0001032208us-gaap:OtherNoncurrentAssetsMemberus-gaap:NondesignatedMember2020-12-31OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMember2022-09-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549 
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period endedSeptember 30, 20212022
 or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto

Commission File No.Exact Name of Registrant as Specified in its Charter,
Address of Principal Executive Office and Telephone Number		State of IncorporationI.R.S. Employer Identification No.Former name, former address and former fiscal year, if changed since last report
1-14201SEMPRA ENERGY
sre-20220930_g1.jpg
California33-0732627No change
488 8th Avenue
San Diego, California 92101
(619) 696-2000
1-03779SAN DIEGO GAS & ELECTRIC COMPANY
sre-20220930_g2.jpg
California95-1184800No change
8326 Century Park Court
San Diego, California 92123
(619) 696-2000
1-01402SOUTHERN CALIFORNIA GAS COMPANY
sre-20220930_g3.jpg
California95-1240705No change
555 West Fifth Street
Los Angeles, California 90013
(213) 244-1200
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
SEMPRA ENERGY:
Common Stock, without par valueSRENew York Stock Exchange
5.75% Junior Subordinated Notes Due 2079, $25 par valueSREANew York Stock Exchange
SAN DIEGO GAS & ELECTRIC COMPANY:
None
SOUTHERN CALIFORNIA GAS COMPANY:
None
1

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Sempra EnergyYes☒No☐
San Diego Gas & Electric CompanyYes☒No☐
Southern California Gas CompanyYes☒No☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Sempra EnergyYes☒No☐
San Diego Gas & Electric CompanyYes☒No☐
Southern California Gas CompanyYes☒No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Sempra Energy:
☒ Large Accelerated Filer
☐ Accelerated Filer
☐ Non-accelerated Filer
☐ Smaller Reporting Company
☐ Emerging Growth Company
San Diego Gas & Electric Company:
☐ Large Accelerated Filer
☐ Accelerated Filer
☒ Non-accelerated Filer
☐ Smaller Reporting Company
☐ Emerging Growth Company
Southern California Gas CompanyCompany:
☐ Large Accelerated Filer
☐ Accelerated Filer
☒ Non-accelerated Filer
☐ Smaller Reporting Company
☐ Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Sempra EnergyYes☐No☐
San Diego Gas & Electric CompanyYes☐No☐
Southern California Gas CompanyYes☐No☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Sempra EnergyYes☐No☒
San Diego Gas & Electric CompanyYes☐No☒
Southern California Gas CompanyYes☐No☒
Indicate the number of shares outstanding of each of the issuers’ classes of common stock, as of the latest practicable date.
Common stock outstanding on November 1, 2021:October 31, 2022:
Sempra Energy319,337,462314,333,363 shares
San Diego Gas & Electric CompanyWholly owned by Enova Corporation, which is wholly owned by Sempra Energy
Southern California Gas CompanyWholly owned by Pacific Enterprises, which is wholly owned by Sempra Energy
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TABLE OF CONTENTS
 Page
4
7
  
PART I – FINANCIAL INFORMATION 
Item 1.
9
Notes to Condensed Consolidated Financial Statements
Note 1. General Information and Other Financial Data
29
Note 2. New Accounting Standards
5148
Note 3. Revenues
5149
Note 4. Regulatory Matters
5552
Note 5. Acquisitions Divestitures and Discontinued OperationsDivestitures
5954
Note 6. Investments in Unconsolidated Entities
6055
Note 7. Debt and Credit Facilities
6256
Note 8. Derivative Financial Instruments
6559
Note 9. Fair Value Measurements
7166
Note 10. San Onofre Nuclear Generating Station
7874
Note 11. Commitments and Contingencies
8076
Note 12. Segment Information
9185
Item 2.
9387
Overview
9487
Results of Operations
9488
Capital Resources and Liquidity
106100
Critical Accounting Policies and Estimates
121113
New Accounting Standards
121113
Item 3.
121113
Item 4.
122115
  
PART II – OTHER INFORMATION 
Item 1.
123115
Item 1A.
123115
Item 6.
125116
  
128119
This combined Form 10-Q is separately filed by Sempra Energy doing business as Sempra, San Diego Gas & Electric Company and Southern California Gas Company. Information contained herein relating to any one of these individual reporting entities is filed by such entity on its own behalf. Each reporting entity makes statements herein only as to itself and its consolidated entities and makes no statement whatsoever as to any other reporting entity.
You should read this report in its entirety as it pertains to each respective reporting entity. No one section of the report deals with all aspects of the subject matter. SeparateA separate Part I – Item 1 sections areis provided for each reporting entity, except for the Notes to Condensed Consolidated Financial Statements. The Notes to Condensed Consolidated Financial Statements for all of the reporting entities are combined. All Items other than Part I – Item 1 are combined for the three reporting entities.
None of the website references in this report are active hyperlinks, and the information contained on, or that can be accessed through, any such website is not, and shall not be deemed to be, part of this report.

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Table of Contents
The following terms and abbreviations appearing in this report have the meanings indicated below.
GLOSSARY
2019 GRC FDfinal decision in the California Utilities’ 2019 General Rate Case
ABCalifornia Assembly Bill
ADIABlack Silverback ZC 2022 LP (assignee of Black River B 2017 Inc.), a wholly owned affiliate of Abu Dhabi Investment Authority
AFUDCallowance for funds used during construction
AMPArrearage Management Payment Plan
Annual ReportAnnual Report on Form 10-K for the year ended December 31, 20202021
AOCIaccumulated other comprehensive income (loss)
AROasset retirement obligation
ASCAccounting Standards Codification
ASEAAgencia de Seguridad, Energía y Ambiente (Mexico’s National Agency for Industrial Safety and Environmental Protection)
ASRaccelerated share repurchase
ASUAccounting Standards Update
Bcfbillion cubic feet
BechtelBechtel Energy Inc. (formerly known as Bechtel Oil, Gas and Chemicals, Inc.
BladeBlade Energy Partners)
bpsbasis points
CalGEMCalifornia Geologic Energy Management Division
California UtilitiesSan Diego Gas & Electric Company and Southern California Gas Company, collectively
Cameron LNG JVCameron LNG Holdings, LLC
CCACommunity Choice Aggregation
CCMcost of capital adjustment mechanism
CENACECentro Nacional de Control de Energía (Mexico’s National Center for Energy Control Center)Control)
CFEComisión Federal de Electricidad (Mexico’s Federal Electricity Commission)
CFINCameron LNG FINCO, LLC, a wholly owned and unconsolidated affiliate of Cameron LNG JV
Chilquinta EnergíaChilquinta Energía S.A. and its subsidiaries
COVID-19coronavirus disease 2019
CPUCCalifornia Public Utilities Commission
CREComisión Reguladora de Energía (Mexico’s Energy Regulatory Commission)
CRRcongestion revenue right
DOEU.S. Department of Energy
ECA LNGECA LNG Phase 1 and ECA LNG Phase 2, collectively
ECA LNG Phase 1ECA LNG Holdings B.V.
ECA LNG Phase 2ECA LNG II Holdings B.V.
ECA Regas FacilityEnergía Costa Azul, S. de R.L. de C.V. LNG regasification facility
EcogasEcogas México, S. de R.L. de C.V.
EdisonSouthern California Edison Company, a subsidiary of Edison International
EFHEnergy Future Holdings Corp. (renamed Sempra Texas Holdings Corp.)
EletransEletrans S.A., Eletrans II S.A. and Eletrans III S.A., collectively
EPCengineering, procurement and construction
EPSearnings (losses) per common share
ERCOTElectric Reliability Council of Texas, Inc., the independent system operator and the regional coordinator of various electricity systems within Texas
ESJEnergía Sierra Juárez, S. de R.L. de C.V.
ETReffective income tax rate
FEEDFront-End Engineering Design
FERCU.S. Federal Energy Regulatory Commission
FitchFitch Ratings, Inc.
FTAFree Trade Agreement
GazpromGazprom Marketing & Trading México S. de R.L. de C.V.
GRCGeneral Rate Case
HMRCHOAHer Majesty’s Revenue and Customs (United Kingdom’s Revenue and Customs Department)Heads of Agreement
IEnovaInfraestructura Energética Nova, S.A.B. de C.V., renamed Infraestructura Energética Nova, S.A.P.I. de C.V. on November 1, 2021
IEnova PipelinesIEnova Pipelines, S. de R.L. de C.V.
IMG JVInfraestructura Marina del Golfo
IOUinvestor-owned utility
IRAInflation Reduction Act
ISOIndependent System Operator
JVjoint venture
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GLOSSARY (CONTINUED)
JVjoint venture
KKRKKR Pinnacle Investor L.P. (as successor-in-interest to KKR Pinnacle Aggregator L.P.), an affiliate of Kohlberg Kravis Roberts & Co. L.P.
LA Superior CourtLos Angeles County Superior Court
Leakthe leak at the SoCalGas Aliso Canyon natural gas storage facility injection-and-withdrawal well, SS25, discovered by SoCalGas on October 23, 2015
LIBORLondon Interbank Offered Rate
LNGliquefied natural gas
LPGliquid petroleum gas
Luz del SurLuz del Sur S.A.A. and its subsidiaries
MD&AManagement’s Discussion and Analysis of Financial Condition and Results of Operations
Mexican Stock ExchangeBolsa Mexicana de Valores, S.A.B. de C.V., or BMV
MMBtumillion British thermal units (of natural gas)
Moody’sMoody’s Investors Service, Inc.
MOUMemorandum of Understanding
Mtpamillion tonnes per annum
MWmegawatt
MWhmegawatt hour
NCInoncontrolling interest(s)
NDTnuclear decommissioning trusts
NEILNuclear Electric Insurance Limited
O&Moperation and maintenance expense
OCIother comprehensive income (loss)
OEISOffice of Energy Infrastructure Safety
OIIOrder Instituting Investigation
OIROrder Instituting a Rulemaking
OncorOncor Electric Delivery Company LLC
Oncor HoldingsOncor Electric Delivery Holdings Company LLC
OSCOrder to Show Cause
PA LNG Phase 1 projectinitial phase of the proposed Port Arthur LNG liquefaction export project
PA LNG Phase 2 projectsecond phase of the proposed Port Arthur LNG liquefaction export project
PG&EPacific Gas and Electric Company
PGNiGPolish Oil & Gas Company
PP&Eproperty, plant and equipment
PPApower purchase agreement
PSEPPipeline Safety Enhancement Plan
PUCTPublic Utility Commission of Texas
PXiSEPXiSE Energy Solutions, LLC
RBSThe Royal Bank of Scotland plc
RBS SEERBS Sempra Energy Europe
RBS Sempra CommoditiesRBS Sempra Commodities LLP
ROEreturn on equity
ROUright-of-use
RSUrestricted stock unit
S&PS&P Global Ratings, a division of S&P Global Inc.
Saavi EnergíaSaavi Energía S. de R.L. de C.V.
SBCalifornia Senate Bill
SDG&ESan Diego Gas & Electric Company
SDSRASenior Debt Service Reserve Account
SECU.S. Securities and Exchange Commission
SEDSafety and Enforcement Division of the CPUC
SEDATUSecretaría de Desarrollo Agrario, Territorial y Urbano (Mexico’s agency in charge of agriculture, land and urban development)
SempraSempra Energy doing business as Sempra, together with its consolidated entities unless otherwise stated or indicated by the context
Sempra GlobalCaliforniaholding company for most of Sempra’s subsidiaries not subject toSan Diego Gas & Electric Company and Southern California or Texas utility regulation, renamed Sempra Infrastructure Partners on September 30, 2021Gas Company, collectively
SENERSecretaría de Energía de México (Mexico’s Ministry of Energy)
series A preferred stockSempra’s 6% mandatory convertible preferred stock, series A
5

GLOSSARY (CONTINUED)
series B preferred stockSempra’s 6.75% mandatory convertible preferred stock, series B
series C preferred stockSempra’s 4.875% fixed-rate reset cumulative redeemable perpetual preferred stock, series C
Shell MexicoShell México Gas Natural, S. de R.L. de C.V.
SI PartnersSempra Infrastructure Partners, LP, the holding company for most of Sempra’s subsidiaries not subject to California or Texas utility regulation
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Table of Contents
GLOSSARY (CONTINUED)
SoCalGasSouthern California Gas Company
SONGSSan Onofre Nuclear Generating Station
SPAsale and purchase agreement
Support Agreementsupport agreement, dated July 28, 2020 and amended on June 29, 2021, among Sempra and Sumitomo Mitsui Banking Corporation
TAG JVTAG Norte Holding, S. de R.L. de C.V.
TdMTermoeléctrica de Mexicali
Technip EnergiesTP Oil & Gas Mexico, S. De R.L. De C.V., an affiliate of Technip Energies N.V.
TecnoredTecnored S.A.
TecsurTecsur S.A.
TO4Electric Transmission Owner Formula Rate, effective through May 31, 2019
TO5Electric Transmission Owner Formula Rate, effective June 1, 2019
TTITexas Transmission Investment LLC
U.S. GAAPgenerally accepted accounting principles in the United States of America
VATvalue-added tax
VentikaVentika, S.A.P.I. de C.V. and Ventika II, S.A.P.I. de C.V., collectively
VIEvariable interest entity
Wildfire Fundthe fund established pursuant to AB 1054
Wildfire LegislationAB 1054 and AB 111

References in this report to “we,” “our,” “us,” “our company” and “Sempra” are to Sempra and its consolidated entities, collectively, unless otherwise stated or indicated by the context. We sometimes refer to SDG&E and SoCalGas collectively as Sempra California, which does not include the utilities in our Sempra Texas Utilities or Sempra Infrastructure segments. All references in this report to our reportable segments are not intended to refer to any legal entity with the same or similar name.
Throughout this report, we refer to the following as Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements when discussed together or collectively:
•the Condensed Consolidated Financial Statements and related Notes of Sempra;
•the Condensed Financial Statements and related Notes of SDG&E; and
•the Condensed Financial Statements and related Notes of SoCalGas.
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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
We make statements in this report that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions with respect to the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statements.statement. These forward-looking statements represent our estimates and assumptions only as of the filing date of this report. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or other factors.
Forward-looking statements can be identified by words such as “believes,” “expects,” “intends,” “anticipates,” “contemplates,” “plans,” “estimates,” “projects,” “forecasts,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “under construction,“construct,” “in development,“develop,” “opportunity,” “initiative,” “target,” “outlook,” “optimistic,” “maintain,” “continue,” “progress,” “advance,” “goal,” “aim,” “commit,” or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.
Factors, among others, that could cause actual results and events to differ materially from those describedexpressed or implied in any forward-looking statementsstatement include risks and uncertainties relating to:
▪California wildfires, including the risks that we may be found liable for damages regardless of fault and that we may not be able to recover all or a substantial portion of costs from insurance, the Wildfire Fund, or in rates from customers or a combination thereof
▪decisions, investigations, regulations, issuances or revocations of permits andor other authorizations, renewals of franchises, and other actions by (i) the CPUC, CRE, DOE, FERC, PUCT, and other regulatorygovernmental and governmentalregulatory bodies and (ii) the U.S., Mexico and states, counties, cities and other jurisdictions therein and in the U.S., Mexico and other countries in which we do business
▪the success of business development efforts, construction projects and acquisitions and divestitures, including risks in (i) the abilitybeing able to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) the ability to realizerealizing anticipated benefits from any of these efforts if completed, and (iv) obtaining the consent or approval of partners or other third parties, including governmental entitiesand regulatory bodies
▪the resolution of civil and criminal litigation, regulatory inquiries, investigations, arbitrations, property disputes and other proceedings, and arbitrations, including those related to the Leak
▪changes to laws and regulations, including proposed changescertain of Mexico’s laws and rules that impact energy supplier permitting, energy contract rates, the electricity industry generally and the import, export, transport and storage of hydrocarbons
▪cybersecurity threats, including by state and state-sponsored actors, by ransomware or other attacks on our systems or the systems of third-parties with which we conduct business, including to the Mexican constitution that could materially limit accessenergy grid or other energy infrastructure, all of which have become more pronounced due to recent geopolitical events, such as the electric generation market and changes to Mexico’s trade rules that could materially limit our ability to import and export hydrocarbonswar in Ukraine
▪failure of foreign governments, and state-owned entities and our counterparties to honor their contracts and commitments and property disputes
▪our ability to borrow money on favorable terms or otherwise and meet our debt service obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and (ii) rising interest rates and inflation
▪the impact on SDG&E’s and SoCalGas’ cost of capital and the affordability of customer rates and on Sempra Infrastructure’s ability to pass through any higher costs to current and future customers due to (i) volatility in inflation, interest rates, foreign currency exchange rates (with respect to Sempra Infrastructure’s business) and commodity prices and our ability to borrow on favorable termseffectively hedge these risks, and meet our substantial debt service obligations(ii) with respect to SDG&E’s business, departing retail load resulting from additional customers transferring to CCA and Direct Access
▪the impact of energy and climate policies, laws, rules and disclosures, as well as related goals policies, legislation and rulemaking,actions of companies in our industry, including actions to reduce or eliminate reliance on natural gas, generally and any deterioration of or increased uncertainty in the political or regulatory environment for California natural gas distribution companies and the risk of nonrecovery for stranded assets
▪the pace of the development and adoption of new technologies in the energy sector, including those designed to support governmental and private party energy and climate goals, and our ability to timely and economicallyefficiently incorporate them into our businessbusinesses
▪weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, information system outages or other events that disrupt our operations, damage our facilities andor systems, cause the release of harmful materials, cause fires or subject us to liability for property damage or personal injuries,damages, fines and penalties, some of which may not be covered by insurance,recoverable through regulatory mechanisms, may be disputed or not covered by insurers, or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance
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▪the availability of electric power, and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid or limitations on the withdrawal of natural gas from storage facilities
▪the impact of the COVID-19 pandemic including potential vaccination mandates, on capital projects, regulatory approvals and the execution of our operations
▪cybersecurity threats to the energy grid, storage and pipeline infrastructure, information and systems used to operate our businesses, and confidentiality of our proprietary information and personal information of our customers and employees, including ransomware attacks on our systems and the systems of third-party vendors and other parties with which we conduct business
▪the impact at SDG&E on competitive customer rates and reliability due to the growth in distributed and local power generation, including from departing retail load resulting from customers transferring to Direct Access and Community Choice Aggregation, and the risk of nonrecovery for stranded assets and contractual obligations
7

▪Oncor’s ability to eliminate or reduce its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor’s independent directors or a minority member director
▪volatility in foreign currency exchange, inflation and interest rates and commodity prices and our ability to effectively hedge these risks and with respect to interest rates, the impact on the California Utilities’ cost of capital
▪changes in tax and trade policies, laws and regulations, including tariffs, and revisions to international trade agreements and sanctions, such as those that have been imposed and that may be imposed in the future in connection with the war in Ukraine, which may increase our costs, reduce our competitiveness, impact our ability to do business with certain counterparties, or impair our ability to resolve trade disputes
▪other uncertainties, some of which may beare difficult to predict and are beyond our control
We caution you not to rely unduly on any forward-looking statements. You should review and carefully consider carefully the risks, uncertainties and other factors that affect our businesses as described herein, in our Annual Report and in other reports we file with the SEC.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SEMPRA ENERGYSEMPRA ENERGYSEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts; shares in thousands)(Dollars in millions, except per share amounts; shares in thousands)(Dollars in millions, except per share amounts; shares in thousands)
Three months ended
September 30,		Nine months ended
September 30,		 Three months ended
September 30,		Nine months ended
September 30,
2021202020212020 2022202120222021
(unaudited) (unaudited)
REVENUESREVENUES REVENUES 
Utilities$2,560 $2,301 $7,839 $7,199 
Utilities:Utilities:
Natural gasNatural gas$1,587 $1,255 $5,611 $4,310 
ElectricElectric1,357 1,305 3,663 3,529 
Energy-related businessesEnergy-related businesses453 343 1,174 1,000 Energy-related businesses673 453 1,710 1,174 
Total revenuesTotal revenues3,013 2,644 9,013 8,199 Total revenues3,617 3,013 10,984 9,013 
EXPENSES AND OTHER INCOMEEXPENSES AND OTHER INCOME EXPENSES AND OTHER INCOME 
Utilities:Utilities: Utilities: 
Cost of natural gasCost of natural gas(282)(114)(892)(582)Cost of natural gas(505)(282)(1,835)(892)
Cost of electric fuel and purchased powerCost of electric fuel and purchased power(312)(429)(828)(918)Cost of electric fuel and purchased power(307)(312)(763)(828)
Energy-related businesses cost of salesEnergy-related businesses cost of sales(220)(90)(448)(200)Energy-related businesses cost of sales(340)(220)(764)(448)
Operation and maintenanceOperation and maintenance(1,073)(1,018)(3,098)(2,767)Operation and maintenance(1,206)(1,073)(3,454)(3,098)
Aliso Canyon litigation and regulatory mattersAliso Canyon litigation and regulatory matters(1,571)(27)(1,571)(127)Aliso Canyon litigation and regulatory matters(122)(1,571)(259)(1,571)
Depreciation and amortizationDepreciation and amortization(471)(418)(1,376)(1,242)Depreciation and amortization(506)(471)(1,500)(1,376)
Franchise fees and other taxesFranchise fees and other taxes(151)(139)(442)(397)Franchise fees and other taxes(162)(151)(474)(442)
Other (expense) income, netOther (expense) income, net(55)29 52 (163)Other (expense) income, net(40)(55)(3)52 
Interest incomeInterest income16 27 50 76 Interest income18 16 58 50 
Interest expenseInterest expense(259)(264)(776)(818)Interest expense(282)(259)(796)(776)
(Loss) income from continuing operations before income taxes and equity
earnings
(1,365)201 (316)1,061 
Income tax benefit (expense)342 (99)45 (60)
Income (loss) before income taxes and equity earningsIncome (loss) before income taxes and equity earnings165 (1,365)1,194 (316)
Income tax (expense) benefitIncome tax (expense) benefit(21)342 (435)45 
Equity earningsEquity earnings391 326 1,022 822 Equity earnings417 391 1,118 1,022 
(Loss) income from continuing operations, net of income tax(632)428 751 1,823 
(Loss) income from discontinued operations, net of income tax— (7)— 1,850 
Net (loss) income(632)421 751 3,673 
Net income (loss)Net income (loss)561 (632)1,877 751 
Earnings attributable to noncontrolling interestsEarnings attributable to noncontrolling interests(5)(22)(48)(201)Earnings attributable to noncontrolling interests(65)(5)(187)(48)
Preferred dividendsPreferred dividends(11)(48)(52)(121)Preferred dividends(11)(11)(33)(52)
Preferred dividends of subsidiaryPreferred dividends of subsidiary— — (1)(1)Preferred dividends of subsidiary— — (1)(1)
(Losses) earnings attributable to common shares$(648)$351 $650 $3,350 
Earnings (losses) attributable to common sharesEarnings (losses) attributable to common shares$485 $(648)$1,656 $650 
Basic EPS:Basic EPS:Basic EPS:
(Losses) earnings from continuing operations$(2.03)$1.23 $2.10 $5.17 
(Losses) earnings from discontinued operations$— $(0.02)$— $6.31 
(Losses) earnings$(2.03)$1.21 $2.10 $11.48 
Earnings (losses)Earnings (losses)$1.54 $(2.03)$5.25 $2.10 
Weighted-average common shares outstandingWeighted-average common shares outstanding319,144 289,490 309,350 291,771 Weighted-average common shares outstanding314,724 319,144 315,301 309,350 
Diluted EPS:Diluted EPS:Diluted EPS:
(Losses) earnings from continuing operations$(2.03)$1.23 $2.09 $5.15 
(Losses) earnings from discontinued operations$— $(0.02)$— $6.28 
(Losses) earnings$(2.03)$1.21 $2.09 $11.43 
Earnings (losses)Earnings (losses)$1.53 $(2.03)$5.23 $2.09 
Weighted-average common shares outstandingWeighted-average common shares outstanding319,144 290,582 310,854 292,935 Weighted-average common shares outstanding316,087 319,144 316,457 310,854 
See Notes to Condensed Consolidated Financial Statements.
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SEMPRA ENERGYSEMPRA ENERGYSEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Sempra Energy shareholders’ equity   Sempra Energy shareholders’ equity  
Pretax
amount		Income tax
 benefit (expense)		Net-of-tax
amount		Noncontrolling
interests
(after tax)		Total Pretax
amount		Income tax
(expense) benefit		Net-of-tax
amount		Noncontrolling
interests
(after tax)		Total
(unaudited) (unaudited)
Three months ended September 30, 2021 and 2020 Three months ended September 30, 2022 and 2021
2022:2022:     
Net incomeNet income$517 $(21)$496 $65 $561 
Other comprehensive income (loss):Other comprehensive income (loss):     
Foreign currency translation adjustmentsForeign currency translation adjustments— — — (1)(1)
Financial instrumentsFinancial instruments60 (15)45 21 66 
Pension and other postretirement benefitsPension and other postretirement benefits2 — 2 — 2 
Total other comprehensive incomeTotal other comprehensive income62 (15)47 20 67 
Comprehensive incomeComprehensive income$579 $(36)$543 $85 $628 
2021:2021:     2021:     
Net (loss) incomeNet (loss) income$(979)$342 $(637)$5 $(632)Net (loss) income$(979)$342 $(637)$5 $(632)
Other comprehensive income (loss):Other comprehensive income (loss):     Other comprehensive income (loss):    
Foreign currency translation adjustmentsForeign currency translation adjustments(4)— (4)(2)(6)Foreign currency translation adjustments(4)— (4)(2)(6)
Financial instrumentsFinancial instruments38 (9)29 — 29 Financial instruments38 (9)29 — 29 
Pension and other postretirement benefitsPension and other postretirement benefits(7)2 (5)— (5)Pension and other postretirement benefits(7)2 (5)— (5)
Total other comprehensive income (loss)Total other comprehensive income (loss)27 (7)20 (2)18 Total other comprehensive income (loss)27 (7)20 (2)18 
Comprehensive (loss) incomeComprehensive (loss) income$(952)$335 $(617)$3 $(614)Comprehensive (loss) income$(952)$335 $(617)$3 $(614)
Nine months ended September 30, 2022 and 2021
2020:     
2022:2022:     
Net incomeNet income$489 $(90)$399 $22 $421 Net income$2,125 $(435)$1,690 $187 $1,877 
Other comprehensive income (loss):Other comprehensive income (loss):    Other comprehensive income (loss):     
Foreign currency translation adjustmentsForeign currency translation adjustments9 — 9 (1)8 Foreign currency translation adjustments5 — 5 — 5 
Financial instrumentsFinancial instruments36 (16)20 5 25 Financial instruments227 (56)171 56 227 
Pension and other postretirement benefitsPension and other postretirement benefits6 (1)5 — 5 Pension and other postretirement benefits15 (2)13 — 13 
Total other comprehensive incomeTotal other comprehensive income51 (17)34 4 38 Total other comprehensive income247 (58)189 56 245 
Comprehensive incomeComprehensive income$540 $(107)$433 $26 $459 Comprehensive income2,372 (493)1,879 243 2,122 
Nine months ended September 30, 2021 and 2020
Preferred dividends of subsidiaryPreferred dividends of subsidiary(1)— (1)— (1)
Comprehensive income, after preferred
dividends of subsidiary
Comprehensive income, after preferred
dividends of subsidiary
$2,371 $(493)$1,878 $243 $2,121 
2021:2021:     2021:    
Net incomeNet income$658 $45 $703 $48 $751 Net income$658 $45 $703 $48 $751 
Other comprehensive income (loss):Other comprehensive income (loss):     Other comprehensive income (loss):     
Foreign currency translation adjustmentsForeign currency translation adjustments(4)— (4)(2)(6)Foreign currency translation adjustments(4)— (4)(2)(6)
Financial instrumentsFinancial instruments145 (36)109 9 118 Financial instruments145 (36)109 9 118 
Pension and other postretirement benefitsPension and other postretirement benefits11 (2)9 — 9 Pension and other postretirement benefits11 (2)9 — 9 
Total other comprehensive incomeTotal other comprehensive income152 (38)114 7 121 Total other comprehensive income152 (38)114 7 121 
Comprehensive incomeComprehensive income810 7 817 55 872 Comprehensive income810 7 817 55 872 
Preferred dividends of subsidiaryPreferred dividends of subsidiary(1)— (1)— (1)Preferred dividends of subsidiary(1)— (1)— (1)
Comprehensive income, after preferred
dividends of subsidiary
Comprehensive income, after preferred
dividends of subsidiary
$809 $7 $816 $55 $871 
Comprehensive income, after preferred
dividends of subsidiary
$809 $7 $816 $55 $871 
2020:    
Net income$4,718 $(1,246)$3,472 $201 $3,673 
Other comprehensive income (loss):     
Foreign currency translation adjustments533 — 533 (16)517 
Financial instruments(167)41 (126)(9)(135)
Pension and other postretirement benefits27 (3)24 — 24 
Total other comprehensive income (loss)393 38 431 (25)406 
Comprehensive income5,111 (1,208)3,903 176 4,079 
Preferred dividends of subsidiary(1)— (1)— (1)
Comprehensive income, after preferred
dividends of subsidiary
$5,110 $(1,208)$3,902 $176 $4,078 
See Notes to Condensed Consolidated Financial Statements.

