulations, trends and required disclosures, including actions to reduce or eliminate reliance on natural gas, increased uncertainty in the political or regulatory environment for California natural gas distribution companies, the risk of nonrecovery for stranded assets, and uncertainty related to emerging technologies ▪weather, natural disasters, pandemics, accidents, equipment failures, explosions, terrorism, information system outages or other events, such as work stoppages, that disrupt our operations, damage our facilities or systems, cause the release of harmful materials or fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through regulatory mechanisms or insurance or may impact our ability to obtain satisfactory levels of affordable insurance 7 Table of Contents ▪the availability and reliability of electric power, natural gas and natural gas storage and transportation capacity, including disruptions caused by failures in the transmission grid or pipeline and storage systems or limitations on the injection and withdrawal of natural gas from storage facilities ▪Oncor’s ability to reduce or eliminate its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor’s independent directors or a minority member director ▪other uncertainties, some of which are difficult to predict and beyond our control We caution you not to rely unduly on any forward-looking statements.
Forward-looking risk factors / affordability, gas transition and stranded assets · Filed 06/08/2026
Renewable Power Generation. SI Partners develops, constructs, owns and operates renewable energy generation facilities that have long-term PPAs to sell the electricity they generate to their customers, which are generally load-serving entities and industrial and other customers.
Low Carbon Solutions / operating renewable facilities with long-term PPAs · Filed 26/02/2026
16 Table of Contents SAN DIEGO GAS & ELECTRIC COMPANY CONDENSED STATEMENTS OF OPERATIONS (Dollars in millions) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (unaudited) Operating revenues: Electric $ 1,163 $ 1,034 $ 2,391 $ 2,098 Natural gas 205 228 524 584 Total operating revenues 1,368 1,262 2,915 2,682 Operating expenses: Cost of electric fuel and purchased power 135 106 229 179 Cost of natural gas 22 44 112 131 Operation and maintenance 407 403 830 843 Depreciation and amortization 331 323 675 643 Franchise fees and other taxes 119 98 242 208 Total operating expenses 1,014 974 2,088 2,004 Operating income 354 288 827 678 Other income, net 24 31 62 71 Interest income 3 2 4 2 Interest expense (152) (139) (299) (274) Income before income taxes 229 182 594 477 Income tax expense (39) (7) (108) (21) Net income/Earnings attributable to common shares $ 190 $ 175 $ 486 $ 456 See Notes to Condensed Financial Statements.
SDG&E condensed statements of operations / first-half operating results · Filed 06/08/2026
22 Table of Contents SOUTHERN CALIFORNIA GAS COMPANY CONDENSED STATEMENTS OF OPERATIONS (Dollars in millions) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 (unaudited) Operating revenues $ 1,187 $ 1,268 $ 2,915 $ 3,288 Operating expenses: Cost of natural gas 51 152 307 567 Operation and maintenance 619 622 1,240 1,379 Depreciation and amortization 276 251 549 493 Franchise fees and other taxes 72 62 153 141 Total operating expenses 1,018 1,087 2,249 2,580 Operating income 169 181 666 708 Other income (expense), net 41 (2) 84 40 Interest income 2 1 3 3 Interest expense (104) (89) (201) (179) Income before income taxes 108 91 552 572 Income tax expense — (6) (20) (44) Net income 108 85 532 528 Preferred dividends (1) (1) (1) (1) Earnings attributable to common shares $ 107 $ 84 $ 531 $ 527 See Notes to Condensed Financial Statements.
SoCalGas condensed statements of operations / first-half operating results · Filed 06/08/2026
2025 Form 10-K | S-4 Table of Contents SEMPRA CONDENSED STATEMENTS OF CASH FLOWS (Dollars in millions) Years ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 1,007 $ 120 $ 1,576 Expenditures for property, plant and equipment (6) (3) (5) Proceeds from sale of assets — — 2 Capital contributions to investees (831) (933) (1,749) Distributions from investments 351 9 108 Purchases of trust assets (105) (63) (78) Proceeds from sales of trust assets 124 68 69 Increase in loans to affiliates, net (1,553) (117) (90) Other (9) (1) (1) Net cash used in investing activities (2,029) (1,040) (1,744) Common dividends paid (1,603) (1,499) (1,483) Preferred dividends paid (40) (44) (44) Redemption of preferred stock (900) — — Issuances of common stock, net 32 1,219 145 Repurchases of common stock (58) (43) (32) Issuances of debt (maturities greater than 90 days) 2,550 3,695 1,918 Payments on debt (maturities greater than 90 days) (750) (350) (672) Increase (decrease) in short-term debt, net 982 (365) (89) (Decrease) increase in loans from affiliates, net (595) (241) 220 Other (10) (38) (10) Net cash (used in) provided by financing activities (392) 2,334 (47) Effect of exchange rate changes on cash, cash equivalents and restricted cash — (1) — (Decrease) increase in cash, cash equivalents and restricted cash (1,414) 1,413 (215) Cash, cash equivalents and restricted cash, January 1 1,418 5 220 Cash, cash equivalents and restricted cash, December 31 $ 4 $ 1,418 $ 5 SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES Accrued interest receivable capitalized to note receivable $ 18 $ 17 $ 16 Change in equity related to allocation of interests, net of tax 1,089 — — Preferred deemed dividends 11 — — Preferred dividends declared but not paid — 11 11 Common dividends declared but not paid 421 393 376 Common dividends issued in stock 52 54 — Equitization of amounts due from affiliates 56 110 92 See Notes to Condensed Financial Information of Parent.
