Sempra, SDG&E, and SoCalGas File 2028 General Rate Case Applications with CPUC – Revenue Requirement Increases Sought
Key Highlights:
- Sempra, along with its California utilities, San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas), has submitted its 2028 General Rate Case (GRC) applications to the California Public Utilities Commission (CPUC).
- The GRC applications request significant increases in authorized revenue requirements for the 2028 test year, with multi-year attrition adjustments through 2031.
- If approved, the proposed changes would take effect in January 2028, with the CPUC expected to issue a proposed decision by the end of 2027.
- The CPUC’s final decision may differ materially from the requested rates, and full approval is not guaranteed.
Details of Requested Revenue Increases
The GRC applications are a core part of Sempra’s regulatory strategy, as they determine the amount of revenue SDG&E and SoCalGas are authorized to collect from customers to cover operating costs, infrastructure investment, and a regulated return. The applications lay out the following requested revenue increases (in millions of dollars):
| Utility | 2028 (Test Year) | 2029 | 2030 | 2031 |
|---|---|---|---|---|
| SDG&E | \$3,760 (+8.7%) |
\$327 (+8.7%) |
\$226 (+5.5%) |
\$240 (+5.6%) |
| SoCalGas | Not specified in summary (+6.2%) |
\$312 (+5.8%) |
Not specified in summary (+5.5%) |
Not specified in summary |
These increases are calculated from the current base year, and reflect both the significant inflationary pressures on energy utilities and the need for continued investment in safety, reliability, and the transition to lower-carbon energy infrastructure.
Shareholder and Investor Considerations
Potential Price Sensitivity:
- The GRC application is one of the most critical regulatory filings for utility holding companies like Sempra, as it directly impacts both earnings and the company’s ability to return capital to shareholders.
- The requested increases, if approved, could materially enhance Sempra’s regulated earnings base for multiple years, supporting dividend growth and capital investment plans.
- Conversely, any shortfall versus the requested amounts—or material adverse changes in the CPUC’s final decision—could negatively impact Sempra’s earnings forecasts, capital structure, and potentially its share price.
- The market will be watching closely for CPUC feedback, intervenor responses, and the likely timeline to a proposed and then final decision.
- Sempra explicitly cautions that the final CPUC decision may differ significantly from the requested rates, and there is no assurance of approval.
Regulatory Disclosure and Forward Guidance
Sempra notes that it will post updates related to the GRC process on its Investor Relations website under the “Corporate updates” tab. The company intends to use this page for material disclosures in compliance with SEC Regulation FD, supplementing press releases, SEC filings, and conference calls.
Forward-looking Statements: Sempra reminds investors that the report contains forward-looking statements subject to numerous risks, including regulatory outcomes, wildfire liability, capital markets conditions, evolving state and federal policies, and other factors. Actual results could differ materially from those anticipated.
Leadership Signatures
- SEMPRA: Signed by Karen L. Sedgwick (Executive Vice President and CFO)
- San Diego Gas & Electric Company: Signed by Maritza Mekitarian (Vice President, Controller and Chief Accounting Officer)
- Southern California Gas Company: Signed by Sara P. Mijares (Vice President, Controller and Chief Accounting Officer)
Conclusion
The submission of the 2028 GRC applications represents a pivotal event for Sempra and its California utilities. The outcome of these proceedings will shape the company’s earnings power, capital investment program, and shareholder returns for years. Investors should monitor the regulatory process and associated updates closely, as the results could have a material impact on Sempra’s valuation and future performance.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. All forward-looking statements are subject to risks and uncertainties. Investors should consult Sempra’s SEC filings and monitor official company communications for the most current information. No guarantee is made as to the accuracy or completeness of the above.