10

Table of Contents
SEMPRA ENERGYSEMPRA ENERGYSEMPRA ENERGY
CONDENSED CONSOLIDATED BALANCE SHEETSCONDENSED CONSOLIDATED BALANCE SHEETSCONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,December 31,September 30,December 31,
2021
2020(1)
 2022
2021(1)
(unaudited)  (unaudited) 
ASSETSASSETS  ASSETS  
Current assets:Current assets:  Current assets:  
Cash and cash equivalentsCash and cash equivalents$873 $960 Cash and cash equivalents$685 $559 
Restricted cashRestricted cash31 22 Restricted cash49 19 
Accounts receivable – trade, netAccounts receivable – trade, net1,416 1,578 Accounts receivable – trade, net1,817 2,071 
Accounts receivable – other, netAccounts receivable – other, net470 403 Accounts receivable – other, net371 398 
Due from unconsolidated affiliatesDue from unconsolidated affiliates30 20 Due from unconsolidated affiliates52 23 
Income taxes receivableIncome taxes receivable93 113 Income taxes receivable90 79 
InventoriesInventories371 308 Inventories506 389 
Prepaid expensesPrepaid expenses333 260 
Regulatory assetsRegulatory assets290 190 Regulatory assets270 271 
Greenhouse gas allowancesGreenhouse gas allowances546 553 Greenhouse gas allowances100 97 
Other current assetsOther current assets473 364 Other current assets192 209 
Total current assetsTotal current assets4,593 4,511 Total current assets4,465 4,375 
Other assets:Other assets:  Other assets:  
Restricted cashRestricted cash3 3 Restricted cash52 3 
Due from unconsolidated affiliatesDue from unconsolidated affiliates684 780 Due from unconsolidated affiliates— 637 
Regulatory assetsRegulatory assets2,280 1,822 Regulatory assets2,641 2,011 
Insurance receivable for Aliso Canyon costsInsurance receivable for Aliso Canyon costs10 360 
Greenhouse gas allowancesGreenhouse gas allowances758 422 
Nuclear decommissioning trustsNuclear decommissioning trusts1,003 1,019 Nuclear decommissioning trusts816 1,012 
Dedicated assets in support of certain benefit plansDedicated assets in support of certain benefit plans487 567 
Deferred income taxesDeferred income taxes133 151 
Right-of-use assets – operating leasesRight-of-use assets – operating leases665 594 
Investment in Oncor HoldingsInvestment in Oncor Holdings12,475 12,440 Investment in Oncor Holdings13,558 12,947 
Other investmentsOther investments1,483 1,388 Other investments1,876 1,525 
GoodwillGoodwill1,602 1,602 Goodwill1,602 1,602 
Other intangible assetsOther intangible assets376 202 Other intangible assets350 370 
Dedicated assets in support of certain benefit plans539 512 
Insurance receivable for Aliso Canyon costs414 445 
Deferred income taxes151 136 
Greenhouse gas allowances356 101 
Right-of-use assets – operating leases499 543 
Wildfire fundWildfire fund342 363 Wildfire fund310 331 
Other long-term assetsOther long-term assets914 753 Other long-term assets1,401 1,244 
Total other assetsTotal other assets23,121 22,109 Total other assets24,659 23,776 
Property, plant and equipment:Property, plant and equipment:  Property, plant and equipment:  
Property, plant and equipmentProperty, plant and equipment57,474 53,928 Property, plant and equipment62,218 58,940 
Less accumulated depreciation and amortizationLess accumulated depreciation and amortization(14,716)(13,925)Less accumulated depreciation and amortization(15,779)(15,046)
Property, plant and equipment, netProperty, plant and equipment, net42,758 40,003 Property, plant and equipment, net46,439 43,894 
Total assetsTotal assets$70,472 $66,623 Total assets$75,563 $72,045 
(1)    Derived from audited financial statements.
See Notes to Condensed Consolidated Financial Statements.
11

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SEMPRA ENERGYSEMPRA ENERGYSEMPRA ENERGY
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,December 31,September 30,December 31,
2021
2020(1)
 2022
2021(1)
(unaudited)  (unaudited) 
LIABILITIES AND EQUITYLIABILITIES AND EQUITY  LIABILITIES AND EQUITY  
Current liabilities:Current liabilities:  Current liabilities:  
Short-term debtShort-term debt$3,068 $885 Short-term debt$1,750 $3,471 
Accounts payable – tradeAccounts payable – trade1,400 1,359 Accounts payable – trade1,919 1,671 
Accounts payable – otherAccounts payable – other179 154 Accounts payable – other242 178 
Due to unconsolidated affiliates42 45 
Dividends and interest payableDividends and interest payable592 551 Dividends and interest payable630 563 
Accrued compensation and benefitsAccrued compensation and benefits454 446 Accrued compensation and benefits474 479 
Regulatory liabilitiesRegulatory liabilities515 140 Regulatory liabilities298 359 
Current portion of long-term debt and finance leasesCurrent portion of long-term debt and finance leases2,994 1,540 Current portion of long-term debt and finance leases1,005 106 
Reserve for Aliso Canyon costsReserve for Aliso Canyon costs1,962 150 Reserve for Aliso Canyon costs145 1,980 
Greenhouse gas obligationsGreenhouse gas obligations546 553 Greenhouse gas obligations100 97 
Other current liabilitiesOther current liabilities1,192 1,016 Other current liabilities1,273 1,131 
Total current liabilitiesTotal current liabilities12,944 6,839 Total current liabilities7,836 10,035 
Long-term debt and finance leasesLong-term debt and finance leases20,042 21,781 Long-term debt and finance leases23,830 21,068 
Deferred credits and other liabilities:Deferred credits and other liabilities:  Deferred credits and other liabilities:  
Due to unconsolidated affiliatesDue to unconsolidated affiliates286 234 Due to unconsolidated affiliates296 287 
Regulatory liabilitiesRegulatory liabilities3,312 3,402 
Greenhouse gas obligationsGreenhouse gas obligations521 225 
Pension and other postretirement benefit plan obligations, net of plan assetsPension and other postretirement benefit plan obligations, net of plan assets964 1,059 Pension and other postretirement benefit plan obligations, net of plan assets602 687 
Deferred income taxesDeferred income taxes2,882 2,871 Deferred income taxes4,327 3,477 
Regulatory liabilities3,378 3,372 
Reserve for Aliso Canyon costs14 301 
Greenhouse gas obligations190 — 
Asset retirement obligationsAsset retirement obligations3,187 3,113 Asset retirement obligations3,479 3,375 
Deferred credits and otherDeferred credits and other1,981 2,119 Deferred credits and other2,071 2,070 
Total deferred credits and other liabilitiesTotal deferred credits and other liabilities12,882 13,069 Total deferred credits and other liabilities14,608 13,523 
Commitments and contingencies (Note 11)Commitments and contingencies (Note 11)00Commitments and contingencies (Note 11)
Equity:Equity:  Equity:  
Preferred stock (50 million shares authorized):Preferred stock (50 million shares authorized):Preferred stock (50 million shares authorized):
Mandatory convertible preferred stock, series A
(17.25 million shares outstanding at December 31, 2020)
— 1,693 
Mandatory convertible preferred stock, series B
(5.75 million shares outstanding at December 31, 2020)
— 565 
Preferred stock, series C
(0.9 million shares outstanding)
Preferred stock, series C
(0.9 million shares outstanding)
889 889 
Preferred stock, series C
(0.9 million shares outstanding)
889 889 
Common stock (750 million shares authorized; 319 million and 288 million shares
outstanding at September 30, 2021 and December 31, 2020, respectively; no par value)
10,791 7,053 
Common stock (750 million shares authorized; 314 million and 317 million shares
outstanding at September 30, 2022 and December 31, 2021, respectively; no par value)
Common stock (750 million shares authorized; 314 million and 317 million shares
outstanding at September 30, 2022 and December 31, 2021, respectively; no par value)
12,138 11,862 
Retained earningsRetained earnings13,292 13,673 Retained earnings14,123 13,548 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)(418)(500)Accumulated other comprehensive income (loss)(120)(318)
Total Sempra Energy shareholders’ equityTotal Sempra Energy shareholders’ equity24,554 23,373 Total Sempra Energy shareholders’ equity27,030 25,981 
Preferred stock of subsidiaryPreferred stock of subsidiary20 20 Preferred stock of subsidiary20 20 
Other noncontrolling interestsOther noncontrolling interests30 1,541 Other noncontrolling interests2,239 1,418 
Total equityTotal equity24,604 24,934 Total equity29,289 27,419 
Total liabilities and equityTotal liabilities and equity$70,472 $66,623 Total liabilities and equity$75,563 $72,045 
(1)    Derived from audited financial statements.
See Notes to Condensed Consolidated Financial Statements.
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SEMPRA ENERGYSEMPRA ENERGYSEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Nine months ended September 30, Nine months ended September 30,
20212020 20222021
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIES  CASH FLOWS FROM OPERATING ACTIVITIES  
Net incomeNet income$751 $3,673 Net income$1,877 $751 
Less: Income from discontinued operations, net of income tax— (1,850)
Income from continuing operations, net of income tax751 1,823 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:  Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortizationDepreciation and amortization1,376 1,242 Depreciation and amortization1,500 1,376 
Deferred income taxes and investment tax creditsDeferred income taxes and investment tax credits(159)(12)Deferred income taxes and investment tax credits387 (159)
Equity earningsEquity earnings(1,022)(822)Equity earnings(1,118)(1,022)
Foreign currency transaction losses, netForeign currency transaction losses, net10 95 Foreign currency transaction losses, net18 10 
Share-based compensation expenseShare-based compensation expense48 57 Share-based compensation expense49 48 
Fixed-price contracts and other derivativesFixed-price contracts and other derivatives338 25 Fixed-price contracts and other derivatives200 338 
OtherOther70 107 Other157 70 
Reserve for Aliso Canyon costsReserve for Aliso Canyon costs1,525 259 Reserve for Aliso Canyon costs(1,835)1,525 
Net change in other working capital componentsNet change in other working capital components(186)(396)Net change in other working capital components(267)(186)
Insurance receivable for Aliso Canyon costsInsurance receivable for Aliso Canyon costs350 31 
Distributions from investmentsDistributions from investments727 429 Distributions from investments643 727 
Insurance receivable for Aliso Canyon costs31 (165)
Changes in other noncurrent assets and liabilities, netChanges in other noncurrent assets and liabilities, net(528)38 Changes in other noncurrent assets and liabilities, net(506)(528)
Net cash provided by continuing operations2,981 2,680 
Net cash used in discontinued operations— (1,051)
Net cash provided by operating activitiesNet cash provided by operating activities2,981 1,629 Net cash provided by operating activities1,455 2,981 
CASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES  CASH FLOWS FROM INVESTING ACTIVITIES  
Expenditures for property, plant and equipmentExpenditures for property, plant and equipment(3,606)(3,313)Expenditures for property, plant and equipment(3,540)(3,606)
Expenditures for investments and acquisitionsExpenditures for investments and acquisitions(216)(229)Expenditures for investments and acquisitions(275)(216)
Proceeds from sale of assets— 22 
Distributions from investments365 761 
Purchases of nuclear decommissioning trust assetsPurchases of nuclear decommissioning trust assets(729)(1,091)Purchases of nuclear decommissioning trust assets(530)(729)
Proceeds from sales of nuclear decommissioning trust assetsProceeds from sales of nuclear decommissioning trust assets729 1,091 Proceeds from sales of nuclear decommissioning trust assets530 729 
Advances to unconsolidated affiliatesAdvances to unconsolidated affiliates(8)(32)Advances to unconsolidated affiliates— (8)
Repayments of advances to unconsolidated affiliatesRepayments of advances to unconsolidated affiliates— 7 Repayments of advances to unconsolidated affiliates626 — 
Distributions from investmentsDistributions from investments— 365 
OtherOther9 13 Other6 9 
Net cash used in continuing operations(3,456)(2,771)
Net cash provided by discontinued operations— 5,186 
Net cash (used in) provided by investing activities(3,456)2,415 
Net cash used in investing activitiesNet cash used in investing activities(3,183)(3,456)
CASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paidCommon dividends paid(1,070)(981)
Preferred dividends paidPreferred dividends paid(22)(77)
Issuances of common stockIssuances of common stock4 5 
Repurchases of common stockRepurchases of common stock(478)(39)
Issuances of debt (maturities greater than 90 days)Issuances of debt (maturities greater than 90 days)6,711 1,992 
Payments on debt (maturities greater than 90 days) and finance leasesPayments on debt (maturities greater than 90 days) and finance leases(3,365)(2,315)
(Decrease) increase in short-term debt, net(Decrease) increase in short-term debt, net(1,438)1,999 
Advances from unconsolidated affiliatesAdvances from unconsolidated affiliates28 40 
Proceeds from sales of noncontrolling interests, netProceeds from sales of noncontrolling interests, net1,732 7 
Purchases of noncontrolling interestsPurchases of noncontrolling interests— (221)
Distributions to noncontrolling interestsDistributions to noncontrolling interests(146)— 
Contributions from noncontrolling interestsContributions from noncontrolling interests15 — 
OtherOther(35)(13)
Net cash provided by financing activitiesNet cash provided by financing activities1,936 397 
Effect of exchange rate changes on cash, cash equivalents and restricted cashEffect of exchange rate changes on cash, cash equivalents and restricted cash(3)— 
Increase (decrease) in cash, cash equivalents and restricted cashIncrease (decrease) in cash, cash equivalents and restricted cash205 (78)
Cash, cash equivalents and restricted cash, January 1Cash, cash equivalents and restricted cash, January 1581 985 
Cash, cash equivalents and restricted cash, September 30Cash, cash equivalents and restricted cash, September 30$786 $907 
See Notes to Condensed Consolidated Financial Statements.
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SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in millions)
 Nine months ended September 30,
 20212020
 (unaudited)
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid$(981)$(872)
Preferred dividends paid(77)(107)
Issuances of preferred stock— 890 
Issuances of common stock5 10 
Repurchases of common stock(39)(565)
Issuances of debt (maturities greater than 90 days)1,992 5,934 
Payments on debt (maturities greater than 90 days) and finance leases(2,315)(4,387)
Increase (decrease) in short-term debt, net1,999 (1,871)
Advances from unconsolidated affiliates40 64 
Proceeds from sales of noncontrolling interests7 — 
Purchases of noncontrolling interests(221)(178)
Other(13)(29)
Net cash provided by (used in) continuing operations397 (1,111)
Net cash provided by discontinued operations— 401 
Net cash provided by (used in) financing activities397 (710)
Effect of exchange rate changes in continuing operations— (2)
Effect of exchange rate changes in discontinued operations— (3)
Effect of exchange rate changes on cash, cash equivalents and restricted cash— (5)
(Decrease) increase in cash, cash equivalents and restricted cash, including
discontinued operations
(78)3,329 
Cash, cash equivalents and restricted cash, including discontinued operations, January 1985 217 
Cash, cash equivalents and restricted cash, including discontinued operations, September 30$907 $3,546 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Interest payments, net of amounts capitalized$741 $781 
Income tax payments, including discontinued operations, net of refunds101 1,376 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES  
Increase in Cameron LNG JV investment for guarantee$22 $— 
Accrued capital expenditures572 460 
Increase in ARO for investment in PP&E, net33 — 
Increase in finance lease obligations for investment in PP&E35 72 
Derecognized PP&E for net investment in sales-type lease44 — 
Issuance of common stock in exchange for NCI and related AOCI1,373 — 
Contribution to Cameron LNG JV— 50 
Distribution from Cameron LNG JV— 50 
Distribution from Oncor Holdings8 — 
Equitization of long-term debt for deficit held by NCI— 22 
Conversion of mandatory convertible preferred stock2,258 — 
Preferred dividends declared but not paid22 50 
Common dividends issued in stock— 23 
Common dividends declared but not paid351 301 
SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in millions)
 Nine months ended September 30,
 20222021
 (unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Interest payments, net of amounts capitalized$732 $741 
Income tax payments, net of refunds241 101 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES  
Increase in Cameron LNG JV investment for guarantee— 22 
Repayment of advances from unconsolidated affiliate in lieu of distribution32 — 
Accrued capital expenditures738 572 
Increase in finance lease obligations for investment in PP&E33 35 
Derecognized PP&E for net investment in sales-type lease— 44 
Increase in ARO for investment in PP&E49 33 
Issuance of common stock in exchange for NCI and related AOCI— 1,373 
Common dividends declared but not paid360 351 
Conversion of mandatory convertible preferred stock— 2,258 
Preferred dividends declared but not paid22 22 
See Notes to Condensed Consolidated Financial Statements.
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SEMPRA ENERGYSEMPRA ENERGYSEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYCONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYCONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Preferred stockCommon
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Sempra
Energy
shareholders'
equity		Non-
controlling
interests		Total
equity		 Preferred stockCommon
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Sempra
Energy
shareholders'
equity		Non-
controlling
interests		Total
equity
(unaudited)
Three months ended September 30, 2022
Balance at June 30, 2022Balance at June 30, 2022$889 $12,121 $13,998 $(167)$26,841 $2,212 $29,053 
Net incomeNet income496 496 65 561 
Other comprehensive incomeOther comprehensive income47 47 20 67 
Share-based compensation expenseShare-based compensation expense17 17 17 
Dividends declared:Dividends declared:
Series C preferred stock ($12.19/share)Series C preferred stock ($12.19/share)(11)(11)(11)
Common stock ($1.15/share)Common stock ($1.15/share)(360)(360)(360)
Issuances of common stockIssuances of common stock1 1 1 
Repurchases of common stockRepurchases of common stock(2)(2)(2)
Noncontrolling interest activities:Noncontrolling interest activities:
ContributionsContributions2 2 
DistributionsDistributions(40)(40)
SaleSale1 1 1 
Balance at September 30, 2022Balance at September 30, 2022$889 $12,138 $14,123 $(120)$27,030 $2,259 $29,289 
(unaudited)
Three months ended September 30, 2021 Three months ended September 30, 2021
Balance at June 30, 2021Balance at June 30, 2021$1,454 $10,150 $14,291 $(444)$25,451 $241 $25,692 Balance at June 30, 2021$1,454 $10,150 $14,291 $(444)$25,451 $241 $25,692 
Net (loss) incomeNet (loss) income(637)(637)5 (632)Net (loss) income(637)(637)5 (632)
Other comprehensive income (loss)Other comprehensive income (loss)20 20 (2)18 Other comprehensive income (loss)20 20 (2)18 
Share-based compensation expenseShare-based compensation expense14 14 14 Share-based compensation expense14 14 14 
Dividends declared:Dividends declared:Dividends declared:
Series C preferred stock ($12.19/share)Series C preferred stock ($12.19/share)(11)(11)(11)Series C preferred stock ($12.19/share)(11)(11)(11)
Common stock ($1.10/share)Common stock ($1.10/share)(351)(351)(351)Common stock ($1.10/share)(351)(351)(351)
Conversion of series B preferred stockConversion of series B preferred stock(565)565 — — 
Conversion of series B preferred stock(565)565 — — 
Repurchases of common stockRepurchases of common stock(1)(1)(1)Repurchases of common stock(1)(1)(1)
Noncontrolling interest activities:Noncontrolling interest activities:Noncontrolling interest activities:
PurchasesPurchases63 6 69 (194)(125)Purchases63 6 69 (194)(125)
Balance at September 30, 2021Balance at September 30, 2021$889 $10,791 $13,292 $(418)$24,554 $50 $24,604 Balance at September 30, 2021$889 $10,791 $13,292 $(418)$24,554 $50 $24,604 
Three months ended September 30, 2020
Balance at June 30, 2020$3,147 $7,490 $13,511 $(542)$23,606 $1,780 $25,386 
Net income399 399 22 421 
Other comprehensive income34 34 4 38 
Share-based compensation expense19 19 19 
Dividends declared:
Series A preferred stock ($1.50/share)(26)(26)(26)
Series B preferred stock ($1.68/share)(10)(10)(10)
Series C preferred stock ($14.08/share)(12)(12)(12)
Common stock ($1.05/share)(302)(302)(302)
Repurchases of common stock(501)(501)(501)
Noncontrolling interest activities:
Purchases26 (5)21 (178)(157)
Balance at September 30, 2020$3,147 $7,034 $13,560 $(513)$23,228 $1,628 $24,856 
See Notes to Condensed Consolidated Financial Statements.
15