Schedule I / parent-only cash flows, investment funding, dividends and financing · Filed 26/02/2026
NOTE 3. DEBT AND CREDIT FACILITY SHORT-TERM DEBT Committed Line of Credit At December 31, 2025, Sempra had capacity of $4.0 billion under a committed line of credit that expires in October 2030, which provides liquidity and supports its commercial paper program, with available unused credit of $3.0 billion before reductions of any unamortized discounts.
Parent debt and credit facility / committed and unused liquidity · Filed 26/02/2026
utilities, including through our acquisitions of interests in Texas-based utilities, we achieved a CAGR of nearly 15% for our rate base and delivered total shareholder return of 303%, meaningfully outperforming the S&P 500 Utilities Index, over this period.(1) Additionally, with input from the board, we accelerated our capital recycling efforts over the past year through, among other things, our planned sale of a 45% equity interest in SI Partners for $9.99 billion dollars.(2) With a strengthening balance sheet, a disciplined approach to capital deployment and a growing share of earnings expected to originate from our U.S.
Board leadership discussion / reported historical rate-base growth, shareholder returns and planned divestiture · Filed 27/03/2026
Type Component Form Key Characteristics Fixed Base Salary Cash • Base salary is targeted to generally align to the median of our compensation peer group, which includes comparably sized general industry, utilities and energy peers Variable Performance-Based Annual Bonus Cash • Based on ABP Earnings (weighted at 80%), Safety Measures (weighted at 12%) and RBP Measures (weighted at 8%) • No bonus payment unless company meets threshold performance level for the year and maximum payouts are capped Long-Term Equity-Based Incentives(1) Equity • Performance-Based Restricted Stock Units (weighted at two-thirds collectively) • Relative TSR Performance-Based Restricted Stock Units (weighted at one-third): 3-year relative TSR, allocated as follows: – 70% relative TSR measured against S&P 500 Utilities Index; maximum payout requires performance at 90th percentile of S&P 500 Utilities Index peers(2) – 30% relative TSR measured against S&P 500 Index; maximum payout requires performance at 90th percentile of S&P 500 Index peers • EPS Growth Performance-Based Restricted Stock Units (weighted at one-third): 3-year adjusted EPS CAGR relative to the 3-year adjusted EPS CAGRs of S&P 500 Utilities Index peers; maximum payout requires performance at the 90th percentile • 3-year performance period for each performance measure • For all of our performance-based restricted stock unit awards, performance below threshold results in zero payout • Stock Options or Service-Based Restricted Stock Units (weighted at one-third):(3) Vest ratably over three years Table 3 (1) As used in this Compensation Discussion and Analysis, the term “long-term equity-based incentives” refers to the annual LTIP awards granted on January 2, 2025.
Executive compensation / terms of annual incentives and January 2025 equity awards · Filed 27/03/2026
The shares of common stock beneficially owned by each of our directors and named executive officers and by our directors and executive officers as a group in each case total less than 1% of our outstanding shares of common stock.
Share ownership / director and executive beneficial ownership · Filed 27/03/2026
Our above-target performance was driven primarily by (1) at Sempra Texas, establishment of the Unified Tracker Mechanism, which is designed to improve the efficiency of recovery of capital investment costs and (2) at Sempra Infrastructure, enhanced optimization of transportation and supply contracts.
Executive compensation / stated drivers of above-target 2025 bonus earnings · Filed 27/03/2026
During periods in which we do not have an independent Chairman of the Board, our Corporate Governance Guidelines require the independent directors to select annually an independent director to serve as the Lead Independent Director and prescribe certain functions and responsibilities of this role, in addition to any other duties the independent directors may assign to the Lead Independent Director from time to time as they deem appropriate.
Corporate governance / annual selection and responsibilities of Lead Independent Director · Filed 27/03/2026
2025-2026 Engagement Cycle Outreach 61% Engagement 50% Director Participation 27% Our 2025-2026 engagement cycle ran from May 2025 through January 2026 We reached out to holders of approximately 61%(1)(2) of our outstanding shares of common stock We held meetings with holders of approximately 50%(1)(2) of our outstanding shares of common stock Our Lead Independent Director participated in meetings with holders of approximately 27%(1) of our outstanding shares of common stock (1) Percentages are calculated using estimates of the holdings of each shareholder included in our outreach and engagement, as applicable, and the number of outstanding shares of our common stock on December 31, 2025.
Corporate governance / completed May 2025–January 2026 shareholder engagement · Filed 27/03/2026
We worked closely with our Chairman and Chief Executive Officer, Jeffrey Martin, and the senior management team to refresh the company’s mission, sharpen strategic focus and review key opportunities and challenges.
Board letter / combined Chairman and Chief Executive Officer role · Filed 27/03/2026
