On March 23, 2026, San Diego Gas & Electric Company (SDG&E), a subsidiary of Sempra, filed an unopposed offer of settlement in its TO6 proceeding with the U.S. Federal Energy Regulatory Commission (FERC). This settlement is significant as it proposes to increase SDG&E's authorized base return on equity from 10.10% to 10.28%, while establishing a hypothetical capital structure comprising 54% equity. The terms of this settlement are pending approval from FERC, which is anticipated in the latter half of 2026. If approved, the settlement will be retroactively effective from June 1, 2025.

The implications of this settlement are noteworthy for Sempra's financial outlook. The company expects that the impact of these settlement terms on its diluted earnings-per-common-share (EPS) will align with its previously announced EPS guidance ranges for 2026 and 2027. This guidance is based on calculations in accordance with generally accepted accounting principles in the United States, as well as adjusted metrics.

The TO6 filing is crucial as it sets the parameters for quantifying SDG&E's costs associated with owning, operating, and maintaining its FERC-jurisdictional transmission facilities. The increase in the return on equity is expected to enhance the financial stability of SDG&E, potentially leading to improved investor confidence and a positive impact on Sempra's stock performance.

This development comes at a time when regulatory scrutiny and the need for sustainable energy solutions are at the forefront of the energy sector. Sempra's proactive approach in addressing these regulatory requirements through settlements may position the company favorably in the eyes of investors and stakeholders. The anticipated approval of the settlement could serve as a catalyst for Sempra's stock, reflecting positively on its operational execution and strategic outlook in the competitive energy market.

Press Release distribution

National Press Distribution across U.S. Media. Direct Access to Key Decision Making Editors.