Table of Contents
SEMPRA ENERGYSEMPRA ENERGYSEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYCONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Preferred stockCommon
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Sempra
Energy
shareholders'
equity		Non-
controlling
interests		Total
equity		 Preferred stockCommon
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Sempra
Energy
shareholders'
equity		Non-
controlling
interests		Total
equity
(unaudited)
Nine months ended September 30, 2022
Balance at December 31, 2021Balance at December 31, 2021$889 $11,862 $13,548 $(318)$25,981 $1,438 $27,419 
Net incomeNet income1,690 1,690 187 1,877 
Other comprehensive incomeOther comprehensive income189 189 56 245 
Share-based compensation expenseShare-based compensation expense49 49 49 
Dividends declared:Dividends declared:
Series C preferred stock ($36.57/share)Series C preferred stock ($36.57/share)(33)(33)(33)
Common stock ($3.44/share)Common stock ($3.44/share)(1,081)(1,081)(1,081)
Preferred dividends of subsidiaryPreferred dividends of subsidiary(1)(1)(1)
Issuances of common stockIssuances of common stock4 4 4 
Repurchases of common stockRepurchases of common stock(478)(478)(478)
Noncontrolling interest activities:Noncontrolling interest activities:
ContributionsContributions15 15 
DistributionsDistributions(146)(146)
SaleSale701 9 710 709 1,419 
Balance at September 30, 2022Balance at September 30, 2022$889 $12,138 $14,123 $(120)$27,030 $2,259 $29,289 
(unaudited)
Nine months ended September 30, 2021 Nine months ended September 30, 2021
Balance at December 31, 2020Balance at December 31, 2020$3,147 $7,053 $13,673 $(500)$23,373 $1,561 $24,934 Balance at December 31, 2020$3,147 $7,053 $13,673 $(500)$23,373 $1,561 $24,934 
Net incomeNet income703 703 48 751 Net income703 703 48 751 
Other comprehensive incomeOther comprehensive income114 114 7 121 Other comprehensive income114 114 7 121 
Share-based compensation expenseShare-based compensation expense48 48 48 Share-based compensation expense48 48 48 
Dividends declared:Dividends declared:Dividends declared:
Series B preferred stock ($3.38/share)Series B preferred stock ($3.38/share)(19)(19)(19)Series B preferred stock ($3.38/share)(19)(19)(19)
Series C preferred stock ($36.57/share)Series C preferred stock ($36.57/share)(33)(33)(33)Series C preferred stock ($36.57/share)(33)(33)(33)
Common stock ($3.30/share)Common stock ($3.30/share)(1,031)(1,031)(1,031)Common stock ($3.30/share)(1,031)(1,031)(1,031)
Preferred dividends of subsidiaryPreferred dividends of subsidiary(1)(1)(1)Preferred dividends of subsidiary(1)(1)(1)
Conversion of series A preferred stockConversion of series A preferred stock(1,693)1,693 — — Conversion of series A preferred stock(1,693)1,693 — — 
Conversion of series B preferred stockConversion of series B preferred stock(565)565 — — Conversion of series B preferred stock(565)565 — — 
Issuances of common stockIssuances of common stock5 5 5 Issuances of common stock5 5 5 
Repurchases of common stockRepurchases of common stock(39)(39)(39)Repurchases of common stock(39)(39)(39)
Noncontrolling interest activities:Noncontrolling interest activities:Noncontrolling interest activities:
PurchasesPurchases1,462 (32)1,430 (1,567)(137)Purchases1,462 (32)1,430 (1,567)(137)
SalesSales4 4 1 5 Sales4 4 1 5 
Balance at September 30, 2021Balance at September 30, 2021$889 $10,791 $13,292 $(418)$24,554 $50 $24,604 Balance at September 30, 2021$889 $10,791 $13,292 $(418)$24,554 $50 $24,604 
Nine months ended September 30, 2020
Balance at December 31, 2019$2,258 $7,480 $11,130 $(939)$19,929 $1,876 $21,805 
Adoption of ASU 2016-13(7)(7)(2)(9)
Adjusted balance at December 31, 20192,258 7,480 11,123 (939)19,922 1,874 21,796 
Net income3,472 3,472 201 3,673 
Other comprehensive income (loss)431 431 (25)406 
Share-based compensation expense57 57 57 
Dividends declared:
Series A preferred stock ($4.50/share)(78)(78)(78)
Series B preferred stock ($5.06/share)(29)(29)(29)
Series C preferred stock ($15.71/share)(14)(14)(14)
Common stock ($3.14/share)(913)(913)(913)
Preferred dividends of subsidiary(1)(1)(1)
Issuance of series C preferred stock889889 889 
Issuances of common stock33 33 33 
Repurchases of common stock(565)(565)(565)
Noncontrolling interest activities:
Distributions(1)(1)
Purchases29 (5)24 (208)(184)
Acquisition1 1 
Equitization of long-term debt for
deficit held by NCI
22 22 
Deconsolidation(236)(236)
Balance at September 30, 2020$3,147 $7,034 $13,560 $(513)$23,228 $1,628 $24,856 
See Notes to Condensed Consolidated Financial Statements.

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SAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF OPERATIONSCONDENSED STATEMENTS OF OPERATIONSCONDENSED STATEMENTS OF OPERATIONS
(Dollars in millions)(Dollars in millions) (Dollars in millions)
Three months ended
September 30,		Nine months ended
September 30,		 Three months ended
September 30,		Nine months ended
September 30,
2021202020212020 2022202120222021
(unaudited) (unaudited)
Operating revenuesOperating revenues    Operating revenues    
ElectricElectric$1,307 $1,338 $3,534 $3,478 Electric$1,360 $1,307 $3,672 $3,534 
Natural gasNatural gas157 134 585 498 Natural gas209 157 741 585 
Total operating revenuesTotal operating revenues1,464 1,472 4,119 3,976 Total operating revenues1,569 1,464 4,413 4,119 
Operating expensesOperating expenses    Operating expenses    
Cost of electric fuel and purchased powerCost of electric fuel and purchased power324 430 869 921 Cost of electric fuel and purchased power316 324 806 869 
Cost of natural gasCost of natural gas37 27 159 118 Cost of natural gas65 37 260 159 
Operation and maintenanceOperation and maintenance389 414 1,152 1,050 Operation and maintenance439 389 1,256 1,152 
Depreciation and amortizationDepreciation and amortization226 200 659 598 Depreciation and amortization247 226 730 659 
Franchise fees and other taxesFranchise fees and other taxes93 86 264 237 Franchise fees and other taxes97 93 277 264 
Total operating expensesTotal operating expenses1,069 1,157 3,103 2,924 Total operating expenses1,164 1,069 3,329 3,103 
Operating incomeOperating income395 315 1,016 1,052 Operating income405 395 1,084 1,016 
Other income (expense), net4 (2)61 47 
Other income, netOther income, net12 4 68 61 
Interest incomeInterest income— 1 1 2 Interest income2 — 3 1 
Interest expenseInterest expense(104)(103)(307)(307)Interest expense(113)(104)(333)(307)
Income before income taxesIncome before income taxes295 211 771 794 Income before income taxes306 295 822 771 
Income tax expenseIncome tax expense(90)(33)(168)(161)Income tax expense(35)(90)(141)(168)
Net income/Earnings attributable to common sharesNet income/Earnings attributable to common shares$205 $178 $603 $633 Net income/Earnings attributable to common shares$271 $205 $681 $603 
See Notes to Condensed Financial Statements.
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SAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Pretax
amount		Income tax expenseNet-of-tax
amount		 Pretax
amount		Income tax expenseNet-of-tax
amount
(unaudited) (unaudited)
Three months ended September 30, 2021 and 2020 Three months ended September 30, 2022 and 2021
2022:2022:   
Net incomeNet income$306 $(35)$271 
Other comprehensive income (loss):Other comprehensive income (loss):   
Pension and other postretirement benefitsPension and other postretirement benefits1 — 1 
Total other comprehensive incomeTotal other comprehensive income1 — 1 
Comprehensive incomeComprehensive income$307 $(35)$272 
2021:2021:   2021:   
Net incomeNet income$295 $(90)$205 Net income$295 $(90)$205 
Other comprehensive income (loss):Other comprehensive income (loss):   Other comprehensive income (loss):   
Pension and other postretirement benefitsPension and other postretirement benefits1 — 1 Pension and other postretirement benefits1 — 1 
Total other comprehensive incomeTotal other comprehensive income1 — 1 Total other comprehensive income1 — 1 
Comprehensive incomeComprehensive income$296 $(90)$206 Comprehensive income$296 $(90)$206 
2020:   
Nine months ended September 30, 2022 and 2021
Net income/Comprehensive income$211 $(33)$178 
Nine months ended September 30, 2021 and 2020
2022:2022:   
Net incomeNet income$822 $(141)$681 
Other comprehensive income (loss):Other comprehensive income (loss):   
Pension and other postretirement benefitsPension and other postretirement benefits1 — 1 
Total other comprehensive incomeTotal other comprehensive income1 — 1 
Comprehensive incomeComprehensive income$823 $(141)$682 
2021:2021:   2021:   
Net incomeNet income$771 $(168)$603 Net income$771 $(168)$603 
Other comprehensive income (loss):Other comprehensive income (loss):   Other comprehensive income (loss):   
Pension and other postretirement benefitsPension and other postretirement benefits1 — 1 Pension and other postretirement benefits1 — 1 
Total other comprehensive incomeTotal other comprehensive income1 — 1 Total other comprehensive income1 — 1 
Comprehensive incomeComprehensive income$772 $(168)$604 Comprehensive income$772 $(168)$604 
2020:   
Net income$794 $(161)$633 
Other comprehensive income (loss):   
Pension and other postretirement benefits5 (1)4 
Total other comprehensive income5 (1)4 
Comprehensive income$799 $(162)$637 
See Notes to Condensed Financial Statements.

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SAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED BALANCE SHEETSCONDENSED BALANCE SHEETSCONDENSED BALANCE SHEETS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,December 31,September 30,December 31,
2021
2020(1)
 2022
2021(1)
(unaudited)  (unaudited) 
ASSETSASSETS  ASSETS  
Current assets:Current assets:  Current assets:  
Cash and cash equivalentsCash and cash equivalents$239 $262 Cash and cash equivalents$219 $25 
Accounts receivable – trade, netAccounts receivable – trade, net642 573 Accounts receivable – trade, net792 715 
Accounts receivable – other, netAccounts receivable – other, net96 143 Accounts receivable – other, net79 78 
Due from unconsolidated affiliates1 — 
Income taxes receivable, netIncome taxes receivable, net18 — Income taxes receivable, net26 9 
InventoriesInventories112 104 Inventories129 123 
Prepaid expensesPrepaid expenses197 153 Prepaid expenses218 174 
Regulatory assetsRegulatory assets253 174 Regulatory assets252 231 
Fixed-price contracts and other derivatives73 56 
Greenhouse gas allowancesGreenhouse gas allowances113 113 Greenhouse gas allowances13 13 
Other current assetsOther current assets4 22 Other current assets69 63 
Total current assetsTotal current assets1,748 1,600 Total current assets1,797 1,431 
Other assets:Other assets:  Other assets:  
Regulatory assetsRegulatory assets751 534 Regulatory assets1,083 786 
Greenhouse gas allowancesGreenhouse gas allowances142 111 
Nuclear decommissioning trustsNuclear decommissioning trusts1,003 1,019 Nuclear decommissioning trusts816 1,012 
Greenhouse gas allowances83 83 
Right-of-use assets – operating leasesRight-of-use assets – operating leases82 102 Right-of-use assets – operating leases284 185 
Wildfire fundWildfire fund342 363 Wildfire fund310 331 
Other long-term assetsOther long-term assets213 189 Other long-term assets165 154 
Total other assetsTotal other assets2,474 2,290 Total other assets2,800 2,579 
Property, plant and equipment:Property, plant and equipment:  Property, plant and equipment:  
Property, plant and equipmentProperty, plant and equipment25,824 24,436 Property, plant and equipment27,792 26,456 
Less accumulated depreciation and amortizationLess accumulated depreciation and amortization(6,263)(6,015)Less accumulated depreciation and amortization(6,630)(6,408)
Property, plant and equipment, netProperty, plant and equipment, net19,561 18,421 Property, plant and equipment, net21,162 20,048 
Total assetsTotal assets$23,783 $22,311 Total assets$25,759 $24,058 
(1)    Derived from audited financial statements.
See Notes to Condensed Financial Statements.
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SAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED BALANCE SHEETS (CONTINUED)CONDENSED BALANCE SHEETS (CONTINUED)CONDENSED BALANCE SHEETS (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,December 31, September 30,December 31,
2021
2020(1)
2022
2021(1)
(unaudited)  (unaudited) 
LIABILITIES AND EQUITYLIABILITIES AND EQUITY  LIABILITIES AND EQUITY  
Current liabilities:Current liabilities:  Current liabilities:  
Short-term debtShort-term debt$375 $— Short-term debt$— $776 
Accounts payableAccounts payable602 553 Accounts payable790 588 
Due to unconsolidated affiliatesDue to unconsolidated affiliates61 64 Due to unconsolidated affiliates93 97 
Interest payableInterest payable74 46 Interest payable76 50 
Accrued compensation and benefitsAccrued compensation and benefits138 135 Accrued compensation and benefits130 148 
Accrued franchise fees59 56 
Regulatory liabilitiesRegulatory liabilities53 61 Regulatory liabilities27 14 
Current portion of long-term debt and finance leasesCurrent portion of long-term debt and finance leases48 611 Current portion of long-term debt and finance leases486 49 
Customer depositsCustomer deposits33 56 Customer deposits35 30 
Greenhouse gas obligationsGreenhouse gas obligations113 113 Greenhouse gas obligations13 13 
Asset retirement obligationsAsset retirement obligations130 117 Asset retirement obligations97 86 
Other current liabilitiesOther current liabilities233 199 Other current liabilities342 260 
Total current liabilitiesTotal current liabilities1,919 2,011 Total current liabilities2,089 2,111 
Long-term debt and finance leasesLong-term debt and finance leases7,587 6,866 Long-term debt and finance leases8,502 7,581 
Deferred credits and other liabilities:Deferred credits and other liabilities:  Deferred credits and other liabilities:  
Regulatory liabilitiesRegulatory liabilities2,221 2,302 
Greenhouse gas obligationsGreenhouse gas obligations76 31 
Pension obligation, net of plan assetsPension obligation, net of plan assets61 92 Pension obligation, net of plan assets24 25 
Deferred income taxesDeferred income taxes2,203 2,019 Deferred income taxes2,459 2,275 
Deferred investment tax credits13 13 
Regulatory liabilities2,311 2,195 
Greenhouse gas obligations30 — 
Asset retirement obligationsAsset retirement obligations744 759 Asset retirement obligations783 804 
Deferred credits and otherDeferred credits and other581 626 Deferred credits and other774 680 
Total deferred credits and other liabilitiesTotal deferred credits and other liabilities5,943 5,704 Total deferred credits and other liabilities6,337 6,117 
Commitments and contingencies (Note 11)Commitments and contingencies (Note 11)00Commitments and contingencies (Note 11)
Shareholder's equity:Shareholder's equity:  Shareholder's equity:  
Preferred stock (45 million shares authorized; NaN issued)— — 
Preferred stock (45 million shares authorized; none issued)Preferred stock (45 million shares authorized; none issued)— — 
Common stock (255 million shares authorized; 117 million shares outstanding;
no par value)
Common stock (255 million shares authorized; 117 million shares outstanding;
no par value)
1,660 1,660 
Common stock (255 million shares authorized; 117 million shares outstanding;
no par value)
1,660 1,660 
Retained earningsRetained earnings6,683 6,080 Retained earnings7,180 6,599 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)(9)(10)Accumulated other comprehensive income (loss)(9)(10)
Total shareholder’s equityTotal shareholder’s equity8,334 7,730 Total shareholder’s equity8,831 8,249 
Total liabilities and shareholder's equityTotal liabilities and shareholder's equity$23,783 $22,311 Total liabilities and shareholder's equity$25,759 $24,058 
(1)    Derived from audited financial statements.
See Notes to Condensed Financial Statements.
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SAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF CASH FLOWSCONDENSED STATEMENTS OF CASH FLOWSCONDENSED STATEMENTS OF CASH FLOWS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Nine months ended September 30, Nine months ended September 30,
20212020 20222021
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIES  CASH FLOWS FROM OPERATING ACTIVITIES  
Net incomeNet income$603 $633 Net income$681 $603 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization659 598 Depreciation and amortization730 659 
Deferred income taxes and investment tax creditsDeferred income taxes and investment tax credits133 36 Deferred income taxes and investment tax credits91 133 
OtherOther(1)13 Other23 (1)
Net change in working capital componentsNet change in working capital components(187)(184)Net change in working capital components57 (187)
Changes in noncurrent assets and liabilities, netChanges in noncurrent assets and liabilities, net(183)(113)Changes in noncurrent assets and liabilities, net(214)(183)
Net cash provided by operating activitiesNet cash provided by operating activities1,024 983 Net cash provided by operating activities1,368 1,024 
CASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES  CASH FLOWS FROM INVESTING ACTIVITIES  
Expenditures for property, plant and equipmentExpenditures for property, plant and equipment(1,560)(1,323)Expenditures for property, plant and equipment(1,651)(1,560)
Purchases of nuclear decommissioning trust assetsPurchases of nuclear decommissioning trust assets(729)(1,091)Purchases of nuclear decommissioning trust assets(530)(729)
Proceeds from sales of nuclear decommissioning trust assetsProceeds from sales of nuclear decommissioning trust assets729 1,091 Proceeds from sales of nuclear decommissioning trust assets530 729 
OtherOther7 8 Other8 7 
Net cash used in investing activitiesNet cash used in investing activities(1,553)(1,315)Net cash used in investing activities(1,643)(1,553)
CASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES  CASH FLOWS FROM FINANCING ACTIVITIES  
Common dividends paidCommon dividends paid— (200)Common dividends paid(100)— 
Issuances of debt (maturities greater than 90 days)Issuances of debt (maturities greater than 90 days)1,120 1,598 Issuances of debt (maturities greater than 90 days)1,395 1,120 
Payments on debt (maturities greater than 90 days) and finance leasesPayments on debt (maturities greater than 90 days) and finance leases(606)(252)Payments on debt (maturities greater than 90 days) and finance leases(416)(606)
Decrease in short-term debt, netDecrease in short-term debt, net— (80)Decrease in short-term debt, net(401)— 
Debt issuance costsDebt issuance costs(8)(11)Debt issuance costs(9)(8)
Net cash provided by financing activitiesNet cash provided by financing activities506 1,055 Net cash provided by financing activities469 506 
(Decrease) increase in cash and cash equivalents(23)723 
Increase (decrease) in cash and cash equivalentsIncrease (decrease) in cash and cash equivalents194 (23)
Cash and cash equivalents, January 1Cash and cash equivalents, January 1262 10 Cash and cash equivalents, January 125 262 
Cash and cash equivalents, September 30Cash and cash equivalents, September 30$239 $733 Cash and cash equivalents, September 30$219 $239 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONSUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Interest payments, net of amounts capitalizedInterest payments, net of amounts capitalized$275 $276 Interest payments, net of amounts capitalized$303 $275 
Income tax payments, net of refundsIncome tax payments, net of refunds64 20 Income tax payments, net of refunds68 64 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIESSUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES  SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES  
Accrued capital expendituresAccrued capital expenditures$217 $184 Accrued capital expenditures$236 $217 
Increase in ARO for investment in PP&EIncrease in ARO for investment in PP&E18 — Increase in ARO for investment in PP&E1 18 
Increase in finance lease obligations for investment in PP&EIncrease in finance lease obligations for investment in PP&E23 26 Increase in finance lease obligations for investment in PP&E12 23 
See Notes to Condensed Financial Statements.
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SAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANYSAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITYCONDENSED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITYCONDENSED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Common
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Total
shareholder's
equity		 Common
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Total
shareholder's
equity
(unaudited)(unaudited)
Three months ended September 30, 2021Three months ended September 30, 2022
Balance at June 30, 2022Balance at June 30, 2022$1,660 $7,009 $(10)$8,659 
Net incomeNet income271 271 
Other comprehensive incomeOther comprehensive income1 1 
Common stock dividends declared ($0.86/share)Common stock dividends declared ($0.86/share)(100)(100)
Balance at September 30, 2022Balance at September 30, 2022$1,660 $7,180 $(9)$8,831 
Three months ended September 30, 2021
Balance at June 30, 2021Balance at June 30, 2021$1,660 $6,478 $(10)$8,128 Balance at June 30, 2021$1,660 $6,478 $(10)$8,128 
Net incomeNet income205 205 Net income205 205 
Other comprehensive incomeOther comprehensive income1 1 Other comprehensive income1 1 
Balance at September 30, 2021Balance at September 30, 2021$1,660 $6,683 $(9)$8,334 Balance at September 30, 2021$1,660 $6,683 $(9)$8,334 
Three months ended September 30, 2020 Nine months ended September 30, 2022
Balance at June 30, 2020$1,660 $5,711 $(12)$7,359 
Balance at December 31, 2021Balance at December 31, 2021$1,660 $6,599 $(10)$8,249 
Net incomeNet income178 178 Net income681 681 
Other comprehensive incomeOther comprehensive income1 1 
Balance at September 30, 2020$1,660 $5,889 $(12)$7,537 
Common stock dividends declared ($0.86/share)Common stock dividends declared ($0.86/share)(100)(100)
Balance at September 30, 2022Balance at September 30, 2022$1,660 $7,180 $(9)$8,831 
Nine months ended September 30, 2021Nine months ended September 30, 2021
Balance at December 31, 2020Balance at December 31, 2020$1,660 $6,080 $(10)$7,730 Balance at December 31, 2020$1,660 $6,080 $(10)$7,730 
Net incomeNet income603 603 Net income603 603 
Other comprehensive incomeOther comprehensive income1 1 Other comprehensive income1 1 
Balance at September 30, 2021Balance at September 30, 2021$1,660 $6,683 $(9)$8,334 Balance at September 30, 2021$1,660 $6,683 $(9)$8,334 
Nine months ended September 30, 2020
Balance at December 31, 2019$1,660 $5,456 $(16)$7,100 
Net income633 633 
Other comprehensive income4 4 
Common stock dividends declared ($1.72/share)(200)(200)
Balance at September 30, 2020$1,660 $5,889 $(12)$7,537 
See Notes to Condensed Financial Statements.
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SOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF OPERATIONSCONDENSED STATEMENTS OF OPERATIONSCONDENSED STATEMENTS OF OPERATIONS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended September 30,
20212020202120202022202120222021
(unaudited) (unaudited)
Operating revenuesOperating revenues$1,106 $842 $3,738 $3,247 Operating revenues$1,385 $1,106 $4,879 $3,738 
Operating expensesOperating expenses Operating expenses 
Cost of natural gasCost of natural gas240 92 736 476 Cost of natural gas441 240 1,577 736 
Operation and maintenanceOperation and maintenance546 494 1,574 1,399 Operation and maintenance590 546 1,746 1,574 
Aliso Canyon litigation and regulatory mattersAliso Canyon litigation and regulatory matters1,571 27 1,571 127 Aliso Canyon litigation and regulatory matters122 1,571 259 1,571 
Depreciation and amortizationDepreciation and amortization180 165 533 486 Depreciation and amortization190 180 565 533 
Franchise fees and other taxesFranchise fees and other taxes54 48 163 142 Franchise fees and other taxes62 54 181 163 
Total operating expensesTotal operating expenses2,591 826 4,577 2,630 Total operating expenses1,405 2,591 4,328 4,577 
Operating (loss) incomeOperating (loss) income(1,485)16 (839)617 Operating (loss) income(20)(1,485)551 (839)
Other (expense) income, net(39)(7)(2)21 
Other expense, netOther expense, net(43)(39)(5)(2)
Interest incomeInterest income— — — 2 Interest income3 — 4 — 
Interest expenseInterest expense(39)(39)(118)(119)Interest expense(50)(39)(135)(118)
(Loss) income before income taxes(Loss) income before income taxes(1,563)(30)(959)521 (Loss) income before income taxes(110)(1,563)415 (959)
Income tax benefit (expense)Income tax benefit (expense)437 6 335 (95)Income tax benefit (expense)28 437 (75)335 
Net (loss) incomeNet (loss) income(1,126)(24)(624)426 Net (loss) income(82)(1,126)340 (624)
Preferred dividendsPreferred dividends— — (1)(1)Preferred dividends— — (1)(1)
(Losses) earnings attributable to common shares(Losses) earnings attributable to common shares$(1,126)$(24)$(625)$425 (Losses) earnings attributable to common shares$(82)$(1,126)$339 $(625)
See Notes to Condensed Financial Statements.

