Total capital expenditures for PP&E and investments for Sempra increased by $1,395 million, from $4,217 million in the first six months of 2024 to $5,612 million in the same period of 2025. This reflects significant investment across Sempra California, Sempra Texas Utilities, and Sempra Infrastructure.

Management committed to a formal plan in June 2025 to market and sell Ecogas, a natural gas regulated distribution utility in Mexico. This classification of Ecogas' assets as held for sale, with a carrying value of $273 million, aligns with a strategy to optimize the asset portfolio and focus on core operations.

Sempra Infrastructure is actively developing and constructing major projects, including the PA LNG Phase 1 and 2 projects, ECA LNG Phase 1 and 2, Louisiana Storage, Cimarrón Wind, and the Hackberry Carbon Sequestration Project, indicating a clear strategy for future energy infrastructure growth and decarbonization.

Sempra's Operation and Maintenance (O&M) expenses decreased by $94 million (7%) to $1,239 million in Q2 2025 compared to $1,333 million in Q2 2024, primarily driven by a $125 million reduction in expenses associated with refundable programs at Sempra California.

The CPUC approved the 2024 GRC FD for SDG&E and SoCalGas, authorizing revenue requirements for 2024 and attrition year adjustments through 2027. This provides a stable regulatory framework and mechanisms for cost recovery, including for specified safety, maintenance, and reliability investments.

SoCalGas experienced a $25 million decrease in earnings in Q2 2025 due to disallowed regulatory recovery of COVID-19 costs. This highlights a challenge in fully recovering all incurred expenses, impacting short-term profitability.

New and increased tariffs imposed by the U.S. Administration, particularly on steel, aluminum, and copper products, are expected to impact Sempra's construction and development projects, potentially leading to delays, cost overruns, or reduced profitability, as well as increased costs across the LNG value chain.

The Mexican government's adoption of 2025 Energy Laws, including the ESL and HSL, increases state control over the energy sector and grants authorities broad discretion to revoke or suspend permits. This creates novel challenges and could adversely affect Sempra Infrastructure's ability to operate existing assets or develop new projects in Mexico.

SDG&E's Wildfire Fund asset, totaling $269 million at June 30, 2025, is exposed to potential exhaustion due to large fires in California, including those in other IOUs' territories. Such an event would remove the protection afforded by the fund, materially impacting SDG&E's financial condition and results of operations.

SDG&E and SoCalGas, as regulated public utilities, benefit from CPUC-approved General Rate Cases (GRCs) that authorize revenue requirements and attrition year adjustments through 2027. This regulatory framework provides a stable revenue base and cost recovery mechanisms, reinforcing their competitive position in their service territories.

Sempra Infrastructure has secured definitive 20-year SPAs for LNG offtake from the PA LNG Phase 1 project with major international partners like ConocoPhillips, RWE, INEOS, Polski Koncern Naftowy Orlen, and ENGIE, totaling significant Mtpa. This demonstrates strong market demand and Sempra's growing presence in the global LNG export market.

Changes to Mexico's Electricity Industry Law (LIE) and Hydrocarbons Sector Law (HSL) in 2025 prioritize state-owned entities (CFE, PEMEX) and grant regulators broad discretion. This could lead to increased costs, reduced revenues, and hinder Sempra Infrastructure's ability to develop new projects or operate existing assets competitively in Mexico.

Sempra's O&M expenses decreased by $94 million (7%) in Q2 2025 compared to Q2 2024, primarily due to a $125 million reduction in expenses associated with refundable programs at Sempra California. This indicates successful management of program-related costs.

Sempra's cost of natural gas increased by $46 million (34%) to $183 million in Q2 2025 compared to Q2 2024, primarily due to higher average natural gas prices. This external market factor impacts operational costs despite efforts to manage other expenses.

Sempra's cost of electric fuel and purchased power decreased by $65 million (42%) to $91 million in Q2 2025 compared to Q2 2024, mainly due to $44 million lower purchased power from excess capacity sales and lower renewable energy costs, and $24 million lower purchased power from the California ISO.

SDG&E reported higher income tax benefits in 2025 from increased Investment Tax Credits (ITCs) from standalone energy storage projects, which offset regulatory revenues. This indicates a strategic focus on integrating advanced energy storage solutions into the grid.

Sempra Infrastructure is developing the Hackberry Carbon Sequestration Project, which received a draft Class VI carbon injection well construction permit in April 2025. This project aims to permanently sequester carbon dioxide from LNG facilities and other sources, showcasing investment in cutting-edge decarbonization technology.

SDG&E and SoCalGas are pursuing cost recovery for projects including advanced metering infrastructure replacements at SDG&E and new compressor stations (Moreno, Honor Rancho). These investments reflect ongoing efforts to modernize and enhance the reliability and efficiency of their utility systems.

Sempra's total capital expenditures for PP&E and investments increased substantially to $5,612 million for the first six months of 2025, up from $4,217 million in the prior year. This significant increase is driven by investments across all segments, particularly Sempra Infrastructure ($2,323 million) and Sempra California ($2,315 million).

Sempra's issuances of long-term debt (maturities greater than 90 days) increased to $5,458 million in the first six months of 2025 from $3,812 million in 2024. This reflects the company's reliance on debt markets to finance its substantial capital expenditures and maintain liquidity, including a new $1.25 billion term loan facility in May 2025.

Sempra continued its share repurchase program, with $58 million in repurchases during the first six months of 2025, up from $40 million in 2024. Common dividends paid also increased to $787 million from $741 million, demonstrating a consistent return of capital to shareholders.

SDG&E is actively seeking recovery of $1.5 billion in wildfire mitigation plan costs (Track 2) and an additional $417 million (Track 3) from the CPUC. While the Wildfire Fund provides some protection, its potential exhaustion due to large fires remains a significant risk, highlighting the ongoing challenge in managing climate-related liabilities.

Sempra Infrastructure is constructing the 320-MW Cimarrón Wind project in Mexico with a 20-year PPA for renewable energy supply and developing the Hackberry Carbon Sequestration Project. These initiatives demonstrate concrete steps towards environmental commitments and a transition to cleaner energy sources.

Sempra, SDG&E, and SoCalGas report significant balances in Greenhouse Gas allowances and obligations. Changes in GHG obligations, current and noncurrent, saw an increase of $52 million for Sempra and $71 million for SoCalGas in operating cash flows, indicating active management and recovery mechanisms for these environmental costs.

SDG&E, SoCalGas, and Sempra Texas Utilities have experienced inflationary pressures from increases in natural gas, electric fuel, labor, materials, and supplies. Sempra Texas Utilities specifically notes increased labor and contractor costs, as well as higher insurance premiums, with limited regulatory mechanisms for recovery, potentially affecting profitability.

The Mexican government's 2025 Energy Laws, including the ESL and HSL, have repealed prior legislation and reinforced state control over strategic energy sectors. This creates an uncertain regulatory environment for Sempra Infrastructure's operations and development projects in Mexico, with potential adverse impacts on costs and revenues.

Recent FERC decisions, such as disallowing the California ISO adder for SDG&E's TO5 settlement (requiring refunds), and ongoing CPUC GRC proceedings, significantly influence the authorized revenue requirements and cost recovery mechanisms for SDG&E and SoCalGas. These regulatory actions directly impact the utilities' financial stability and operational flexibility.