23

Table of Contents
SOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Pretax
amount		Income tax benefit (expense)Net-of-tax
amount		 Pretax
amount		Income tax benefit (expense)Net-of-tax
amount
(unaudited) (unaudited)
Three months ended September 30, 2021 and 2020 Three months ended September 30, 2022 and 2021
2022:2022:   
Net lossNet loss$(110)$28 $(82)
Other comprehensive income (loss):Other comprehensive income (loss):
Pension and other postretirement benefitsPension and other postretirement benefits1 — 1 
Total other comprehensive incomeTotal other comprehensive income1 — 1 
Comprehensive lossComprehensive loss$(109)$28 $(81)
2021:2021:   2021:   
Net lossNet loss$(1,563)$437 $(1,126)Net loss$(1,563)$437 $(1,126)
Other comprehensive income (loss):Other comprehensive income (loss):Other comprehensive income (loss):
Pension and other postretirement benefitsPension and other postretirement benefits1 — 1 Pension and other postretirement benefits1 — 1 
Total other comprehensive incomeTotal other comprehensive income1 — 1 Total other comprehensive income1 — 1 
Comprehensive lossComprehensive loss$(1,562)$437 $(1,125)Comprehensive loss$(1,562)$437 $(1,125)
2020:   
Nine months ended September 30, 2022 and 2021
Net loss/Comprehensive loss$(30)$6 $(24)
Nine months ended September 30, 2021 and 2020
2022:2022:   
Net incomeNet income$415 $(75)$340 
Other comprehensive income (loss):Other comprehensive income (loss):
Financial instrumentsFinancial instruments1 — 1 
Pension and other postretirement benefitsPension and other postretirement benefits2 — 2 
Total other comprehensive incomeTotal other comprehensive income3 — 3 
Comprehensive incomeComprehensive income$418 $(75)$343 
2021:2021:   2021:   
Net lossNet loss$(959)$335 $(624)Net loss$(959)$335 $(624)
Other comprehensive income (loss):Other comprehensive income (loss):Other comprehensive income (loss):
Pension and other postretirement benefitsPension and other postretirement benefits2 — 2 Pension and other postretirement benefits2 — 2 
Total other comprehensive incomeTotal other comprehensive income2 — 2 Total other comprehensive income2 — 2 
Comprehensive lossComprehensive loss$(957)$335 $(622)Comprehensive loss$(957)$335 $(622)
2020:   
Net income$521 $(95)$426 
Other comprehensive income (loss):
Pension and other postretirement benefits1 — 1 
Total other comprehensive income1 — 1 
Comprehensive income$522 $(95)$427 
See Notes to Condensed Financial Statements.


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SOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANY
CONDENSED BALANCE SHEETSCONDENSED BALANCE SHEETSCONDENSED BALANCE SHEETS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,December 31, September 30,December 31,
2021
2020(1)
2022
2021(1)
(unaudited)  (unaudited) 
ASSETSASSETS  ASSETS  
Current assets:Current assets:  Current assets:  
Cash and cash equivalentsCash and cash equivalents$226 $4 Cash and cash equivalents$53 $37 
Accounts receivable – trade, netAccounts receivable – trade, net462 786 Accounts receivable – trade, net710 1,084 
Accounts receivable – other, netAccounts receivable – other, net86 64 Accounts receivable – other, net72 58 
Due from unconsolidated affiliatesDue from unconsolidated affiliates11 22 Due from unconsolidated affiliates24 49 
Income taxes receivable, netIncome taxes receivable, net16 — Income taxes receivable, net25 23 
InventoriesInventories168 153 Inventories293 172 
Regulatory assetsRegulatory assets37 16 Regulatory assets18 40 
Greenhouse gas allowancesGreenhouse gas allowances384 390 Greenhouse gas allowances79 75 
Other current assetsOther current assets62 47 Other current assets67 61 
Total current assetsTotal current assets1,452 1,482 Total current assets1,341 1,599 
Other assets:Other assets:  Other assets:  
Regulatory assetsRegulatory assets1,449 1,208 Regulatory assets1,481 1,148 
Insurance receivable for Aliso Canyon costsInsurance receivable for Aliso Canyon costs414 445 Insurance receivable for Aliso Canyon costs10 360 
Greenhouse gas allowancesGreenhouse gas allowances262 9 Greenhouse gas allowances578 290 
Right-of-use assets – operating leasesRight-of-use assets – operating leases61 74 Right-of-use assets – operating leases45 57 
Other long-term assetsOther long-term assets575 499 Other long-term assets624 627 
Total other assetsTotal other assets2,761 2,235 Total other assets2,738 2,482 
Property, plant and equipment:Property, plant and equipment:  Property, plant and equipment:  
Property, plant and equipmentProperty, plant and equipment22,445 21,180 Property, plant and equipment24,424 23,104 
Less accumulated depreciation and amortizationLess accumulated depreciation and amortization(6,739)(6,437)Less accumulated depreciation and amortization(7,178)(6,861)
Property, plant and equipment, netProperty, plant and equipment, net15,706 14,743 Property, plant and equipment, net17,246 16,243 
Total assetsTotal assets$19,919 $18,460 Total assets$21,325 $20,324 
(1)    Derived from audited financial statements.
See Notes to Condensed Financial Statements.
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SOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANY
CONDENSED BALANCE SHEETS (CONTINUED)CONDENSED BALANCE SHEETS (CONTINUED)CONDENSED BALANCE SHEETS (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,December 31, September 30,December 31,
2021
2020(1)
2022
2021(1)
(unaudited)  (unaudited) 
LIABILITIES AND SHAREHOLDERS’ EQUITYLIABILITIES AND SHAREHOLDERS’ EQUITY  LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:Current liabilities:  Current liabilities:  
Short-term debtShort-term debt$— $113 Short-term debt$1,227 $385 
Accounts payable – tradeAccounts payable – trade488 600 Accounts payable – trade652 775 
Accounts payable – otherAccounts payable – other133 122 Accounts payable – other177 142 
Due to unconsolidated affiliatesDue to unconsolidated affiliates45 31 Due to unconsolidated affiliates42 36 
Accrued compensation and benefitsAccrued compensation and benefits203 189 Accrued compensation and benefits212 202 
Regulatory liabilitiesRegulatory liabilities462 79 Regulatory liabilities271 345 
Current portion of long-term debt and finance leasesCurrent portion of long-term debt and finance leases10 10 Current portion of long-term debt and finance leases315 11 
Customer depositsCustomer deposits15 48 Customer deposits17 13 
Reserve for Aliso Canyon costsReserve for Aliso Canyon costs1,962 150 Reserve for Aliso Canyon costs145 1,980 
Greenhouse gas obligationsGreenhouse gas obligations384 390 Greenhouse gas obligations79 75 
Asset retirement obligationsAsset retirement obligations58 59 Asset retirement obligations75 77 
Other current liabilitiesOther current liabilities310 291 Other current liabilities291 271 
Total current liabilitiesTotal current liabilities4,070 2,082 Total current liabilities3,503 4,312 
Long-term debt and finance leasesLong-term debt and finance leases4,769 4,763 Long-term debt and finance leases5,175 4,773 
Deferred credits and other liabilities:Deferred credits and other liabilities:  Deferred credits and other liabilities:  
Regulatory liabilitiesRegulatory liabilities1,091 1,100 
Greenhouse gas obligationsGreenhouse gas obligations407 174 
Pension obligation, net of plan assetsPension obligation, net of plan assets784 853 Pension obligation, net of plan assets474 551 
Deferred income taxesDeferred income taxes1,032 1,406 Deferred income taxes1,197 1,039 
Deferred investment tax credits7 8 
Regulatory liabilities1,067 1,177 
Reserve for Aliso Canyon costs14 301 
Greenhouse gas obligations140 — 
Asset retirement obligationsAsset retirement obligations2,377 2,309 Asset retirement obligations2,628 2,505 
Deferred credits and otherDeferred credits and other413 417 Deferred credits and other416 428 
Total deferred credits and other liabilitiesTotal deferred credits and other liabilities5,834 6,471 Total deferred credits and other liabilities6,213 5,797 
Commitments and contingencies (Note 11)Commitments and contingencies (Note 11)00Commitments and contingencies (Note 11)
Shareholders’ equity:Shareholders’ equity:  Shareholders’ equity:  
Preferred stock (11 million shares authorized; 1 million shares outstanding)Preferred stock (11 million shares authorized; 1 million shares outstanding)22 22 Preferred stock (11 million shares authorized; 1 million shares outstanding)22 22 
Common stock (100 million shares authorized; 91 million shares outstanding; no par value)Common stock (100 million shares authorized; 91 million shares outstanding; no par value)1,666 866 Common stock (100 million shares authorized; 91 million shares outstanding; no par value)2,316 1,666 
Retained earningsRetained earnings3,587 4,287 Retained earnings4,124 3,785 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)(29)(31)Accumulated other comprehensive income (loss)(28)(31)
Total shareholders’ equityTotal shareholders’ equity5,246 5,144 Total shareholders’ equity6,434 5,442 
Total liabilities and shareholders’ equityTotal liabilities and shareholders’ equity$19,919 $18,460 Total liabilities and shareholders’ equity$21,325 $20,324 
(1)    Derived from audited financial statements.
See Notes to Condensed Financial Statements.

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SOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF CASH FLOWSCONDENSED STATEMENTS OF CASH FLOWSCONDENSED STATEMENTS OF CASH FLOWS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Nine months ended September 30, Nine months ended September 30,
20212020 20222021
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIESCASH FLOWS FROM OPERATING ACTIVITIES  CASH FLOWS FROM OPERATING ACTIVITIES  
Net (loss) income$(624)$426 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net income (loss)Net income (loss)$340 $(624)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortizationDepreciation and amortization533 486 Depreciation and amortization565 533 
Deferred income taxes and investment tax creditsDeferred income taxes and investment tax credits(467)(38)Deferred income taxes and investment tax credits77 (467)
OtherOther47 42 Other51 47 
Reserve for Aliso Canyon costsReserve for Aliso Canyon costs1,525 259 Reserve for Aliso Canyon costs(1,835)1,525 
Net change in other working capital components385 254 
Net change in working capital componentsNet change in working capital components98 385 
Insurance receivable for Aliso Canyon costsInsurance receivable for Aliso Canyon costs31 (165)Insurance receivable for Aliso Canyon costs350 31 
Changes in other noncurrent assets and liabilities, netChanges in other noncurrent assets and liabilities, net(393)124 Changes in other noncurrent assets and liabilities, net(408)(393)
Net cash provided by operating activities1,037 1,388 
Net cash (used in) provided by operating activitiesNet cash (used in) provided by operating activities(762)1,037 
CASH FLOWS FROM INVESTING ACTIVITIESCASH FLOWS FROM INVESTING ACTIVITIES  CASH FLOWS FROM INVESTING ACTIVITIES  
Expenditures for property, plant and equipmentExpenditures for property, plant and equipment(1,417)(1,345)Expenditures for property, plant and equipment(1,394)(1,417)
Net cash used in investing activitiesNet cash used in investing activities(1,417)(1,345)Net cash used in investing activities(1,394)(1,417)
CASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIESCASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paidCommon dividends paid(75)(50)Common dividends paid— (75)
Preferred dividends paidPreferred dividends paid(1)(1)Preferred dividends paid(1)(1)
Equity contribution from Sempra EnergyEquity contribution from Sempra Energy800 — Equity contribution from Sempra Energy650 800 
Issuances of debt (maturities greater than 90 days)Issuances of debt (maturities greater than 90 days)— 949 Issuances of debt (maturities greater than 90 days)1,497 — 
Payments on finance leasesPayments on finance leases(9)(9)Payments on finance leases(10)(9)
Decrease in short-term debt, net(113)(630)
Increase (decrease) in short-term debt, netIncrease (decrease) in short-term debt, net42 (113)
Debt issuance costsDebt issuance costs— (8)Debt issuance costs(6)— 
Net cash provided by financing activitiesNet cash provided by financing activities602 251 Net cash provided by financing activities2,172 602 
Increase in cash and cash equivalentsIncrease in cash and cash equivalents222 294 Increase in cash and cash equivalents16 222 
Cash and cash equivalents, January 1Cash and cash equivalents, January 14 10 Cash and cash equivalents, January 137 4 
Cash and cash equivalents, September 30Cash and cash equivalents, September 30$226 $304 Cash and cash equivalents, September 30$53 $226 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONSUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION  
Interest payments, net of amounts capitalizedInterest payments, net of amounts capitalized$119 $114 Interest payments, net of amounts capitalized$123 $119 
Income tax payments, net of refundsIncome tax payments, net of refunds170 1 Income tax payments, net of refunds— 170 
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIESSUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES  SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES  
Accrued capital expendituresAccrued capital expenditures$205 $146 Accrued capital expenditures$235 $205 
Increase (decrease) in ARO for investment in PP&EIncrease (decrease) in ARO for investment in PP&E48 (1)
Increase in finance lease obligations for investment in PP&EIncrease in finance lease obligations for investment in PP&E12 46 Increase in finance lease obligations for investment in PP&E21 12 
Common dividends declared but not paid— 50 
See Notes to Condensed Financial Statements.

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SOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANYSOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYCONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYCONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Preferred
stock		Common
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Total
shareholders’
equity		 Preferred
stock		Common
stock		Retained
earnings		Accumulated
other
comprehensive
income (loss)		Total
shareholders’
equity
(unaudited)
Three months ended September 30, 2022
Balance at June 30, 2022Balance at June 30, 2022$22 $1,816 $4,206 $(29)$6,015 
Net lossNet loss(82)(82)
Other comprehensive incomeOther comprehensive income1 1 
Dividends declared:Dividends declared:
Preferred stock ($0.38/share)Preferred stock ($0.38/share)— — 
Equity contribution from Sempra EnergyEquity contribution from Sempra Energy500 500 
Balance at September 30, 2022Balance at September 30, 2022$22 $2,316 $4,124 $(28)$6,434 
(unaudited)
Three months ended September 30, 2021Three months ended September 30, 2021
Balance at June 30, 2021Balance at June 30, 2021$22 $866 $4,713 $(30)$5,571 Balance at June 30, 2021$22 $866 $4,713 $(30)$5,571 
Net lossNet loss(1,126)(1,126)Net loss(1,126)(1,126)
Other comprehensive incomeOther comprehensive income1 1 Other comprehensive income1 1 
Dividends declared:Dividends declared:Dividends declared:
Preferred stock ($0.38/share)Preferred stock ($0.38/share)— — Preferred stock ($0.38/share)— — 
Equity contribution from Sempra EnergyEquity contribution from Sempra Energy800 800 Equity contribution from Sempra Energy800 800 
Balance at September 30, 2021Balance at September 30, 2021$22 $1,666 $3,587 $(29)$5,246 Balance at September 30, 2021$22 $1,666 $3,587 $(29)$5,246 
Three months ended September 30, 2020 Nine months ended September 30, 2022
Balance at June 30, 2020$22 $866 $4,282 $(22)$5,148 
Balance at December 31, 2021Balance at December 31, 2021$22 $1,666 $3,785 $(31)$5,442 
Net loss(24)(24)
Net incomeNet income340 340 
Other comprehensive incomeOther comprehensive income3 3 
Dividends declared:Dividends declared:Dividends declared:
Preferred stock ($0.38/share)— — 
Common stock ($0.55/share)(50)(50)
Balance at September 30, 2020$22 $866 $4,208 $(22)$5,074 
Preferred stock ($1.13/share)Preferred stock ($1.13/share)(1)(1)
Equity contribution from Sempra EnergyEquity contribution from Sempra Energy650 650 
Balance at September 30, 2022Balance at September 30, 2022$22 $2,316 $4,124 $(28)$6,434 
Nine months ended September 30, 2021Nine months ended September 30, 2021
Balance at December 31, 2020Balance at December 31, 2020$22 $866 $4,287 $(31)$5,144 Balance at December 31, 2020$22 $866 $4,287 $(31)$5,144 
Net lossNet loss(624)(624)Net loss(624)(624)
Other comprehensive incomeOther comprehensive income2 2 Other comprehensive income2 2 
Dividends declared:Dividends declared:Dividends declared:
Preferred stock ($1.13/share)Preferred stock ($1.13/share)(1)(1)Preferred stock ($1.13/share)(1)(1)
Common stock ($0.82/share)Common stock ($0.82/share)(75)(75)Common stock ($0.82/share)(75)(75)
Equity contribution from Sempra EnergyEquity contribution from Sempra Energy800 800 Equity contribution from Sempra Energy800 800 
Balance at September 30, 2021Balance at September 30, 2021$22 $1,666 $3,587 $(29)$5,246 Balance at September 30, 2021$22 $1,666 $3,587 $(29)$5,246 
Nine months ended September 30, 2020
Balance at December 31, 2019$22 $866 $3,883 $(23)$4,748 
Net income426 426 
Other comprehensive income1 1 
Dividends declared:
Preferred stock ($1.13/share)(1)(1)
Common stock ($1.10/share)(100)(100)
Balance at September 30, 2020$22 $866 $4,208 $(22)$5,074 
See Notes to Condensed Financial Statements.


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL INFORMATION AND OTHER FINANCIAL DATA
PRINCIPLES OF CONSOLIDATION
Sempra
Sempra’s Condensed Consolidated Financial Statements include the accounts of Sempra Energy, a California-based holding company doing business as Sempra, and its consolidated entities. Sempra’s business activities are organized under 5In the fourth quarter of 2021, we formed Sempra Infrastructure, which resulted in a change to our reportable segments. Historical segment disclosures have been restated to conform with the current presentation of our four separate reportable segments, which we discuss in Note 12. All references in these Notes to our reportable segments are not intended to refer to any legal entity with the same or similar name.
SDG&E
SDG&E’s common stock is wholly owned by Enova Corporation, which is a wholly owned subsidiary of Sempra.
SoCalGas
SoCalGas’ common stock is wholly owned by Pacific Enterprises, which is a wholly owned subsidiary of Sempra.
BASIS OF PRESENTATION
This is a combined report of Sempra, SDG&E and SoCalGas. We provide separate information for SDG&E and SoCalGas as required. References in this report to “we,” “our,” “us” and “Sempra” are to Sempra and its consolidated entities, collectively, unless otherwise stated or indicated by the context. We refer to SDG&E and SoCalGas collectively as the California Utilities. Sempra Infrastructure Partners (formerly Sempra Global) is the holding company for our subsidiaries that are not subject to California or Texas utility regulation. We have eliminated intercompany accounts and transactions within the consolidated financial statements of each reporting entity.
Throughout these Notes, we refer to the following as Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements when discussed together or collectively:
▪the Condensed Consolidated Financial Statements and related Notes of Sempra;
▪the Condensed Financial Statements and related Notes of SDG&E; and
▪the Condensed Financial Statements and related Notes of SoCalGas.
We have prepared our Condensed Consolidated Financial Statements in conformity with U.S. GAAP and in accordance with the interim-period-reportinginterim period reporting requirements of Form 10-Q and applicable rules of the SEC. The financial statements reflect all adjustments that are necessary for a fair presentation of the results for the interim periods. These adjustments are only of a normal, recurring nature. Results of operations for interim periods are not necessarily indicative of results for the entire year or for any other period. We evaluated events and transactions that occurred after September 30, 20212022 through the date the financial statements were issued and, in the opinion of management, the accompanying statements reflect all adjustments necessary for a fair presentation.
All December 31, 20202021 balance sheet information in the Condensed Consolidated Financial Statements has been derived from our audited 20202021 Consolidated Financial Statements in the Annual Report. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the interim-period-reportinginterim period reporting provisions of U.S. GAAP and the SEC.
We describe our significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report and the impact of the adoption of new accounting standards on those policies in Note 2 below. We follow the same accounting policies for interim period reporting purposes.
You should read theThe information contained in this report should be read in conjunction with the Annual Report.
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Discontinued Operations
In January 2019, our board of directors approved a plan to sell our South American businesses based on our strategic focus on North America. We determined that these businesses, which previously constituted the Sempra South American Utilities segment, and certain activities associated with these businesses, met the held-for-sale criteria. These businesses are presented as discontinued operations, which we discuss further in Note 5. We completed the sales of our South American businesses in the second quarter of 2020. Our discussions in the Notes below relate only to our continuing operations unless otherwise noted.
Regulated Operations
The California UtilitiesSDG&E, SoCalGas and Sempra Mexico’sInfrastructure’s natural gas distribution utility, Ecogas, prepare their financial statements in accordance with the provisions of U.S. GAAP governing rate-regulated operations. We discuss revenue recognition and the effects of regulation at our utilities in Notes 3 and 4 below and in Notes 1, 3 and 4 of the Notes to Consolidated Financial Statements in the Annual Report.
Our Sempra Texas Utilities segment is comprised of our equity method investments in holding companies that own interests in regulated electric transmission and distribution utilities in Texas.
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Our Sempra MexicoInfrastructure segment includes the operating companies of our subsidiary, IEnova, as well as certain holding companies and risk management activity. Certain business activities at IEnova are regulated by the CRE and meet the regulatory accounting requirements of U.S. GAAP. Pipeline projects currently under construction at IEnova that meet the regulatory accounting requirements of U.S. GAAP record the impact of AFUDC related to equity. We discuss AFUDC below and in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash equivalents are highly liquid investments with original maturities of three months or less at the date of purchase.
Restricted cash includes:
▪for Sempra Infrastructure, funds fully drawn against Gazprom’s letters of credit, including draws associated with its LNG storage and regasification agreement that we discuss in Note 11, and funds denominated in Mexican pesos to pay for rights-of-way, license fees, permits, topographic surveys and other costs pursuant to trust and debt agreements related to pipeline projects
▪for Parent and other, funds held in a delisting trust for the purpose of purchasing the remaining publicly owned IEnova shares
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on Sempra’s Condensed Consolidated Balance Sheets to the sum of such amounts reported on Sempra’s Condensed Consolidated Statements of Cash Flows. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASHRECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASHRECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,December 31,
20212020 September 30,
2022		December 31,
2021
Cash and cash equivalentsCash and cash equivalents$873 $960 Cash and cash equivalents$685 $559 
Restricted cash, currentRestricted cash, current31 22 Restricted cash, current49 19 
Restricted cash, noncurrentRestricted cash, noncurrent3 3 Restricted cash, noncurrent52 3 
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash FlowsTotal cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows$907 $985 
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of
Cash Flows
$786 $581 

CREDIT LOSSES
We are exposed to credit losses from financial assets measured at amortized cost, including trade and other accounts receivable, and amounts due from unconsolidated affiliates.affiliates, our net investment in sales-type leases and a note receivable. We are also exposed to credit losses from off-balance sheet arrangements through Sempra’s guarantee related to Cameron LNG JV’s SDSRA, which we discuss in Note 6.
We regularly monitor and evaluate credit losses and record allowances for expected credit losses, if necessary, for trade and other accounts receivable using a combination of factors, including past-due status based on contractual terms, trends in write-offs, the age of the receivable,receivables and customer payment patterns, historical and industry trends, counterparty creditworthiness, economic conditions and specific events, such as bankruptcies.bankruptcies, pandemics and other factors. We write off financial assets measured at amortized cost in the period in which we determine they are not recoverable. We record recoveries of amounts previously written off when it is known that they will be recovered.
In connection with the COVID-19 pandemic,2021, SDG&E and SoCalGas applied, on behalf of their customers, for financial assistance from the California Utilities implemented certain measures to assist customers, including suspending service disconnections due to nonpayment for all customers (except for SoCalGas’ noncore customers), waiving late payment fees,Department of Community Services and offering flexible payment plans. Such measures ended on June 30, 2021, except for the suspension of service disconnections that ended on September 30, 2021. At the CPUC’s direction,Development under the California UtilitiesArrearage Payment Program, which provided funds of $63 million and $79 million for SDG&E and SoCalGas, respectively. In the first quarter of 2022, SDG&E and SoCalGas received and applied the amounts directly to eligible customer accounts to reduce past due balances. In June 2022, AB 205 was approved establishing, among other things, the 2022 California Arrearage Payment Program. SDG&E and SoCalGas have started to automatically enrollapplied for funding from this program on behalf of their residential and small business customers with past-duepast due balances in long-term repayment plans. The CPUC is continuing to consider the impacts of any state or federal relief programs on customer arrearages and, if further debt relief is warranted.approved, may receive up to $51 million and $59 million, respectively, of such funding in the first quarter of 2023.
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As we discuss in Note 4, the CPUC authorized each of the California Utilities to track and request recovery of incremental costs, including uncollectible expenses, associated with complying with customer protection measures ordered by the CPUC related to the COVID-19 pandemic.
In connection with a separate CPUC decision addressing residential service disconnections, the California Utilities each established a two-way balancing account to record the uncollectible expenses associated with residential customers’ inability to pay their electric or gas bills, including as a result of the relief from outstanding utility bill amounts provided under the AMP. We discuss the AMP in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.
The California Utilities have recorded increases in their allowances for expected credit losses primarily related to expected forgiveness of outstanding utility bill amounts, including increases due to the effect of the COVID-19 pandemic, for participating, income-qualified residential customers eligible under the AMP. Our businesses will continue to monitor macroeconomic factors and customer payment patterns when evaluating their allowances for credit losses, which may increase significantly due to the effects of the COVID-19 pandemic or other factors.
We provide below allowances and changes in allowances for credit losses for trade receivables and other accounts receivable. The California Utilitiesreceivables. SDG&E and SoCalGas record changes in the allowances for credit losses related to Accounts Receivable – Trade in regulatory accounts.
TRADE AND OTHER ACCOUNTS RECEIVABLE – ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
20212020
Sempra:
Allowances for credit losses at January 1$138 $29 
Incremental allowance upon adoption of ASU 2016-13— 1 
Provisions for expected credit losses96 84 
Write-offs(28)(11)
Allowances for credit losses at September 30(1)
$206 $103 
SDG&E:
Allowances for credit losses at January 1$69 $14 
Provisions for expected credit losses30 44 
Write-offs(16)(6)
Allowances for credit losses at September 30(2)
$83 $52 
SoCalGas:
Allowances for credit losses at January 1$68 $15 
Provisions for expected credit losses64 40 
Write-offs(12)(5)
Allowances for credit losses at September 30(3)
$120 $50 
(1)    At September 30, 2021, includes $146 million in Accounts Receivable – Trade, Net, $50 million in Accounts Receivable – Other, Net and $10 million in Other Long-Term Assets.
(2)    At September 30, 2021, includes $58 million in Accounts Receivable – Trade, Net, $21 million in Accounts Receivable – Other, Net and $4 million in Other Long-Term Assets.
(3)    At September 30, 2021, includes $85 million in Accounts Receivable – Trade, Net, $29 million in Accounts Receivable – Other, Net and $6 million in Other Long-Term Assets.
CHANGES IN ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
20222021
Sempra:
Allowances for credit losses at January 1$136 $138 
Provisions for expected credit losses111 96 
Write-offs(57)(28)
Allowances for credit losses at September 30$190 $206 
SDG&E:
Allowances for credit losses at January 1$66 $69 
Provisions for expected credit losses51 30 
Write-offs(30)(16)
Allowances for credit losses at September 30$87 $83 
SoCalGas:
Allowances for credit losses at January 1$69 $68 
Provisions for expected credit losses58 64 
Write-offs(27)(12)
Allowances for credit losses at September 30$100 $120 

For amountsAllowances for credit losses related to accounts receivable are included in the Condensed Consolidated Balance Sheets as follows:
ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
September 30,December 31,
20222021
Sempra:
Accounts receivable – trade, net$151 $94 
Accounts receivable – other, net37 39 
Other long-term assets2 3 
Total allowances for credit losses$190 $136 
SDG&E:
Accounts receivable – trade, net$64 $42 
Accounts receivable – other, net22 22 
Other long-term assets1 2 
Total allowances for credit losses$87 $66 
SoCalGas:
Accounts receivable – trade, net$84 $51 
Accounts receivable – other, net15 17 
Other long-term assets1 1 
Total allowances for credit losses$100 $69 
As we discuss below in “Transactions with Affiliates,” we had a loan due from an unconsolidated affiliates,affiliate that was paid in full in July 2022. At December 31, 2021, $1 million of expected credit losses are included in noncurrent Due From Unconsolidated Affiliates on Sempra’s Condensed Consolidated Balance Sheet.
As we discuss below in “Note Receivable,” we have an interest-bearing promissory note due from KKR. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses if necessary,on this note receivable, including compounded interest and unamortized transaction costs, based on credit quality indicators such as external credit ratings, published default rate studies, the maturity date of the instrument and past delinquencies. However, we do not record allowances for expected credit losses related to accrued interest receivable on loans due from unconsolidated affiliates because we write off such amounts, if any, through a reversal of interest income in the period we determine such amounts are uncollectible. In the absence of external credit ratings, we may utilize an internally developed credit rating based on our analysisrating. At September 30, 2022 and December 31, 2021, $7 million and $8 million, respectively, of a counterparty’s financial statements to determine our expected credit losses.losses are included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheets.
As we discuss below in “Transactions with Affiliates,” Sempra has loans due from unconsolidated affiliates with varying tenors, interest rates and currencies. We provide below the allowances and changes in allowances for credit losses for loans and other amounts due from unconsolidated affiliates.
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AMOUNTS DUE FROM UNCONSOLIDATED AFFILIATES – ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
20212020
Sempra:
Allowances for credit losses at January 1$3 $— 
Allowance established upon adoption of ASU 2016-13— 6 
Reductions to expected credit losses(2)(3)
Allowances for credit losses at September 30(1)
$1 $3 
(1)    At September 30, 2021, $1 million is included in Due from Unconsolidated Affiliates – Noncurrent.

As we discuss in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report, Sempra previously provided guarantees for the benefit of Cameron LNG JV related to its construction-period debt obligations for a maximum aggregate amount of $4.0 billion. In March 2021, Cameron LNG JV reached financial completion of the three-train liquefaction project, which terminated the guarantees. There are no longer any expected credit losses related to these terminated guarantees.
As we discuss below in Note 6, Sempra provided a guarantee for the benefit of Cameron LNG JV related to amounts withdrawn by Sempra LNGInfrastructure from the SDSRA. On a quarterly basis, we evaluate credit losses and record liabilities for expected credit losses on this off-balance sheet arrangement based on external credit ratings, published default rate studies and the maturity date of the arrangement. At September 30, 2022 and December 31, 2021, $6 million and $7 million, respectively, of expected credit losses of $7 million related to this guarantee are included in Deferred Credits and Other on Sempra’s Condensed Consolidated Balance Sheet.Sheets.
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INVENTORIES
The components of inventories are as follows:
INVENTORY BALANCES
(Dollars in millions)
 Natural gasLNGMaterials and suppliesTotal
 September 30, 2021 December 31, 2020September 30, 2021 December 31, 2020September 30, 2021 December 31, 2020September 30, 2021 December 31, 2020
Sempra$169 $118 $17 $7 $185 $183 $371 $308 
SDG&E— — — — 112 104 112 104 
SoCalGas110 94 — — 58 59 168 153 
INVENTORY BALANCES
(Dollars in millions)
 SempraSDG&ESoCalGas
 September 30,
2022		 December 31,
2021		September 30,
2022		 December 31,
2021		September 30,
2022		 December 31,
2021
Natural gas$249 $164 $1 $— $214 $114 
LNG32 27 — — — — 
Materials and supplies225 198 128 123 79 58 
Total$506 $389 $129 $123 $293 $172 

NOTE RECEIVABLE
In November 2021, Sempra loaned $300 million to KKR in exchange for an interest-bearing promissory note that is due in full no later than October 2029 and bears compound interest at 5% per annum, which may be paid quarterly or added to the outstanding principal at the election of KKR. At September 30, 2022 and December 31, 2021, Other Long-Term Assets includes $312 million and $297 million, respectively, of outstanding principal, compounded interest and unamortized transaction costs, net of allowance for credit losses, and at December 31, 2021, Other Current Assets includes $3 million of interest receivable on Sempra’s Condensed Consolidated Balance Sheets.

WILDFIRE FUND
In July 2019, the Wildfire Legislation was signed into law to address certain issues related to catastrophic wildfires in the State of California and their impact on electric IOUs. We discuss the Wildfire Legislation further in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
In July 2021,August 2022, the CPUCOEIS approved SDG&E’s 20212022 Wildfire Mitigation Plan, Update. In July 2021,which is effective until the CPUC’s Wildfire Safety Division became the Office of Energy Infrastructure Safety (OEIS) under the California Natural Resources Agency. As successor to the Wildfire Safety Division, OEIS maintains the duties and responsibilities of the former Wildfire Safety Division with respect to Wildfire Mitigation Plans.approves a new plan.
SDG&E submitted its request to the OEIS for a 2021its annual wildfire safety certification in September 2021.2022. OEIS has until December 7, 20212022 to issue the certification or provide written notice explaining why additional time is needed. SDG&E’s existing safety certification remains valid until this pending request is resolved.
In a complaint filed in U.S. District Court for the Northern District of California in July 2019, plaintiffs seek to invalidate AB 1054 based on allegations that the legislation violates federal law. The district court dismissed the complaint and the plaintiffs have petitioned the U.S. Court of Appeals for the Ninth Circuit for review.

CAPITALIZED FINANCING COSTS
Capitalized financing costs include capitalized interest costs and AFUDC related to both debt and equity financing of construction projects. We capitalize interest costs incurred to finance capital projects and interest at equity method investments that have not commenced planned principal operations.
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The table below summarizes capitalized interestfinancing costs, comprised of AFUDC and AFUDC.capitalized interest.
CAPITALIZED FINANCING COSTSCAPITALIZED FINANCING COSTSCAPITALIZED FINANCING COSTS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30,Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
SempraSempra$52 $51 $166 $149 Sempra$65 $52 $182 $166 
SDG&ESDG&E24 26 82 79 SDG&E30 24 84 82 
SoCalGasSoCalGas18 14 49 39 SoCalGas19 18 54 49 

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OTHER INTANGIBLE ASSETS
Other Intangible Assets included on Sempra’s Condensed Consolidated Balance Sheets are as follows:
OTHER INTANGIBLE ASSETS
(Dollars in millions)
Amortization period (years)September 30,
2021		December 31,
2020
Renewable energy transmission and consumption permits15 to 19$169 $169 
O&M agreement2366 66 
PPA14190 — 
Other10 to indefinite15 15 
440 250 
Less accumulated amortization:
Renewable energy transmission and consumption permits(38)(32)
O&M agreement(11)(9)
PPA(7)— 
Other(8)(7)
(64)(48)
$376 $202 

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Other Intangible Assets at September 30, 2021 primarily include:
▪renewable energy transmission and consumption permits previously granted by the CRE at the Ventika wind power generation facilities, Don Diego Solar and Border Solar;
▪a favorable O&M agreement acquired in connection with the acquisition of Ductos y Energéticos del Norte, S. de R.L. de C.V.; and
▪an intangible asset of $190 million, representing the relative fair value of the PPA that was acquired in connection with the acquisition of ESJ in March 2021.
Intangible assets subject to amortization are amortized over their estimated useful lives. Amortization expense for intangible assets was $6 million, including $4 million recorded against revenues, and $3 million in the three months ended September 30, 2021 and 2020, respectively, and $16 million, including $7 million recorded against revenues, and $8 million in the nine months ended September 30, 2021 and 2020, respectively. We estimate the remaining amortization expense in 2021 to be $7 million, including $3 million recorded against revenues, and amortization expense of $26 million per year for the next four years, including $13 million recorded against revenues.

VARIABLE INTEREST ENTITIES
We consolidate a VIE if we are the primary beneficiary of the VIE. Our determination of whether we are the primary beneficiary is based on qualitative and quantitative analyses, which assess:
▪the purpose and design of the VIE;
▪the nature of the VIE’s risks and the risks we absorb;
▪the power to direct activities that most significantly impact the economic performance of the VIE; and
▪the obligation to absorb losses or the right to receive benefits that could be significant to the VIE.
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We will continue to evaluate our VIEs for any changes that may impact our determination of whether an entity is a VIE and if we are the primary beneficiary.
SDG&E
SDG&E’s power procurement is subject to reliability requirements that may require SDG&E to enter into various PPAs that include variable interests. SDG&E evaluates the respective entities to determine if variable interests exist and, based on the qualitative and quantitative analyses described above, if SDG&E, and indirectly Sempra, is the primary beneficiary.
SDG&E has agreements under which it purchases power generated by facilities for which it supplies all of the natural gas to fuel the power plant (i.e., tolling agreements). SDG&E’s obligation to absorb natural gas costs may be a significant variable interest. In addition, SDG&E has the power to direct the dispatch of electricity generated by these facilities. Based on our analysis, the ability to direct the dispatch of electricity may have the most significant impact on the economic performance of the entity owning the generating facility because of the associated exposure to the cost of natural gas, which fuels the plants, and the value of electricity produced. To the extent that SDG&E (1) is obligated to purchase and provide fuel to operate the facility, (2) has the power to direct the dispatch, and (3) purchases all of the output from the facility for a substantial portion of the facility’s useful life, SDG&E may be the primary beneficiary of the entity owning the generating facility. SDG&E determines if it is the primary beneficiary in these cases based on a qualitative approach in which it considers the operational characteristics of the facility, including its expected power generation output relative to its capacity to generate and the financial structure of the entity, among other factors. If SDG&E determines that it is the primary beneficiary, SDG&E and Sempra consolidate the entity that owns the facility as a VIE.
In addition to tolling agreements, other variable interests involve various elements of fuel and power costs, and other components of cash flows expected to be paid to or received by our counterparties. In most of these cases, the expectation of variability is not substantial, and SDG&E generally does not have the power to direct activities, including the operation and maintenance activities of the generating facility, that most significantly impact the economic performance of the other VIEs. If our ongoing evaluation of these VIEs were to conclude that SDG&E becomes the primary beneficiary and consolidation by SDG&E becomes necessary, the effects could be significant to the financial position and liquidity of SDG&E and Sempra.
SDG&E determined that none of its PPAs and tolling agreements resulted in SDG&E being the primary beneficiary of a VIE at September 30, 20212022 and December 31, 2020.2021. PPAs and tolling agreements that relate to SDG&E’s involvement with VIEs are primarily accounted for as finance leases. The carrying amounts of the assets and liabilities under these contracts are included in PP&E, net, and finance lease liabilities with balances of $1,223$1,200 million and $1,237$1,217 million at September 30, 20212022 and December 31, 2020,2021, respectively. SDG&E recovers costs incurred on PPAs, tolling agreements and other variable interests through CPUC-approved long-term power procurement plans. SDG&E has no residual interest in the respective entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 16 of the Notes to Consolidated Financial Statements in the Annual Report. As a result, SDG&E’s potential exposure to loss from its variable interest in these VIEs is not significant.
Sempra Texas Utilities
Our 100% interest in Oncor Holdings is a VIE that owns an 80.25% interest in Oncor.VIE. Sempra is not the primary beneficiary of this VIE because of the structural and operational ring-fencing and governance measures in place that prevent us from having the power to direct the significant activities of Oncor Holdings. As a result, we do not consolidate Oncor Holdings and instead account for our ownership interest as an equity method investment. See Note 6 of the Notes to Consolidated Financial Statements in the Annual Report for additional information about our equity method investment in Oncor Holdings and restrictions on our ability to influence its activities. Our maximum exposure to loss, which fluctuates over time, from our interest in Oncor Holdings does not exceed the carrying value of our investment, which was $12,475$13,558 million at September 30, 20212022 and $12,440$12,947 million at December 31, 2020.2021.
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Sempra LNGInfrastructure
Cameron LNG JV
Cameron LNG JV is a VIE principally due to contractual provisions that transfer certain risks to customers. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of Cameron LNG JV, including LNG production and operation and maintenance activities at the liquefaction facility. Therefore, we account for our investment in Cameron LNG JV under the equity method. The carrying value of our investment, including amounts recognized in AOCI related to interest-rate cash flow hedges at Cameron LNG JV, was $454$766 million at September 30, 20212022 and $433$514 million at
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December 31, 2020.2021. Our maximum exposure to loss, which fluctuates over time, includes the carrying value of our investment and our obligation under the SDSRA, which we discuss in Note 6.
CFIN
As we discuss in Note 6, in July 2020, Sempra entered into a Support Agreement which was amended in June 2021, for the benefit of CFIN, which is a VIE. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of CFIN, including modification, prepayment, and refinance decisions related to the financing arrangement with external lenders and Cameron LNG JV’s four project owners as well as the ability to determine and enforce remedies in the event of default. The conditional obligations of the Support Agreement represent a variable interest that we measure at fair value on a recurring basis (see Note 9). Sempra’s maximum exposure to loss under the terms of the Support Agreement is $979 million.
ECA LNG Phase 1
ECA LNG Phase 1 is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that ECA LNG Phase 1 will require future capital contributions or other financial support to finance the construction of the facility. Sempra is the primary beneficiary of this VIE because we have the power to direct the development activities related to the construction of the liquefaction facility, which we consider to be the most significant activities of ECA LNG Phase 1 during the construction phase of its natural gas liquefaction export project. As a result, we consolidate ECA LNG Phase 1. Sempra LNG consolidated $522$983 million and $207$632 million of assets at September 30, 20212022 and December 31, 2020,2021, respectively, consisting primarily of PP&E, net, and Accounts Receivable – Other attributable to ECA LNG Phase 1 that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $367$677 million and $49$455 million of liabilities at September 30, 20212022 and December 31, 2020,2021, respectively, consisting primarily of long-term debt, short-term debt and accounts payable attributable to ECA LNG Phase 1 for which creditors do not have recourse to the general credit of Sempra. Additionally, as we discuss in Note 7, of the Notes to Consolidated Financial Statements in the Annual Report, Sempra, IEnova and TOTALTotalEnergies SE have provided guarantees for 83.4% and 16.6%, respectively, of the loan facility supporting construction of the liquefaction facility based on their respective proportionate ownership interest in ECA LNG Phase 1.facility.

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PENSION AND OTHER POSTRETIREMENT BENEFITS
Settlement Accounting for Lump Sum Payments
Sempra recorded settlement charges of $7 million in the nine months ended September 30, 2021 and $13 million and $22 million in the three months and nine months ended September 30, 2020, respectively, in net periodic benefit cost for lump sum payments from its nonqualified pension plan that were in excess of the plan’s service cost plus interest cost.
Net Periodic Benefit Cost
The following three tables provide the components of net periodic benefit cost. The components of net periodic benefit cost, other than the service cost component, are included in the Other (Expense) Income, Net, table below.
NET PERIODIC BENEFIT COST – SEMPRA
(Dollars in millions)
 Pension benefitsOther postretirement benefits
 Three months ended September 30,
 2022202120222021
Service cost$27 $36 $4 $6 
Interest cost29 28 7 7 
Expected return on assets(46)(44)(16)(14)
Amortization of:  
Prior service cost (credit)3 3 (1)(1)
Actuarial loss (gain)8 12 (4)(3)
Net periodic benefit cost (credit)21 35 (10)(5)
Regulatory adjustments87 73 10 5 
Total expense recognized$108 $108 $— $— 
 Nine months ended September 30,
 2022202120222021
Service cost$110 $109 $17 $17 
Interest cost88 84 21 21 
Expected return on assets(137)(130)(48)(44)
Amortization of:    
Prior service cost (credit)8 8 (2)(2)
Actuarial loss (gain)19 34 (11)(7)
Settlement charges— 7 — — 
Net periodic benefit cost (credit)88 112 (23)(15)
Regulatory adjustments84 66 23 15 
Total expense recognized$172 $178 $— $— 
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NET PERIODIC BENEFIT COST – SEMPRA
NET PERIODIC BENEFIT COST – SDG&ENET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Pension benefitsOther postretirement benefits Pension benefitsOther postretirement benefits
Three months ended September 30, Three months ended September 30,
2021202020212020 2022202120222021
Service costService cost$36 $31 $6 $5 Service cost$8 $9 $1 $2 
Interest costInterest cost28 32 7 8 Interest cost7 6 1 1 
Expected return on assetsExpected return on assets(44)(41)(14)(14)Expected return on assets(13)(11)(2)(2)
Amortization of:Amortization of:  Amortization of:  
Prior service cost (credit)3 3 (1)(1)
Actuarial loss (gain)Actuarial loss (gain)12 9 (3)(2)Actuarial loss (gain)— 1 (1)(1)
Settlement charges— 13 — — 
Net periodic benefit cost (credit)Net periodic benefit cost (credit)35 47 (5)(4)Net periodic benefit cost (credit)2 5 (1)— 
Regulatory adjustmentsRegulatory adjustments73 37 5 4 Regulatory adjustments24 21 1 — 
Total expense recognizedTotal expense recognized$108 $84 $— $— Total expense recognized$26 $26 $— $— 
Nine months ended September 30, Nine months ended September 30,
2021202020212020 2022202120222021
Service costService cost$109 $97 $17 $14 Service cost$28 $26 $4 $4 
Interest costInterest cost84 97 21 24 Interest cost20 18 4 4 
Expected return on assetsExpected return on assets(130)(126)(44)(41)Expected return on assets(35)(36)(7)(7)
Amortization of:Amortization of:    Amortization of:  
Prior service cost (credit)8 9 (2)(2)
Actuarial loss (gain)Actuarial loss (gain)34 26 (7)(7)Actuarial loss (gain)1 2 (2)(2)
Settlement charges7 22 — — 
Net periodic benefit cost (credit)Net periodic benefit cost (credit)112 125 (15)(12)Net periodic benefit cost (credit)14 10 (1)(1)
Regulatory adjustmentsRegulatory adjustments66 31 15 12 Regulatory adjustments26 30 1 1 
Total expense recognizedTotal expense recognized$178 $156 $— $— Total expense recognized$40 $40 $— $— 

NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
 Pension benefitsOther postretirement benefits
 Three months ended September 30,
 2021202020212020
Service cost$9 $7 $2 $1 
Interest cost6 7 1 2 
Expected return on assets(11)(12)(2)(3)
Amortization of:  
Prior service cost— 1 — — 
Actuarial loss (gain)1 1 (1)(1)
Net periodic benefit cost (credit)5 4 — (1)
Regulatory adjustments21 22 — 1 
Total expense recognized$26 $26 $— $— 
 Nine months ended September 30,
 2021202020212020
Service cost$26 $23 $4 $3 
Interest cost18 22 4 5 
Expected return on assets(36)(37)(7)(8)
Amortization of:  
Prior service cost— 2 — — 
Actuarial loss (gain)2 3 (2)(2)
Net periodic benefit cost (credit)10 13 (1)(2)
Regulatory adjustments30 28 1 2 
Total expense recognized$40 $41 $— $— 
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NET PERIODIC BENEFIT COST – SOCALGASNET PERIODIC BENEFIT COST – SOCALGASNET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Pension benefitsOther postretirement benefits Pension benefitsOther postretirement benefits
Three months ended September 30, Three months ended September 30,
2021202020212020 2022202120222021
Service costService cost$23 $20 $5 $3 Service cost$16 $23 $3 $5 
Interest costInterest cost19 22 5 7 Interest cost20 19 5 5 
Expected return on assetsExpected return on assets(27)(27)(12)(11)Expected return on assets(30)(27)(13)(12)
Amortization of:Amortization of:  Amortization of:  
Prior service cost (credit)Prior service cost (credit)2 2 (1)(1)Prior service cost (credit)2 2 (1)(1)
Actuarial loss (gain)Actuarial loss (gain)8 6 (2)(1)Actuarial loss (gain)6 8 (3)(2)
Net periodic benefit cost (credit)Net periodic benefit cost (credit)25 23 (5)(3)Net periodic benefit cost (credit)14 25 (9)(5)
Regulatory adjustmentsRegulatory adjustments52 15 5 3 Regulatory adjustments63 52 9 5 
Total expense recognizedTotal expense recognized$77 $38 $— $— Total expense recognized$77 $77 $— $— 
Nine months ended September 30, Nine months ended September 30,
2021202020212020 2022202120222021
Service costService cost$73 $64 $13 $10 Service cost$72 $73 $13 $13 
Interest costInterest cost59 66 16 19 Interest cost61 59 16 16 
Expected return on assetsExpected return on assets(85)(81)(36)(32)Expected return on assets(94)(85)(40)(36)
Amortization of:Amortization of:   Amortization of:   
Prior service cost (credit)Prior service cost (credit)6 6 (2)(2)Prior service cost (credit)6 6 (2)(2)
Actuarial loss (gain)Actuarial loss (gain)27 19 (5)(5)Actuarial loss (gain)14 27 (9)(5)
Net periodic benefit cost (credit)Net periodic benefit cost (credit)80 74 (14)(10)Net periodic benefit cost (credit)59 80 (22)(14)
Regulatory adjustmentsRegulatory adjustments36 3 14 10 Regulatory adjustments58 36 22 14 
Total expense recognizedTotal expense recognized$116 $77 $— $— Total expense recognized$117 $116 $— $— 

RABBI TRUSTDEDICATED ASSETS IN SUPPORT OF CERTAIN BENEFITS PLANS
In support of its Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans, Sempra maintains dedicated assets, including a Rabbi Trust and investments in life insurance contracts, which totaled $539$487 million and $512$567 million at September 30, 20212022 and December 31, 2020,2021, respectively.

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SEMPRA EARNINGS PER COMMON SHARE
Basic EPS is calculated by dividing earnings attributable to common shares (from both continuing and discontinued operations) by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.
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EARNINGS PER COMMON SHARE COMPUTATIONS
(Dollars in millions, except per share amounts; shares in thousands)
 Three months ended September 30,Nine months ended September 30,
 2021202020212020
Numerator for continuing operations:    
(Loss) income from continuing operations, net of income tax$(632)$428 $751 $1,823 
Earnings attributable to noncontrolling interests(5)(22)(48)(191)
Preferred dividends(11)(48)(52)(121)
Preferred dividends of subsidiary— — (1)(1)
(Losses) earnings from continuing operations attributable to common shares$(648)$358 $650 $1,510 
Numerator for discontinued operations:
(Loss) income from discontinued operations, net of income tax$— $(7)$— $1,850 
Earnings attributable to noncontrolling interests— — — (10)
(Losses) earnings from discontinued operations attributable to common shares$— $(7)$— $1,840 
Numerator for (losses) earnings:
(Losses) earnings attributable to common shares$(648)$351 $650 $3,350 
Denominator:    
Weighted-average common shares outstanding for basic EPS(1)
319,144 289,490 309,350 291,771 
Dilutive effect of stock options and RSUs(2)(3)
— 1,092 797 1,164 
Dilutive effect of mandatory convertible preferred stock— — 707 — 
Weighted-average common shares outstanding for diluted EPS319,144 290,582 310,854 292,935 
Basic EPS:
(Losses) earnings from continuing operations$(2.03)$1.23 $2.10 $5.17 
(Losses) earnings from discontinued operations$— $(0.02)$— $6.31 
(Losses) earnings$(2.03)$1.21 $2.10 $11.48 
Diluted EPS:    
(Losses) earnings from continuing operations$(2.03)$1.23 $2.09 $5.15 
(Losses) earnings from discontinued operations$— $(0.02)$— $6.28 
(Losses) earnings$(2.03)$1.21 $2.09 $11.43 
EARNINGS PER COMMON SHARE COMPUTATIONS
(Dollars in millions, except per share amounts; shares in thousands)
 Three months ended September 30,Nine months ended September 30,
 2022202120222021
Numerator:    
Earnings (losses) attributable to common shares$485 $(648)$1,656 $650 
Denominator:    
Weighted-average common shares outstanding for basic EPS(1)
314,724 319,144 315,301 309,350 
Dilutive effect of stock options and RSUs(2)(3)
1,363 — 1,156 797 
Dilutive effect of mandatory convertible preferred stock— — — 707 
Weighted-average common shares outstanding for diluted EPS316,087 319,144 316,457 310,854 
EPS:
Basic$1.54 $(2.03)$5.25 $2.10 
Diluted$1.53 $(2.03)$5.23 $2.09 
(1)    Includes 451401 and 535451 fully vested RSUs held in our Deferred Compensation Plan for the three months ended September 30, 20212022 and 2020,2021, respectively, and 453402 and 536453 of such RSUs for the nine months ended September 30, 20212022 and 2020,2021, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.
(2)    In the three months ended September 30, 2021, the total weighted-average number of potentially dilutive stock options and RSUs was 699. However, these securities were not included in the computation of EPS because to do so would have decreased lossesloss per share.
(3)    Due to market fluctuations of both Sempra common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.

The potentially dilutive impact from stock options and RSUs is calculated under the treasury stock method. Under this method, proceeds based on the exercise price and unearned compensation are assumed to be used to repurchase shares on the open market at the average market price for the period, reducing the number of potential new shares to be issued and sometimes causing an antidilutive effect. The computation of diluted EPS for the three months and nine months ended September 30, 2022 excludes no potentially dilutive shares and 115,376 potentially dilutive shares, respectively, and the computation of diluted EPS for the three months and nine months ended September 30, 2021 excludes 147,840 and 240,654 potentially dilutive shares, respectively, because to include them would be antidilutive for the period. The computation of diluted EPS for the three months and nine months ended September 30, 2020 excludes 142,100 and 204,426 potentially dilutive shares, respectively, of such potentially dilutive shares. However, these shares could potentially dilute basic EPS in the future.
TheIn 2021, the potentially dilutive impact from mandatory convertible preferred stock iswas calculated under the if-converted method until the mandatory conversion date. After the mandatory conversion date, the converted shares are included in weighted-average common shares outstanding for basic EPS. As we discuss below in “Shareholders’ Equity and Noncontrolling Interests,” weWe converted all of our
38

series A preferred stock into common stock on January 15, 2021 and all of our series B preferred stock into common stock on July 15, 2021. The computation of diluted EPS for the three months and nine months ended September 30, 2021 excludes 639,733 and 3,037,812 potentially dilutive shares, respectively. The computation of diluted EPS for both the three months and nine months ended September 30, 2020 excludes 19,292,641 potentially dilutive shares.
PursuantIn January 2022, pursuant to Sempra’s share-based compensation plans, the Compensation and Talent Committee of Sempra’s board of directors granted 222,620219,898 nonqualified stock options, 323,889338,080 performance-based RSUs and 143,980150,286 service-based RSUs in the nine months ended September 30, 2021, primarily in January.RSUs.
We discuss share-based compensation plans and related awards and the terms and conditions of Sempra’s equity securities further in Notes 10, 13 and 14 of the Notes to Consolidated Financial Statements in the Annual Report.

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COMPREHENSIVE INCOME
The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, excludingafter amounts attributable to NCI.
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Foreign
currency
translation
adjustments		Financial
instruments		Pension
and other
postretirement
benefits		Total
accumulated other
comprehensive
income (loss)		 Foreign
currency
translation
adjustments		Financial
instruments		Pension
and other
postretirement
benefits		Total
accumulated other
comprehensive
income (loss)
Three months ended September 30, 2021 and 2020 Three months ended September 30, 2022 and 2021
Sempra:Sempra:Sempra:
Balance at June 30, 2022Balance at June 30, 2022$(65)$(30)$(72)$(167)
OCI before reclassificationsOCI before reclassifications— 40 — 40 
Amounts reclassified from AOCIAmounts reclassified from AOCI— 5 2 7 
Net OCINet OCI— 45 2 47 
Balance at September 30, 2022Balance at September 30, 2022$(65)$15 $(70)$(120)
   
Balance at June 30, 2021Balance at June 30, 2021$(88)$(265)$(91)$(444)Balance at June 30, 2021$(88)$(265)$(91)$(444)
OCI before reclassifications— 15 (8)7 
OCI before reclassifications(2)
OCI before reclassifications(2)
— 15 (8)7 
Amounts reclassified from AOCIAmounts reclassified from AOCI— 16 3 19 Amounts reclassified from AOCI— 16 3 19 
Net OCI(2)
Net OCI(2)
— 31 (5)26 
Net OCI(2)
— 31 (5)26 
Balance at September 30, 2021Balance at September 30, 2021$(88)$(234)$(96)$(418)Balance at September 30, 2021$(88)$(234)$(96)$(418)
SDG&E:SDG&E:
Balance at June 30, 2022Balance at June 30, 2022$(10)$(10)
   
Balance at June 30, 2020$(83)$(361)$(98)$(542)
Amounts reclassified from AOCIAmounts reclassified from AOCI1 1 
Net OCINet OCI1 1 
Balance at September 30, 2022Balance at September 30, 2022$(9)$(9)
OCI before reclassifications6 14 (7)13 
Amounts reclassified from AOCI— 4 12 16 
Net OCI(2)
6 18 5 29 
Balance at September 30, 2020$(77)$(343)$(93)$(513)
SDG&E:
Balance at June 30, 2021Balance at June 30, 2021$(10)$(10)Balance at June 30, 2021$(10)$(10)
Amounts reclassified from AOCIAmounts reclassified from AOCI1 1 Amounts reclassified from AOCI1 1 
Net OCINet OCI1 1 Net OCI1 1 
Balance at September 30, 2021Balance at September 30, 2021$(9)$(9)Balance at September 30, 2021$(9)$(9)
Balance as of June 30, 2020 and September 30, 2020$(12)$(12)
SoCalGas:SoCalGas:SoCalGas:
Balance at June 30, 2021$(13)$(17)$(30)
Balance at June 30, 2022Balance at June 30, 2022$(12)$(17)$(29)
Amounts reclassified from AOCIAmounts reclassified from AOCI— 1 1 Amounts reclassified from AOCI— 1 1 
Net OCINet OCI— 1 1 Net OCI— 1 1 
Balance at September 30, 2022Balance at September 30, 2022$(12)$(16)$(28)
Balance at June 30, 2021Balance at June 30, 2021$(13)$(17)$(30)
Amounts reclassified from AOCIAmounts reclassified from AOCI— 1 1 
Net OCINet OCI— 1 1 
Balance at September 30, 2021Balance at September 30, 2021$(13)$(16)$(29)Balance at September 30, 2021$(13)$(16)$(29)
Balance as of June 30, 2020 and September 30, 2020$(13)$(9)$(22)
(1)    All amounts are net of income tax, if subject to tax, and excludeafter NCI.
(2)    Total AOCI includes $(4) million and $3 million$4 of foreign currency translation adjustments and $(2) million and $2 million of financial instruments associated with the IEnova cash tender offer, in 2021 and purchases of NCI in 2020, respectively, which we discuss below in “Other Noncontrolling Interests – Sempra Mexico,Infrastructure.” and which doThis transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).

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CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Foreign
currency
translation
adjustments		Financial
instruments		Pension
and other
postretirement
benefits		Total
accumulated other
comprehensive
income (loss)		 Foreign
currency
translation
adjustments		Financial
instruments		Pension
and other
postretirement
benefits		Total
accumulated other
comprehensive
income (loss)
Nine months ended September 30, 2021 and 2020 Nine months ended September 30, 2022 and 2021
Sempra(2):
Balance as of December 31, 2020$(64)$(331)$(105)$(500)
Sempra:Sempra:
Balance at December 31, 2021Balance at December 31, 2021$(79)$(156)$(83)$(318)
OCI before reclassificationsOCI before reclassifications4 151 7 162 
Amounts reclassified from AOCI(2)
Amounts reclassified from AOCI(2)
10 20 6 36 
Net OCI(2)
Net OCI(2)
14 171 13 198 
Balance at September 30, 2022Balance at September 30, 2022$(65)$15 $(70)$(120)
   
OCI before reclassifications(24)52 (3)25 
Balance at December 31, 2020Balance at December 31, 2020$(64)$(331)$(105)$(500)
OCI before reclassifications(3)
OCI before reclassifications(3)
(24)52 (3)25 
Amounts reclassified from AOCIAmounts reclassified from AOCI— 45 12 57 Amounts reclassified from AOCI— 45 12 57 
Net OCI(3)
Net OCI(3)
(24)97 9 82 
Net OCI(3)
(24)97 9 82 
Balance as of September 30, 2021$(88)$(234)$(96)$(418)
Balance at September 30, 2021Balance at September 30, 2021$(88)$(234)$(96)$(418)
SDG&E:SDG&E:
Balance at December 31, 2021Balance at December 31, 2021$(10)$(10)
   
Balance as of December 31, 2019$(607)$(215)$(117)$(939)
OCI before reclassifications(4)
(115)(153)(5)(273)
Amounts reclassified from AOCI(4)
645 25 29 699 
Net OCI(3)
530 (128)24 426 
Balance as of September 30, 2020$(77)$(343)$(93)$(513)
SDG&E:
Balance as of December 31, 2020$(10)$(10)
Amounts reclassified from AOCIAmounts reclassified from AOCI1 1 
Net OCINet OCI1 1 
Balance at September 30, 2022Balance at September 30, 2022$(9)$(9)
Balance at December 31, 2020Balance at December 31, 2020$(10)$(10)
Amounts reclassified from AOCIAmounts reclassified from AOCI1 1 Amounts reclassified from AOCI1 1 
Net OCINet OCI1 1 Net OCI1 1 
Balance at September 30, 2021Balance at September 30, 2021$(9)$(9)Balance at September 30, 2021$(9)$(9)
Balance as of December 31, 2019$(16)$(16)
Amounts reclassified from AOCI(4)
4 4 
Net OCI4 4 
Balance as of September 30, 2020$(12)$(12)
SoCalGas:SoCalGas:SoCalGas:
Balance as of December 31, 2020$(13)$(18)$(31)
Balance at December 31, 2021Balance at December 31, 2021$(13)$(18)$(31)
Amounts reclassified from AOCIAmounts reclassified from AOCI— 2 2 Amounts reclassified from AOCI1 2 3 
Net OCINet OCI— 2 2 Net OCI1 2 3 
Balance as of September 30, 2021$(13)$(16)$(29)
Balance at September 30, 2022Balance at September 30, 2022$(12)$(16)$(28)
Balance as of December 31, 2019$(13)$(10)$(23)
Balance at December 31, 2020Balance at December 31, 2020$(13)$(18)$(31)
Amounts reclassified from AOCIAmounts reclassified from AOCI— 1 1 Amounts reclassified from AOCI— 2 2 
Net OCINet OCI— 1 1 Net OCI— 2 2 
Balance as of September 30, 2020$(13)$(9)$(22)
Balance at September 30, 2021Balance at September 30, 2021$(13)$(16)$(29)
(1)    All amounts are net of income tax, if subject to tax, and excludeafter NCI.
(2)    Includes discontinued operations in 2020.
(3)    Total AOCI includes $20 million and $3 million$9 of foreign currency translation adjustments and $12 million and $2 million of financial instruments associated with the IEnova exchange and cash tender offers in 2021 and purchasessale of NCI in 2020, respectively,to ADIA, which we discuss below in “Other Noncontrolling Interests – Sempra Mexico,Infrastructure.” and which doThis transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).
(4)(3)    Pension and Other Postretirement Benefits and Total AOCI include $3 millionincludes $(20) of foreign currency translation adjustments and $(12) of financial instruments associated with the IEnova exchange offer and cash tender offer, which we discuss below in transfers“Other Noncontrolling Interests – Sempra Infrastructure.” These transactions did not impact the Condensed Consolidated Statement of liabilities from SDG&E to Sempra in 2020 related to the nonqualified pension plans.Comprehensive Income (Loss).
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RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Details about accumulated other
comprehensive income (loss) components		Details about accumulated other
comprehensive income (loss) components		Amounts reclassified
from accumulated other
comprehensive income (loss)		 Affected line item on Condensed
Consolidated Statements of Operations		Details about accumulated other
comprehensive income (loss) components		Amounts reclassified
from accumulated other
comprehensive income (loss)		 Affected line item on Condensed
Consolidated Statements of Operations
Three months ended September 30,  Three months ended September 30, 
20212020  20222021 
Sempra:Sempra:   Sempra:   
Financial instruments:Financial instruments:   Financial instruments:   
Interest rate instrumentsInterest rate instruments$(1)$3 Interest ExpenseInterest rate instruments$2 $(1)Interest Expense
Interest rate instrumentsInterest rate instruments19 5 
Equity Earnings(1)
Interest rate instruments1 19 
Equity Earnings(1)
Interest rate and foreign exchange instrumentsInterest rate and foreign exchange instruments5 (4)Other (Expense) Income, NetInterest rate and foreign exchange instruments3 5 Other (Expense) Income, Net
Total before income tax23 4  
Total, before income taxTotal, before income tax6 23  
(2)(7)Income Tax (Expense) Benefit
Total, net of income taxTotal, net of income tax4 16  
1 — Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCITotal, net of income tax and after NCI$5 $16  
Pension and other postretirement benefits(2):
Pension and other postretirement benefits(2):
   
Amortization of actuarial lossAmortization of actuarial loss$2 $3 Other (Expense) Income, Net
Amortization of prior service costAmortization of prior service cost1 1 Other (Expense) Income, Net
Total, before income taxTotal, before income tax3 4 
(1)(1)Income Tax (Expense) Benefit
Total, net of income taxTotal, net of income tax$2 $3  
Total reclassifications for the period, net of income
tax and after NCI
Total reclassifications for the period, net of income
tax and after NCI
$7 $19  
SDG&E:SDG&E:   
Pension and other postretirement benefits(2):
Pension and other postretirement benefits(2):
Amortization of actuarial lossAmortization of actuarial loss$1 $— Other Income, Net
Amortization of prior service costAmortization of prior service cost— 1 Other Income, Net
Total reclassifications for the period, net of income
tax
Total reclassifications for the period, net of income
tax
$1 $1  
SoCalGas:SoCalGas:   
(7)— Income Tax Benefit (Expense)
Net of income tax$16 $4  
Pension and other postretirement benefits(2):
Pension and other postretirement benefits(2):
   
Pension and other postretirement benefits(2):
   
Amortization of actuarial lossAmortization of actuarial loss$3 $3 Other (Expense) Income, NetAmortization of actuarial loss$— $1 Other Expense, Net
Amortization of prior service costAmortization of prior service cost1 1 Other (Expense) Income, NetAmortization of prior service cost1 — Other Expense, Net
Settlement charges— 13 Other (Expense) Income, Net
Total before income tax4 17 
(1)(5)Income Tax Benefit (Expense)
Net of income tax$3 $12  
Total reclassifications for the period, net of tax$19 $16  
SDG&E:   
Pension and other postretirement benefits(2):
Amortization of prior service cost$1 $— Other Income (Expense), Net
Total reclassifications for the period, net of tax$1 $—  
SoCalGas:   
Pension and other postretirement benefits(2):
   
Amortization of actuarial loss$1 $— Other (Expense) Income, Net
Total reclassifications for the period, net of tax$1 $— 
Total reclassifications for the period, net of income
tax
Total reclassifications for the period, net of income
tax
$1 $1 
(1)    Equity earnings at Sempra Mexicoour foreign equity method investees are recognized after tax.
(2)    Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).
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RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Details about accumulated other
comprehensive income (loss) components		Details about accumulated other
comprehensive income (loss) components		Amounts reclassified
from accumulated other
comprehensive income (loss)		Affected line item on Condensed
Consolidated Statements of Operations		Details about accumulated other
comprehensive income (loss) components		Amounts reclassified
from accumulated other
comprehensive income (loss)		Affected line item on Condensed
Consolidated Statements of Operations
Nine months ended September 30,Nine months ended September 30,
2021202020222021
Sempra:Sempra:Sempra:
Foreign currency translation adjustmentsForeign currency translation adjustments$— $645 
(Loss) Income from Discontinued Operations,
Net of Income Tax
Foreign currency translation adjustments$1 $— Operation and Maintenance
Financial instruments:Financial instruments:Financial instruments:
Interest rate instrumentsInterest rate instruments$— $6 Interest ExpenseInterest rate instruments$1 $— Interest Expense
Interest rate instrumentsInterest rate instruments57 8 
Equity Earnings(1)
Interest rate instruments28 57 
Equity Earnings(1)
Foreign exchange instrumentsForeign exchange instruments1 (2)Revenues: Energy-Related BusinessesForeign exchange instruments(2)1 Revenues: Energy-Related Businesses
— (1)Other (Expense) Income, Net1 — Other (Expense) Income, Net
Foreign exchange instrumentsForeign exchange instruments1 (2)
Equity Earnings(1)
Foreign exchange instruments(1)1 
Equity Earnings(1)
Interest rate and foreign exchange instrumentsInterest rate and foreign exchange instruments— 1 Interest ExpenseInterest rate and foreign exchange instruments(1)— Interest Expense
4 33 Other (Expense) Income, Net(3)4 Other (Expense) Income, Net
Total before income tax63 43 
Total, before income taxTotal, before income tax23 63 
(16)(12)Income Tax Benefit (Expense)(7)(16)Income Tax (Expense) Benefit
Net of income tax47 31 
Total, net of income taxTotal, net of income tax16 47 
(2)(6)Earnings Attributable to Noncontrolling Interests4 (2)Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCITotal, net of income tax and after NCI$20 $45 
$45 $25 
Pension and other postretirement benefits(2):
Pension and other postretirement benefits(2):
  
Pension and other postretirement benefits(2):
  
Amortization of actuarial lossAmortization of actuarial loss$6 $6 Other (Expense) Income, NetAmortization of actuarial loss$6 $6 Other (Expense) Income, Net
Amortization of prior service costAmortization of prior service cost3 3 Other (Expense) Income, Net
Settlement chargesSettlement charges— 7 Other (Expense) Income, Net
Total, before income taxTotal, before income tax9 16 
(3)(4)Income Tax (Expense) Benefit
Total, net of income taxTotal, net of income tax$6 $12 
Total reclassifications for the period, net of income
tax and after NCI
Total reclassifications for the period, net of income
tax and after NCI
$27 $57 
SDG&E:SDG&E:  
Pension and other postretirement benefits(2):
Pension and other postretirement benefits(2):
Amortization of actuarial lossAmortization of actuarial loss— 6 
(Loss) Income from Discontinued Operations,
Net of Income Tax
Amortization of actuarial loss$1 $— Other Income, Net
Amortization of prior service costAmortization of prior service cost3 3 Other (Expense) Income, NetAmortization of prior service cost— 1 Other Income, Net
Settlement charges7 22 Other (Expense) Income, Net
Total before income tax16 37 
— (2)
(Loss) Income from Discontinued Operations,
Net of Income Tax
(4)(9)Income Tax Benefit (Expense)
Net of income tax$12 $26 
Total reclassifications for the period, net of tax$57 $696 
SDG&E:  
Pension and other postretirement benefits(2):
Amortization of prior service cost$1 $1 Other Income (Expense), Net
Total reclassifications for the period, net of tax$1 $1  
Total reclassifications for the period, net of income
tax
Total reclassifications for the period, net of income
tax
$1 $1  
SoCalGas:SoCalGas:   SoCalGas:   
Financial instruments:Financial instruments:
Interest rate instrumentsInterest rate instruments$1 $— Interest Expense
Pension and other postretirement benefits(2):
Pension and other postretirement benefits(2):
   
Pension and other postretirement benefits(2):
   
Amortization of actuarial lossAmortization of actuarial loss$1 $— Other (Expense) Income, NetAmortization of actuarial loss$1 $1 Other Expense, Net
Amortization of prior service costAmortization of prior service cost1 1 Other (Expense) Income, NetAmortization of prior service cost1 1 Other Expense, Net
Total, net of income taxTotal, net of income tax$2 $2 
Total reclassifications for the period, net of tax$2 $1 
Total reclassifications for the period, net of income
tax
Total reclassifications for the period, net of income
tax
$3 $2 
(1)    Equity earnings at Sempra Mexicoour foreign equity method investees are recognized after tax.
(2)    Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).

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SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS
Sempra Series A Preferred Stock
On January 15, 2021, we converted all 17,250,000 shares of series A preferred stock into 13,781,025 shares of our common stock based on a conversion rate of 0.7989 shares of our common stock for each issued and outstanding share of series A preferred
42

stock. As a consequence, no shares of series A preferred stock were outstanding after January 15, 2021 and the 17,250,000 shares that were formerly series A preferred stock have returned to the status of authorized and unissued shares of preferred stock.
Sempra Series B Preferred Stock
The terms of our series B preferred stock require a notice to holders when the aggregate adjustment to the conversion rates at which shares of series B preferred stock are convertible into shares of Sempra common stock is more than 1%. On July 7, 2021, we notified the holders of the series B preferred stock of such an adjustment. These adjustments, which resulted from the incremental impact of our second quarter dividend declared on our common stock and which became effective as of July 6, 2021, the ex-dividend date for such dividend, included adjustments to the minimum and maximum conversion rates and the related initial and threshold appreciation prices.
As of July 15, 2021, we had converted, pursuant to either early conversions at the election of the holder or the mandatory conversion of all outstanding shares, all 5,750,000 shares of series B preferred stock into an aggregate of 4,256,720 shares of our common stock and a nominal amount of cash in lieu of fractional share interests, based on a conversion rate of 0.7403 shares of our common stock for each issued and outstanding share of series B preferred stock. As a consequence, no shares of series B preferred stock were outstanding after July 15, 2021 and the 5,750,000 shares that were formerly series B preferred stock have returned to the status of authorized and unissued shares of preferred stock.
Sempra Series C Preferred Stock
On June 19, 2020, we issued 900,000 shares of our 4.875% fixed-rate reset cumulative redeemable perpetual preferred stock, series C (series C preferred stock) in a registered public offering at a price to the public of $1,000 per share and received net proceeds of $889 million after deducting the underwriting discount and equity issuance costs of $11 million. We used the net proceeds for working capital and other general corporate purposes, including the repayment of indebtedness.
Sempra Common Stock Repurchases
On SeptemberJanuary 11, 2007, our board of directors authorized the repurchase of shares of our common stock, provided that the amounts spent for such purpose do not exceed the greater of $2 billion or amounts spent to purchase no more than 40,000,000 shares. On July 1, 2020,2022, we entered into an ASR program under which we prepaid $500$200 million to repurchase shares of our common stock in a share forward transaction. A total of 1,472,756 shares were purchased under this program at an average price of $135.80 per share. The total number of shares purchased was determined by dividing the $500$200 million purchase price by the arithmetic average of the volume-weighted average trading prices of shares of our common stock during the valuation period of July 2, 2020January 12, 2022 through August 4, 2020,February 11, 2022, minus a fixed discount. The ASR program was completed on August 4, 2020 withFebruary 11, 2022.
On April 6, 2022, we entered into an aggregate of 4,089,375ASR program under which we prepaid $250 million to repurchase shares of Sempraour common stock repurchasedin a share forward transaction. A total of 1,471,957 shares were purchased under this program at an average price of $122.27$169.84 per share. FollowingThe total number of shares purchased was determined by dividing the completion$250 million purchase price by the arithmetic average of the ASR program, the aggregate dollar amount authorized by the September 11, 2007 share repurchase authorization was exhausted.
On July 6, 2020, our board of directors authorized the repurchasevolume-weighted average trading prices of shares of our common stock at any time and from time to time in an aggregate amount not to exceedduring the lesservaluation period of $2 billion or amounts spent to purchase no more thanApril 7, 2022 through April 25, million shares. No shares have been repurchased under this authorization.2022, minus a fixed discount. The ASR program was completed on April 25, 2022.
Other Noncontrolling Interests
The following table provides information about NCI held by others in subsidiaries or entities consolidated by us and recorded in Other Noncontrolling Interests in Total Equity on Sempra’s Condensed Consolidated Balance Sheets.
OTHER NONCONTROLLING INTERESTS
(Dollars in millions) 
 Percent ownership held by noncontrolling interests Equity held by
noncontrolling interests
 September 30,
2021		December 31,
2020		September 30,
2021		December 31,
2020
Sempra Mexico:    
IEnova0.1 %29.8 %$2 $1,487 
ICM Ventures Holdings B.V.— 17.5 — 7 
Sempra LNG:
ECA LNG Phase 116.6 29.0 28 46 
Parent and other:
PXiSE20.0 20.0 — 1 
Total Sempra  $30 $1,541 
OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
 Percent ownership held by noncontrolling interests Equity held by
noncontrolling interests
 September 30,
2022		December 31,
2021		September 30,
2022		December 31,
2021
Sempra Infrastructure:    
SI Partners30.0 %20.0 %$2,192 $1,384 
SI Partners subsidiaries(1)
0.1 - 16.60.1 - 16.647 34 
Total Sempra  $2,239 $1,418 
(1)SI Partners has subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.
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Sempra MexicoInfrastructure
Sale of NCI in SI Partners to ADIA. On June 1, 2022, Sempra and ADIA consummated the transaction contemplated under a purchase and sale agreement dated December 21, 2021 (the ADIA Purchase Agreement). Pursuant to the ADIA Purchase Agreement, ADIA acquired Class A Units representing a 10% NCI in SI Partners for a purchase price of $1.7 billion. Following the closing of the transaction, Sempra, KKR and ADIA directly or indirectly own 70%, 20%, and 10%, respectively, of the outstanding Class A Units of SI Partners, which excludes the non-voting Sole Risk Interests held only by Sempra. As a result of this sale to ADIA, we recorded a $709 million increase in equity held by NCI and an increase in Sempra’s shareholders’ equity of $710 million, net of $12 million in transaction costs and $300 million in tax impacts. Transaction costs include $10 million paid to ADIA for reimbursement of certain expenses that ADIA incurred in connection with closing the transaction.
At the closing of the sale of NCI in SI Partners to ADIA, SI Partners indirectly owned 99.9% of the outstanding shares of IEnova. To the extent we acquire additional shares of IEnova after the closing, such additional shares will be acquired by SI Partners, and KKR and ADIA will provide 20% and 10%, respectively, of the funding.
At the closing, KKR and ADIA (the Minority Partners) and Sempra entered into a second amended and restated agreement of limited partnership of SI Partners (the Amended LP Agreement), which governs their respective rights and obligations in respect of their ownership of SI Partners. Under the Amended LP Agreement, matters are decided generally by majority vote and the managers designated by Sempra, KKR and ADIA each, as a group, have voting power equivalent to the ownership percentage of their respective designating limited partner. Sempra maintains control of SI Partners. However, SI Partners and its controlled subsidiaries are prohibited from taking certain limited actions without the prior written approval of the Minority Partners (subject to each Minority Partner maintaining certain ownership thresholds in SI Partners). The minority protections held by ADIA constitute a subset of the minority protections granted to KKR.
The terms of the Amended LP Agreement applicable to ADIA in relation to capital contributions and distributions are generally consistent with those granted to KKR, with adjustments and limitations to take into account ADIA’s relative ownership percentage, including limiting ADIA’s priority distribution rights to the failure of certain proposed projects to receive a positive final investment decision by a certain date or to achieve specified thresholds of projected internal rates of return or leverage. The transfer rights and restrictions and registration rights in the Amended LP Agreement applicable to ADIA are also generally consistent with those granted to KKR, with adjustments and limitations to take into account ADIA’s relative ownership percentage, including a general restriction on ADIA transferring its interests in SI Partners to third parties (other than pursuant to certain specified permitted transfers) for a specified period following its entry into the Amended LP Agreement.
SI Partners Subsidiaries. In May 2021, we acquired 381,015,194 publicly owned shares of IEnova in exchange for 12,306,777 newly issued shares of our common stock upon completion of our exchange offer launched in the U.S. and Mexico. In additionMexico, which increased our ownership interest in IEnova from 70.2% to being traded on the New York Stock Exchange, Sempra’s common stock is now also listed on the Mexican Stock Exchange under the ticker symbol SRE.MX.96.4%. We acquired the IEnova shares at an exchange ratio of 0.0323 shares of our common stock for each one IEnova ordinary share. In connection with the exchange offer, we recorded a $1.4 billion decrease in equity held by NCI and an increase in Sempra’s shareholders’ equity of $1,361 million,$1.4 billion, net of $12 million in transactions costs, and increased our ownership interest in IEnova from 70.2% to 96.4%.costs.
In September 2021, we acquired 51,014,545 publicly owned shares of IEnova for 4.0 billion Mexican pesos (approximately $202 million in U.S. dollars) in cash upon completion of our tender offer launched in the U.S. and Mexico in August 2021, which increased our ownership interest in IEnova from 96.4% to 99.9%. We acquired these IEnova shares at a price of 78.97 Mexican pesos per share (approximately $3.95 per share in U.S. dollars). FollowingIn connection with the cash tender offer, we recorded a $188 million decrease in equity held by NCI and a decrease in Sempra’s shareholders’ equity of $14 million, including $1 million in transaction costs. IEnova’s shares were delisted from the Mexican Stock Exchange effective October 15, 2021. In connection with the delisting, we are maintaining a trust for the purpose of purchasing the 1,212,981 remaining publicly owned IEnova shares for 78.97 Mexican pesos per share, the same price per share that was offered in our cash tender offer. The trust will be in place through the earlier of April 14, 2022 or the date on which we acquire all the remaining publicly owned IEnova shares.
As a result of the increase in our ownership interest in IEnova, we recorded an increase in Sempra’s shareholders’ equity of $84 million offset by a deferred income tax asset related to the outside basis difference in IEnova’s shares. Upon completing
Following the saleexchange offer we completed in May 2021 and the cash tender offer we completed in September 2021, IEnova’s shares were delisted from the Mexican Stock Exchange effective October 15, 2021. In connection with the delisting, we are maintaining a trust for the purpose of a 20% equity interestpurchasing the 1,212,981 IEnova shares that remained publicly owned as of the completion of the cash tender offer for 78.97 Mexican pesos per share, the same price per share that was offered in Sempra Infrastructure Partnersour cash tender offer. The trust was to be in October 2021,place through the earlier of April 14, 2022 or the date on which we discuss below, we recorded $72 million in net income tax expense related toacquired all the utilization of this deferred income tax asset, netremaining publicly owned IEnova shares. On April 13, 2022, the term of the income tax effect reclassified from AOCItrust was amended so that it will remain in place until we terminate it, subject to earnings.any maximum term under applicable Mexican law. As of October 31, 2022, an aggregate of 861,439 of the remaining publicly owned IEnova shares had been acquired by such trust.
In the nine months ended September 30, 2020, IEnova repurchased 57,547,381 shares of its outstanding common stock held by NCI for $167 million, resulting in an increase in Sempra’s ownership interest in IEnova from 66.6% at December 31, 2019 to 69.2% at September 30, 2020.
In the first quarter of 2020, IEnova purchased additional shares in ICM Ventures Holdings B.V. for $9 million, increasing its ownership from 53.7% to 82.5%. ICM Ventures Holdings B.V. owns certain permits and land where IEnova is building a terminal for the receipt, storage and delivery of liquid fuels. In July 2021, IEnovaSempra Infrastructure acquired the remaining 17.5% interest held by NCI in ICM Ventures Holdings B.V. for $7 million.
Sempra LNG
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In March 2020, Sempra LNG purchased for $7 million the 24.6% minority interest in Liberty Gas Storage LLC, which owns 100% of LA Storage, LLC, increasing Sempra LNG’s ownership in Liberty Gas Storage LLC to 100%. Prior to the purchase, the minority partner converted $22 million in notes payable due from Sempra LNG to equity. As a result of the purchase, we recorded an increase in Sempra’s shareholders’ equity of $2 million for the difference between the carrying value and fair value related to the change in ownership.
Sempra Infrastructure Partners
Sale of NCI. On October 1, 2021, Sempra, its wholly owned subsidiary, Sempra Infrastructure Partners (formerly Sempra Global), and KKR consummated the transactions contemplated under a purchase and contribution agreement dated April 4, 2021 (as amended on September 27, 2021 to reflect immaterial revisions prior to closing, the Purchase Agreement). Pursuant to the Purchase Agreement, KKR acquired for a purchase price of $3.37 billion, which remains subject to post-closing adjustments, newly designated Class A Units representing 20% of the equity interests of Sempra Infrastructure Partners. Prior to closing the transaction, we completed an internal legal reorganization to consolidate the assets of Sempra LNG and our ownership of IEnova under Sempra Global, which was renamed Sempra Infrastructure Partners. On October 1, 2021, Sempra Infrastructure Partners paid $149 million to KKR for reimbursement of certain expenses that KKR incurred in connection with closing the transaction. As of September 30, 2021, the composition of our reportable segments did not change.
At the closing of the transactions contemplated under the Purchase Agreement on October 1, 2021, we owned 99.9% of the outstanding ordinary shares of IEnova. Under the terms of the Purchase Agreement, the base purchase price was adjusted downward at closing by $1 million based on the number of IEnova ordinary shares we did not own at the closing. If we later acquire additional shares of IEnova after the closing, such additional shares will be acquired by Sempra Infrastructure Partners and KKR will provide 20% of the funding.
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We estimate that Sempra Infrastructure Partners had approximately $8.37 billion of direct and indirect net debt at the closing, and there will be a customary upward or downward adjustment to the purchase price to the extent the actual net debt at closing was greater or less than such estimated amount. Direct and indirect net debt at Sempra Infrastructure Partners includes consolidated long-term and short-term debt less cash at Sempra LNG and IEnova plus their proportionate ownership share of equity method investees’ long-term and short-term debt less cash.
Pursuant to the Purchase Agreement, we have agreed to indemnify Sempra Infrastructure Partners for, among other things, certain losses arising from liabilities of Sempra Infrastructure Partners and its subsidiaries to the extent not primarily relating to the undertaking of the business of Sempra Infrastructure Partners, and we have agreed to indemnify KKR for losses attributable to pre-closing taxes.
We have also entered into an accommodation and support agreement under which KKR has the ability to borrow from Sempra up to $300 million plus reimbursement of certain fees related to such borrowing, which we fully funded on November 1, 2021. This loan is due to be repaid in full no later than October 1, 2029 and bears compound interest at 5% per annum.
Limited Partnership Agreement. At the closing of the sale of NCI in Sempra Infrastructure Partners, Sempra and KKR entered into a limited partnership agreement (the LP Agreement), which governs our and their respective rights and obligations in respect of our ownership of Sempra Infrastructure Partners. We maintain control of Sempra Infrastructure Partners as the 80% owner with KKR having certain minority protections commensurate with the size of its investment.
Sempra Infrastructure Partners has 2 authorized classes of units, designated as “Class A Units” (which are common voting units) and “Sole Risk Interests.” If KKR approves our request that a project not be pursued jointly, or if KKR decides not to participate in any proposed project for which we nevertheless desire to make a positive final investment decision, we will be permitted to proceed with such project either independently through a different investment vehicle or as a “Sole Risk Project” within Sempra Infrastructure Partners and receive Sole Risk Interests in respect thereof. Sole Risk Projects are separated from other Sempra Infrastructure Partners projects and are conducted at our sole cost, expense and liability and we receive, through the acquisition of Sole Risk Interests, any economic and other benefits from such projects. KKR is not entitled to any benefits or rights in respect of any Sole Risk Project. The Guaymas-El Oro segment of the Sonora pipeline at IEnova currently constitutes a Sole Risk Project. Until a specified date, KKR has certain discretionary rights to cause the Guaymas-El Oro segment of the Sonora pipeline to cease to be a Sole Risk Project and be pursued jointly within Sempra Infrastructure Partners.
Under the LP Agreement, Sempra Infrastructure Partners is managed by a board of managers comprised of members designated by us and by KKR. Matters are generally decided by majority vote. The managers designated by us and the managers designated by KKR each, as a group, have voting power equivalent to the ownership percentage of their respective designating member. However, Sempra Infrastructure Partners and its controlled subsidiaries are prohibited from taking certain actions without the prior written approval of KKR (subject to KKR maintaining certain ownership thresholds in Sempra Infrastructure Partners).
The LP Agreement contains certain default remedies if we or KKR fails to fund any amounts required to be funded under the LP Agreement.
The LP Agreement also requires that Sempra Infrastructure Partners distribute to us and to KKR at least 85% of distributable cash flow of Sempra Infrastructure Partners and its subsidiaries on a quarterly basis, subject to certain exceptions and reserves. Generally, distributions from Sempra Infrastructure Partners are made to us and KKR on a pro rata basis in accordance with our and their respective ownership interests in Sempra Infrastructure Partners. However, KKR is entitled to certain priority distributions in the event of material deviations between certain specified projected cash flows and actual cash flows. Additionally, KKR is entitled to certain priority distributions in the event a specified project that reaches a positive final investment decision does not have projected internal rates of return over a specified threshold or in the event we have not made a positive final investment decision by a certain date on specified LNG projects that are currently in development.
In addition, under the LP Agreement, both parties are granted customary registration rights in the event of an initial public offering of Sempra Infrastructure Partners, which is subject to certain consent rights of KKR.
Management Agreement. At the closing of the transactions contemplated under the Purchase Agreement, Sempra Infrastructure Partners entered into a management agreement with Sempra to engage Sempra for certain staffing and general and administrative services. The management agreement governs the services that Sempra will provide to Sempra Infrastructure Partners and the charges associated with those services.
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Discontinued Operations
As we discuss in Note 5, we completed the sales of our equity interests in our Peruvian and Chilean businesses in the second quarter of 2020. The minority interests in Luz del Sur and Tecsur were deconsolidated upon the sale of our Peruvian businesses in April 2020, and the minority interests in Chilquinta Energía and its subsidiaries were deconsolidated upon the sale of our Chilean businesses in June 2020.

TRANSACTIONS WITH AFFILIATES
We summarize amounts due from and to unconsolidated affiliates at Sempra, SDG&E and SoCalGas in the following table.
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AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATESAMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATESAMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,
2021		December 31,
2020		 September 30,
2022		December 31,
2021
Sempra:Sempra:  Sempra:  
Total due from various unconsolidated affiliates – current$30 $20 
Tax sharing arrangement with Oncor HoldingsTax sharing arrangement with Oncor Holdings$41 $18 
Various affiliatesVarious affiliates11 5 
Total due from unconsolidated affiliates – currentTotal due from unconsolidated affiliates – current$52 $23 
Sempra Mexico(1):
ESJ – Note due December 31, 2022, net of negligible allowance for credit losses at December 31, 2020(2)
$— $85 
IMG JV – Note due March 15, 2022, net of allowance for credit losses of $1 and $3 at
September 30, 2021 and December 31, 2020, respectively(3)
684 695 
Sempra Infrastructure – IMG – Note due March 15, 2022, net of allowance for credit losses
of $1 at December 31, 2021(1)
Sempra Infrastructure – IMG – Note due March 15, 2022, net of allowance for credit losses
of $1 at December 31, 2021(1)
$— $637 
Total due from unconsolidated affiliates – noncurrentTotal due from unconsolidated affiliates – noncurrent$684 $780 Total due from unconsolidated affiliates – noncurrent$— $637 
Sempra Mexico – TAG Pipelines Norte, S. de. R.L. de C.V. – Note due December 20, 2021(1)(4)
$(42)$(41)
Various affiliates— (4)
Total due to unconsolidated affiliates – current$(42)$(45)
Sempra Mexico(1)(5):
TAG Pipelines Norte, S. de. R.L. de C.V.:
Sempra Infrastructure(2):
Sempra Infrastructure(2):
TAG Pipelines Norte, S. de R.L. de C.V.:TAG Pipelines Norte, S. de R.L. de C.V.:
5.5% Note due January 9, 20245.5% Note due January 9, 2024$(71)$(68)5.5% Note due January 9, 2024$(39)$(69)
5.5% Note due January 14, 20255.5% Note due January 14, 2025(21)— 5.5% Note due January 14, 2025(22)(21)
5.5% Note due July 16, 20255.5% Note due July 16, 2025(20)— 5.5% Note due July 16, 2025(21)(20)
TAG JV – 5.74% Note due December 17, 2029(174)(166)
5.5% Note due January 14, 20265.5% Note due January 14, 2026(18)— 
5.5% Note due July 14, 20265.5% Note due July 14, 2026(11)— 
TAG – 5.74% Note due December 17, 2029TAG – 5.74% Note due December 17, 2029(185)(177)
Total due to unconsolidated affiliates – noncurrentTotal due to unconsolidated affiliates – noncurrent$(286)$(234)Total due to unconsolidated affiliates – noncurrent$(296)$(287)
SDG&E:SDG&E:  SDG&E:  
Total due from various unconsolidated affiliates – current$1 $— 
SempraSempra$(45)$(38)Sempra$(64)$(40)
SoCalGasSoCalGas(9)(21)SoCalGas(24)(48)
Various affiliatesVarious affiliates(7)(5)Various affiliates(5)(9)
Total due to unconsolidated affiliates – currentTotal due to unconsolidated affiliates – current$(61)$(64)Total due to unconsolidated affiliates – current$(93)$(97)
Income taxes due from Sempra(6)
$29 $— 
Income taxes due from Sempra(3)
Income taxes due from Sempra(3)
$37 $19 
SoCalGas:SoCalGas:  SoCalGas:  
SDG&ESDG&E$9 $21 SDG&E$24 $48 
Various affiliatesVarious affiliates2 1 Various affiliates— 1 
Total due from unconsolidated affiliates – currentTotal due from unconsolidated affiliates – current$11 $22 Total due from unconsolidated affiliates – current$24 $49 
SempraSempra$(45)$(31)Sempra$(42)$(36)
Total due to unconsolidated affiliates – currentTotal due to unconsolidated affiliates – current$(45)$(31)Total due to unconsolidated affiliates – current$(42)$(36)
Income taxes due from (to) Sempra(6)
$1 $(37)
Income taxes due from Sempra(3)
Income taxes due from Sempra(3)
$9 $6 
(1)    Amounts include principal balances plus accumulated interest outstanding.
(2)    U.S. dollar-denominated loan at a variable interest rate based on 1-month LIBOR plus 196 bps (2.11% at December 31, 2020). At December 31, 2020, $1 million of accrued interest receivable is included in Due from Unconsolidated Affiliates – Current. In March 2021, IEnova acquired the 50% equity interest in ESJ that it did not already own and ESJ becamerepresents a wholly owned, consolidated subsidiary, resulting in the elimination of this note receivable.
(3)    Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $689 million$691 U.S. dollar-equivalent at September 30, 2021, at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps (7.02%(8.06% at September 30, 2021), to finance construction of a natural gas marine pipeline. At both September 30, 2021 and December 31, 2020,2021). At December 31, 2021, $2 million of accrued interest receivable is included in Due from Unconsolidated Affiliates – Current. At September 30, 2021, we classified thisIn March 2022, Sempra Infrastructure amended and restated the revolving line of credit as noncurrent because we expect to extend the maturity date on a long-term basis prior to its stated maturity date.
(4)    U.S. dollar-denominated loannote in the amount of $625 at a variable interest rate based on 6-month LIBORthe adjusted 1-month Secured Overnight Financing Rate plus 290180 bps (3.06% at September 30, 2021).and extended the maturity date to March 15, 2023. In July 2022, this note receivable was paid in full.
(5)(2)     U.S. dollar-denominated loans at fixed interest rates. Amounts include principal balances plus accumulated interest outstanding.
(6)(3)    SDG&E and SoCalGas are included in the consolidated income tax return of Sempra, and their respective income tax expense is computed as an amount equal to that which would result from each company having always filed a separate return. Amounts include current and noncurrent income taxes due to/from Sempra.
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The following table summarizes income statement information from unconsolidated affiliates.
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INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATESINCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES  INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)(Dollars in millions)  (Dollars in millions)
Three months ended September 30,Nine months ended
September 30,		 Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
Sempra:Sempra:    Sempra:    
RevenuesRevenues$7 $9 $22 $31 Revenues$10 $7 $32 $22 
Cost of salesCost of sales— 9 11 35 Cost of sales— — — 11 
Interest incomeInterest income11 12 38 44 Interest income2 11 16 38 
Interest expenseInterest expense4 4 11 11 Interest expense4 4 12 11 
SDG&E:SDG&E:    SDG&E:    
RevenuesRevenues$3 $1 $7 $4 Revenues$4 $3 $12 $7 
Cost of salesCost of sales20 17 75 56 Cost of sales17 20 67 75 
SoCalGas:SoCalGas:SoCalGas:
RevenuesRevenues$24 $23 $72 $61 Revenues$24 $24 $73 $72 
Cost of sales(1)
Cost of sales(1)
(2)2 1 2 
Cost of sales(1)
(1)(2)(5)1 
(1)    Includes net commodity costs from natural gas transactions with unconsolidated affiliates.
Guarantees
Sempra provided guarantees related to Cameron LNG JV’s construction-period debt, which were terminated in March 2021, as well as guarantees related to Cameron LNG JV’s SDSRA and CFIN’s Support Agreement, which remain outstanding. We discuss these guarantees in Note 6 below and in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.

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OTHER (EXPENSE) INCOME, NET
Other (expense) income, net, consists of the following:
OTHER (EXPENSE) INCOME, NETOTHER (EXPENSE) INCOME, NET   OTHER (EXPENSE) INCOME, NET   
(Dollars in millions)(Dollars in millions)   (Dollars in millions)   
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
Sempra:Sempra:    Sempra:    
Allowance for equity funds used during constructionAllowance for equity funds used during construction$31 $34 $103 $96 Allowance for equity funds used during construction$35 $31 $104 $103 
Investment gains, net(1)
— 16 28 9 
Investment (losses) gains, net(1)
Investment (losses) gains, net(1)
(13)— (60)28 
(Losses) gains on interest rate and foreign exchange instruments, net(Losses) gains on interest rate and foreign exchange instruments, net(3)19 (26)(129)(Losses) gains on interest rate and foreign exchange instruments, net(3)(3)2 (26)
Foreign currency transaction (losses) gains, net(2)
(17)15 (10)(95)
Non-service component of net periodic benefit cost(66)(48)(52)(45)
Fine related to Energy Efficiency Program inquiry— (6)— (6)
Foreign currency transaction gains (losses), net(2)
Foreign currency transaction gains (losses), net(2)
4 (17)(18)(10)
Non-service components of net periodic benefit costNon-service components of net periodic benefit cost(77)(66)(45)(52)
Interest on regulatory balancing accounts, netInterest on regulatory balancing accounts, net2 — 5 13 Interest on regulatory balancing accounts, net7 2 12 5 
Sundry, netSundry, net(2)(1)4 (6)Sundry, net7 (2)2 4 
TotalTotal$(55)$29 $52 $(163)Total$(40)$(55)$(3)$52 
SDG&E:SDG&E:    SDG&E:    
Allowance for equity funds used during constructionAllowance for equity funds used during construction$18 $21 $63 $61 Allowance for equity funds used during construction$22 $18 $64 $63 
Non-service component of net periodic benefit cost(15)(18)(10)(15)
Fine related to Energy Efficiency Program inquiry— (6)— (6)
Non-service components of net periodic benefit costNon-service components of net periodic benefit cost(17)(15)(8)(10)
Interest on regulatory balancing accounts, netInterest on regulatory balancing accounts, net2 — 5 8 Interest on regulatory balancing accounts, net5 2 9 5 
Sundry, netSundry, net(1)1 3 (1)Sundry, net2 (1)3 3 
TotalTotal$4 $(2)$61 $47 Total$12 $4 $68 $61 
SoCalGas:SoCalGas:   SoCalGas:   
Allowance for equity funds used during constructionAllowance for equity funds used during construction$13 $11 $36 $29 Allowance for equity funds used during construction$14 $13 $40 $36 
Non-service component of net periodic benefit cost(49)(15)(30)(3)
Non-service components of net periodic benefit costNon-service components of net periodic benefit cost(58)(49)(32)(30)
Interest on regulatory balancing accounts, netInterest on regulatory balancing accounts, net— — — 5 Interest on regulatory balancing accounts, net2 — 3 — 
Sundry, netSundry, net(3)(3)(8)(10)Sundry, net(1)(3)(16)(8)
TotalTotal$(39)$(7)$(2)$21 Total$(43)$(39)$(5)$(2)
(1)    Represents net investment (losses) gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are offset by corresponding changes in compensation expense related to the plans, recorded in O&M on the Condensed Consolidated Statements of Operations.
(2)    Includes losses of $11 in the nine months ended September 30, 2022 and losses of $18 million and $13 million in the three months and nine months ended September 30, 2021, respectively, and gains of $15 million and losses of $120 million in the three months and nine months ended September 30, 2020, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to IMG, JV, which are offset by corresponding amounts included in Equity Earnings on the Condensed Consolidated Statements of Operations.

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INCOME TAXES
We provide our calculations of ETRs in the following table.
INCOME TAX (BENEFIT) EXPENSE AND EFFECTIVE INCOME TAX RATES
INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATESINCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30,Three months ended September 30,Nine months ended September 30,
20212020202120202022202120222021
Sempra:Sempra:Sempra:
Income tax (benefit) expense from continuing operations$(342)$99 $(45)$60 
Income tax expense (benefit)Income tax expense (benefit)$21 $(342)$435 $(45)
(Loss) income from continuing operations before income taxes
and equity earnings
$(1,365)$201 $(316)$1,061 
Income (loss) before income taxes and equity earningsIncome (loss) before income taxes and equity earnings$165 $(1,365)$1,194 $(316)
Equity earnings, before income tax(1)
Equity earnings, before income tax(1)
137 117 457 158 
Equity earnings, before income tax(1)
134 137 436 457 
Pretax (loss) income$(1,228)$318 $141 $1,219 
Pretax income (loss)Pretax income (loss)$299 $(1,228)$1,630 $141 
Effective income tax rateEffective income tax rate28 %31 %(32)%5 %Effective income tax rate7 %28 %27 %(32)%
SDG&E:SDG&E:SDG&E:
Income tax expenseIncome tax expense$90 $33 $168 $161 Income tax expense$35 $90 $141 $168 
Income before income taxesIncome before income taxes$295 $211 $771 $794 Income before income taxes$306 $295 $822 $771 
Effective income tax rateEffective income tax rate31 %16 %22 %20 %Effective income tax rate11 %31 %17 %22 %
SoCalGas:SoCalGas:SoCalGas:
Income tax (benefit) expenseIncome tax (benefit) expense$(437)$(6)$(335)$95 Income tax (benefit) expense$(28)$(437)$75 $(335)
(Loss) income before income taxes(Loss) income before income taxes$(1,563)$(30)$(959)$521 (Loss) income before income taxes$(110)$(1,563)$415 $(959)
Effective income tax rateEffective income tax rate28 %20 %35 %18 %Effective income tax rate25 %28 %18 %35 %
(1)    We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.

Sempra, SDG&E and SoCalGas record income taxes for interim periods utilizing a forecasted ETR anticipated for the full year. Unusual and infrequent items and items that cannot be reliably estimated are recorded in the interim period in which they occur, which can result in variability in the ETR.
For SDG&E and SoCalGas, the CPUC requires flow-through rate-making treatment for the current income tax benefit or expense arising from certain property-related and other temporary differences between the treatment for financial reporting and income tax, which will reverse over time. Under the regulatory accounting treatment required for these flow-through temporary differences, deferred income tax assets and liabilities are not recorded to deferred income tax expense or benefit, but rather to a regulatory asset or liability, which impacts the ETR. As a result, changes in the relative size of these items compared to pretax income, from period to period, can cause variations in the ETR. The following items are subject to flow-through treatment:
▪repairs expenditures related to a certain portion of utility plant fixed assets
▪the equity portion of AFUDC, which is non-taxable
▪a portion of the cost of removal of utility plant assets
▪utility self-developed software expenditures
▪depreciation on a certain portion of utility plant assets
▪state income taxes
The AFUDC related to equity recorded for regulated construction projects at Sempra MexicoInfrastructure has similar flow-through treatment.
We record income tax (expense) benefit from the transactional effects of foreign currency and inflation. Through the first quarter of 2021, such effects were offset by net gains (losses) from foreign currency derivatives that were hedging Sempra Mexico parent’s exposure to movements in the Mexican peso from its controlling interest in IEnova.
Discontinued Operations
In January 2019, our board of directors approved a plan to sell our South American businesses. We completed the sales in the second quarter of 2020, as we discuss in Note 5. Because of our decision to sell our South American businesses, we no longer asserted indefinite reinvestment of basis differences related to these businesses. Accordingly, in the nine months ended September 30, 2020,2022, we recorded a $7 millionrecognized income tax benefit from changes inexpense of $120 million for a deferred income tax liability related to outside basis differences in our discontinued operations in South America.foreign subsidiaries that we had previously considered to be indefinitely reinvested.
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NOTE 2. NEW ACCOUNTING STANDARDS
We describe below recent accounting pronouncements that have had or may have a significant effect on our financial condition, results of operations, financial condition, cash flows or disclosures.
ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”: ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. In addition to other changes, this standard amends ASC 470-20, “Debt with Conversion and Other Options,” by removing the accounting models for instruments with beneficial conversion and cash conversion features. The standard also amends certain guidance in ASC 260, “Earnings Per Share,” as follows:
▪requires an entity to applyfor the if-converted method when calculating dilutedcomputation of EPS for convertible instruments and no longer use the treasury stock method, which was previously allowed for certain convertible instruments;
▪requirescontracts on an entity to include the effect of potential share settlement in the diluted EPS calculation when an instrument may be settled in cash or shares, and no longer allows an entity to rebut the presumption of share settlement if it has a history or policy of cash settlement;
▪requires an entity to include equity-classified convertible preferred stock that contains down-round features whereby, if the down-round feature is triggered, its effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS;
▪clarifies that the average market price should be used to calculate the diluted EPS denominator when the exercise price or the number of shares that may be issued is variable, except for certain contingently issuable shares; and
▪clarifies that the weighted-average share count from each quarter should be used when calculating the year-to-date weighted-average share count.
entity’s own equity. For public entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods therein, with early adoption permitted for fiscal years beginning after December 15, 2020.permitted. An entity can use either a full or modified retrospective approach to adopt ASU 2020-06 and must disclose, in the period of adoption, EPS transition information about the effect of the change on affected per-share amounts. We plan to adoptadopted the standard on January 1, 2022 using a modified retrospective approach and are currently evaluating the effectadoption did not materially impact our financial statements or per-share amounts.

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Table of the standard on our ongoing financial reporting.Contents
NOTE 3. REVENUES
We discuss revenue recognition for revenues from contracts with customers and from sources other than contracts with customers in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.
The following table disaggregates our revenues from contracts with customers by major service line and market and provides a reconciliation to total revenues by segment. The majority of our revenue is recognized over time.
DISAGGREGATED REVENUES
(Dollars in millions)
SDG&ESoCalGasSempra InfrastructureConsolidating adjustments and Parent
and other		Sempra
Three months ended September 30, 2022
By major service line:
Utilities$1,383 $1,214 $19 $(29)$2,587 
Energy-related businesses— — 532 (13)519 
Revenues from contracts with customers$1,383 $1,214 $551 $(42)$3,106 
By market:
Gas$175 $1,214 $379 $(30)$1,738 
Electric1,208 — 172 (12)1,368 
Revenues from contracts with customers$1,383 $1,214 $551 $(42)$3,106 
Revenues from contracts with customers$1,383 $1,214 $551 $(42)$3,106 
Utilities regulatory revenues186 171 — — 357 
Other revenues— — 146 8 154 
Total revenues$1,569 $1,385 $697 $(34)$3,617 
 Nine months ended September 30, 2022
By major service line:
Utilities$4,134 $4,473 $67 $(85)$8,589 
Energy-related businesses— — 1,281 (42)1,239 
Revenues from contracts with customers$4,134 $4,473 $1,348 $(127)$9,828 
By market:
Gas$664 $4,473 $948 $(75)$6,010 
Electric3,470 — 400 (52)3,818 
Revenues from contracts with customers$4,134 $4,473 $1,348 $(127)$9,828 
Revenues from contracts with customers$4,134 $4,473 $1,348 $(127)$9,828 
Utilities regulatory revenues279 406 — — 685 
Other revenues— — 462 9 471 
Total revenues$4,413 $4,879 $1,810 $(118)$10,984 
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DISAGGREGATED REVENUES
(Dollars in millions)
SDG&ESoCalGasSempra MexicoSempra LNGConsolidating adjustments and Parent and OtherSempra
Three months ended September 30, 2021
By major service line:
Utilities$1,369 $966 $17 $— $(27)$2,325 
Energy-related businesses— — 324 144 (145)323 
Revenues from contracts with customers$1,369 $966 $341 $144 $(172)$2,648 
By market:
Gas$145 $966 $231 $143 $(165)$1,320 
Electric1,224 — 110 1 (7)1,328 
Revenues from contracts with customers$1,369 $966 $341 $144 $(172)$2,648 
Revenues from contracts with customers$1,369 $966 $341 $144 $(172)$2,648 
Utilities regulatory revenues95 140 — — — 235 
Other revenues— — 256 (25)(101)130 
Total revenues$1,464 $1,106 $597 $119 $(273)$3,013 
 Nine months ended September 30, 2021
By major service line:
Utilities$3,755 $3,685 $61 $— $(79)$7,422 
Energy-related businesses— — 859 260 (282)837 
Revenues from contracts with customers$3,755 $3,685 $920 $260 $(361)$8,259 
By market:
Gas$580 $3,685 $635 $257 $(334)$4,823 
Electric3,175 — 285 3 (27)3,436 
Revenues from contracts with customers$3,755 $3,685 $920 $260 $(361)$8,259 
Revenues from contracts with customers$3,755 $3,685 $920 $260 $(361)$8,259 
Utilities regulatory revenues364 53 — — — 417 
Other revenues— — 448 107 (218)337 
Total revenues$4,119 $3,738 $1,368 $367 $(579)$9,013 
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DISAGGREGATED REVENUES (CONTINUED)DISAGGREGATED REVENUES (CONTINUED)DISAGGREGATED REVENUES (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
SDG&ESoCalGasSempra MexicoSempra LNGConsolidating adjustments and Parent and otherSempraSDG&ESoCalGasSempra InfrastructureConsolidating adjustments and Parent
and other		Sempra
Three months ended September 30, 2020Three months ended September 30, 2021
By major service line:By major service line:By major service line:
UtilitiesUtilities$1,301 $813 $12 $— $(25)$2,101 Utilities$1,369 $966 $17 $(27)$2,325 
Energy-related businessesEnergy-related businesses— — 244 35 (32)247 Energy-related businesses— — 327 (4)323 
Revenues from contracts with customersRevenues from contracts with customers$1,301 $813 $256 $35 $(57)$2,348 Revenues from contracts with customers$1,369 $966 $344 $(31)$2,648 
By market:By market:By market:
GasGas$126 $813 $159 $33 $(54)$1,077 Gas$145 $966 $235 $(26)$1,320 
ElectricElectric1,175 — 97 2 (3)1,271 Electric1,224 — 109 (5)1,328 
Revenues from contracts with customersRevenues from contracts with customers$1,301 $813 $256 $35 $(57)$2,348 Revenues from contracts with customers$1,369 $966 $344 $(31)$2,648 
Revenues from contracts with customersRevenues from contracts with customers$1,301 $813 $256 $35 $(57)$2,348 Revenues from contracts with customers$1,369 $966 $344 $(31)$2,648 
Utilities regulatory revenuesUtilities regulatory revenues171 29 — — — 200 Utilities regulatory revenues95 140 — — 235 
Other revenuesOther revenues— — 95 28 (27)96 Other revenues— — 135 (5)130 
Total revenuesTotal revenues$1,472 $842 $351 $63 $(84)$2,644 Total revenues$1,464 $1,106 $479 $(36)$3,013 
Nine months ended September 30, 2020 Nine months ended September 30, 2021
By major service line:By major service line:By major service line:
UtilitiesUtilities$3,610 $3,261 $42 $— $(66)$6,847 Utilities$3,755 $3,685 $61 $(79)$7,422 
Energy-related businessesEnergy-related businesses— — 616 56 (40)632 Energy-related businesses— — 856 (19)837 
Revenues from contracts with customersRevenues from contracts with customers$3,610 $3,261 $658 $56 $(106)$7,479 Revenues from contracts with customers$3,755 $3,685 $917 $(98)$8,259 
By market:By market:By market:
GasGas$518 $3,261 $439 $51 $(98)$4,171 Gas$580 $3,685 $632 $(74)$4,823 
ElectricElectric3,092 — 219 5 (8)3,308 Electric3,175 — 285 (24)3,436 
Revenues from contracts with customersRevenues from contracts with customers$3,610 $3,261 $658 $56 $(106)$7,479 Revenues from contracts with customers$3,755 $3,685 $917 $(98)$8,259 
Revenues from contracts with customersRevenues from contracts with customers$3,610 $3,261 $658 $56 $(106)$7,479 Revenues from contracts with customers$3,755 $3,685 $917 $(98)$8,259 
Utilities regulatory revenuesUtilities regulatory revenues366 (14)— — — 352 Utilities regulatory revenues364 53 — — 417 
Other revenuesOther revenues— — 277 199 (108)368 Other revenues— — 352 (15)337 
Total revenuesTotal revenues$3,976 $3,247 $935 $255 $(214)$8,199 Total revenues$4,119 $3,738 $1,269 $(113)$9,013 
REVENUES FROM CONTRACTS WITH CUSTOMERS
Utilities Revenues
In connection with the COVID-19 pandemic, the California Utilities implemented certain measures to assist customers, including suspending service disconnections due to nonpayment for all customers (except for SoCalGas’ noncore customers), waiving late payment fees, and offering flexible payment plans. Such measures ended on June 30, 2021, except for the suspension of service disconnections that ended on September 30, 2021. At the CPUC’s direction, the California Utilities have started to automatically enroll residential and small business customers with past-due balances in long-term repayment plans. The CPUC is continuing to consider the impacts of any state or federal relief programs on customer arrearages and if further debt relief is warranted.
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Remaining Performance Obligations
For contracts greater than one year, at September 30, 2021,2022, we expect to recognize revenue related to the fixed fee component of the consideration as shown below. Sempra’s remaining performance obligations primarily relate to capacity agreements for natural gas storage and transportation at Sempra Infrastructure and transmission line projects at SDG&E. SoCalGas did not have any suchremaining performance obligations at September 30, 2021.2022.
REMAINING PERFORMANCE OBLIGATIONS(1)
REMAINING PERFORMANCE OBLIGATIONS(1)
REMAINING PERFORMANCE OBLIGATIONS(1)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
SempraSDG&ESempraSDG&E
2021 (excluding first nine months of 2021)$88 $1 
2022368 4 
2022 (excluding first nine months of 2022)2022 (excluding first nine months of 2022)$100 $1 
20232023367 4 2023384 4 
20242024367 4 2024385 4 
20252025364 4 2025384 4 
20262026382 4 
ThereafterThereafter4,129 67 Thereafter4,525 63 
Total revenues to be recognizedTotal revenues to be recognized$5,683 $84 Total revenues to be recognized$6,160 $80 
(1)    Excludes intercompany transactions.
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Contract Liabilities from Revenues from Contracts with Customers
Activities within Sempra’s and SDG&E’s contract liabilities are presented below. There were no contract liabilities at SoCalGas in the nine months ended September 30, 20212022 or 2020.2021. As we discuss in Note 11, Sempra Infrastructure drew against and fully exhausted Gazprom’s letters of credit in April 2022 due to Gazprom’s non-renewal of such letters of credit as required under its LNG storage and regasification agreement. Sempra Infrastructure recorded a contract liability for the funds drawn from the letters of credit as payments received in advance. Gazprom did not pay its invoices from March 2022 through July 2022, so funds drawn from the letters of credit were used to fully offset such nonpayment, which have been reflected as revenue from performance obligations satisfied during the reporting period.
CONTRACT LIABILITIESCONTRACT LIABILITIESCONTRACT LIABILITIES
(Dollars in millions)(Dollars in millions)(Dollars in millions)
2021202020222021
Sempra:Sempra:Sempra:
Contract liabilities at January 1Contract liabilities at January 1$(207)$(163)Contract liabilities at January 1$(278)$(207)
Revenue from performance obligations satisfied during reporting periodRevenue from performance obligations satisfied during reporting period36 3 Revenue from performance obligations satisfied during reporting period129 36 
Payments received in advancePayments received in advance(1)— Payments received in advance(105)(1)
Contract liabilities at September 30(1)
Contract liabilities at September 30(1)
$(172)$(160)
Contract liabilities at September 30(1)
$(254)$(172)
SDG&E:SDG&E:SDG&E:
Contract liabilities at January 1Contract liabilities at January 1$(87)$(91)Contract liabilities at January 1$(83)$(87)
Revenue from performance obligations satisfied during reporting periodRevenue from performance obligations satisfied during reporting period3 3 Revenue from performance obligations satisfied during reporting period3 3 
Contract liabilities at September 30(1)
Contract liabilities at September 30(1)
$(84)$(88)
Contract liabilities at September 30(1)
$(80)$(84)
(1)     AtBalances at September 30, 2021, includes $8 million2022 include $46 and $4 million in Other Current Liabilities and $164 million$208 and $80 million$76 in Deferred Credits and Other on Sempra’s and SDG&E’s Condensed Consolidated Balance Sheets, respectively.
Receivables from Revenues from Contracts with Customers
The table below shows receivable balances associated with revenues from contracts with customers on the Condensed Consolidated Balance Sheets.
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RECEIVABLES FROM REVENUES FROM CONTRACTS WITH CUSTOMERSRECEIVABLES FROM REVENUES FROM CONTRACTS WITH CUSTOMERSRECEIVABLES FROM REVENUES FROM CONTRACTS WITH CUSTOMERS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30, 2021December 31, 2020September 30, 2022December 31, 2021
Sempra:Sempra:Sempra:
Accounts receivable – trade, net$1,216 $1,447 
Accounts receivable – trade, net(1)
Accounts receivable – trade, net(1)
$1,645 $1,886 
Accounts receivable – other, netAccounts receivable – other, net17 12 Accounts receivable – other, net28 19 
Due from unconsolidated affiliates – current(1)
2 3 
Other long-term assets115 — 
Due from unconsolidated affiliates – current(2)
Due from unconsolidated affiliates – current(2)
8 2 
Other long-term assets(3)
Other long-term assets(3)
25 70 
TotalTotal$1,350 $1,462 Total$1,706 $1,977 
SDG&E:SDG&E:SDG&E:
Accounts receivable – trade, net$642 $573 
Accounts receivable – trade, net(1)
Accounts receivable – trade, net(1)
$792 $715 
Accounts receivable – other, netAccounts receivable – other, net11 8 Accounts receivable – other, net11 9 
Due from unconsolidated affiliates – current(1)
3 2 
Other long-term assets47 — 
Due from unconsolidated affiliates – current(2)
Due from unconsolidated affiliates – current(2)
3 2 
Other long-term assets(3)
Other long-term assets(3)
13 25 
TotalTotal$703 $583 Total$819 $751 
SoCalGas:SoCalGas:SoCalGas:
Accounts receivable – trade, netAccounts receivable – trade, net$462 $786 Accounts receivable – trade, net$710 $1,084 
Accounts receivable – other, netAccounts receivable – other, net6 4 Accounts receivable – other, net17 10 
Other long-term assets68 — 
Other long-term assets(3)
Other long-term assets(3)
12 45 
TotalTotal$536 $790 Total$739 $1,139 
(1)At September 30, 2022 and December 31, 2021, includes $104 and $24, respectively, of receivables due from customers that were billed on behalf of CCAs, which are not included in revenues.
(2)     Amount is presented net of amounts due to unconsolidated affiliates on the Condensed Consolidated Balance Sheets, when right of offset exists.

(3)In connection with the COVID-19 pandemic and at the direction of the CPUC, SDG&E and SoCalGas enrolled residential and small business customers with past-due balances in long-term repayment plans.
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NOTE 4. REGULATORY MATTERS
We discuss regulatory matters in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report and provide updates to those discussions and information about new regulatory matters below. With the exception of regulatory balancing accounts, we generally do not earn a return on our regulatory assets until such time as a related cash expenditure has been made. 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 currentlygenerally approximates the three-month commercial paper rate. The periods during which we recognize a regulatory asset while we do not earn a return vary by regulatory asset.
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REGULATORY ASSETS AND LIABILITIES
We show the details of regulatory assets and liabilities in the following table.
REGULATORY ASSETS (LIABILITIES)REGULATORY ASSETS (LIABILITIES)REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30,
2021		December 31,
2020		September 30,
2022		December 31,
2021
SDG&E:SDG&E:  SDG&E:  
Fixed-price contracts and other derivativesFixed-price contracts and other derivatives$(88)$(53)Fixed-price contracts and other derivatives$(33)$(50)
Deferred income taxes recoverable in ratesDeferred income taxes recoverable in rates72 22 Deferred income taxes recoverable in rates217 125 
Pension and other postretirement benefit plan obligationsPension and other postretirement benefit plan obligations19 50 Pension and other postretirement benefit plan obligations(32)(7)
Removal obligationsRemoval obligations(2,228)(2,121)Removal obligations(2,175)(2,251)
Environmental costsEnvironmental costs55 56 Environmental costs61 62 
Sunrise Powerlink fire mitigationSunrise Powerlink fire mitigation121 121 Sunrise Powerlink fire mitigation122 122 
Regulatory balancing accounts(1)(2)
Regulatory balancing accounts(1)(2)
Regulatory balancing accounts(1)(2)
Commodity – electricCommodity – electric85 72 Commodity – electric185 77 
Gas transportationGas transportation23 35 Gas transportation45 49 
Safety and reliabilitySafety and reliability60 67 Safety and reliability93 67 
Public purpose programsPublic purpose programs(138)(158)Public purpose programs(96)(107)
2019 GRC retroactive impacts14 56 
Wildfire mitigation planWildfire mitigation plan316 178 
Liability insurance premiumLiability insurance premium100 110 
Other balancing accountsOther balancing accounts535 233 Other balancing accounts144 207 
Other regulatory assets, net(2)
Other regulatory assets, net(2)
110 72 
Other regulatory assets, net(2)
140 119 
Total SDG&ETotal SDG&E(1,360)(1,548)Total SDG&E(913)(1,299)
SoCalGas:SoCalGas:  SoCalGas:  
Deferred income taxes recoverable (refundable) in rates9 (82)
Deferred income taxes recoverable in ratesDeferred income taxes recoverable in rates122 44 
Pension and other postretirement benefit plan obligationsPension and other postretirement benefit plan obligations342 417 Pension and other postretirement benefit plan obligations(36)51 
Employee benefit costsEmployee benefit costs37 37 Employee benefit costs31 31 
Removal obligationsRemoval obligations(649)(685)Removal obligations(606)(627)
Environmental costsEnvironmental costs35 36 Environmental costs33 34 
Regulatory balancing accounts(1)(2)
Regulatory balancing accounts(1)(2)
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportationCommodity – gas, including transportation(138)(56)Commodity – gas, including transportation(24)(146)
Safety and reliabilitySafety and reliability299 335 Safety and reliability491 339 
Public purpose programsPublic purpose programs(274)(253)Public purpose programs(197)(183)
2019 GRC retroactive impacts51 202 
Liability insurance premiumLiability insurance premium21 16 
Other balancing accountsOther balancing accounts85 (58)Other balancing accounts135 42 
Other regulatory assets, net(2)
Other regulatory assets, net(2)
160 75 
Other regulatory assets, net(2)
167 142 
Total SoCalGasTotal SoCalGas(43)(32)Total SoCalGas137 (257)
Sempra Mexico:
Sempra Infrastructure:Sempra Infrastructure:
Deferred income taxes recoverable in ratesDeferred income taxes recoverable in rates80 80 Deferred income taxes recoverable in rates77 77 
Total SempraTotal Sempra$(1,323)$(1,500)Total Sempra$(699)$(1,479)
(1)    At September 30, 20212022 and December 31, 2020,2021, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $331 million$541 and $139 million,$358, respectively, and for SoCalGas was $472 million$695 and $218 million,$410, respectively.
(2)    Includes regulatory assets earning a return authorized by applicable regulators, which currentlygenerally approximates the three-month commercial paper rate.
CALIFORNIA UTILITIES
COVID-19 Pandemic Protections
In connection with the COVID-19 pandemic, the California Utilities implemented certain measures to assist customers, including suspending service disconnections due to nonpayment for all customers (except for SoCalGas’ noncore customers), waiving late payment fees, and offering flexible payment plans. Such measures ended on June 30, 2021, except for the suspension of service disconnections that ended on September 30, 2021. At the CPUC’s direction, the California Utilities have started to automatically enroll residential and small business customers with past-due balances in long-term repayment plans. The CPUC is continuing to consider the impacts of any state or federal relief programs on customer arrearages and if further debt relief is warranted.
Each of the California Utilities has been authorized to track and request recovery of incremental costs associated with complying with customer protection measures implemented by the CPUC related to the COVID-19 pandemic, including costs associated
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with suspending service disconnections and uncollectible expenses that arise from customers’ failure to pay. The California Utilities expect to pursue recovery of small and medium-large commercial and industrial customers’ tracked costs in rates in a future CPUC proceeding, which recovery is not assured. Uncollectible expenses related to residential customers are recorded in a two-way balancing account as we discuss below.
Disconnection OIR
In June 2020, the CPUC issued a decision to adopt certain customer protections to reduce residential customer disconnections and improve reconnection processes, including, among other things, imposing limitations on service disconnections, elimination of deposit requirements and reconnection fees, establishment of the AMP that provides successfully participating, income-qualified residential customers with relief from outstanding utility bill amounts, and increased outreach and marketing efforts. As permitted by the decision, each of the California Utilities has established a two-way balancing account to record the uncollectible expenses associated with residential customers’ inability to pay their electric or gas bills, including as a result of the relief from outstanding utility bill amounts provided under the AMP.SEMPRA CALIFORNIA
CPUC GRC
The CPUC uses GRCs to set rates designedrevenues to allow the California UtilitiesSDG&E and SoCalGas to recover their reasonable operating costs and to provide the opportunity to realize their authorized rates of return on their investments.
In January 2020,May 2022, SDG&E and SoCalGas filed their 2024 GRC applications requesting CPUC approval of test year revenue requirements for 2024 and attrition year adjustments for 2025 through 2027. SDG&E and SoCalGas requested revenue requirements for 2024 of $3.0 billion and $4.4 billion, respectively. SDG&E and SoCalGas are proposing post-test year revenue requirement changes using various mechanisms that are estimated to result in annual increases of approximately 8% to 11% at SDG&E and approximately 6% to 8% at SoCalGas. In October 2022, the CPUC issued a finalscoping ruling that set a schedule for the proceeding, including the expected issuance of a proposed decision implementing a four-year GRC cycle for California IOUs and the California Utilities were directed to file a petition for modification to revise their 2019 GRC to add two additional attrition years, resulting in a transitional five-year GRC period (2019-2023). The California Utilities filed the petition in April 2020.
In May 2021, the CPUC issued a final decision approving the California Utilities’ request to continue their authorized post-test year mechanisms for 2022 and 2023. For SDG&E, the decision authorizes revenue requirement increases of $87 million (3.92%) for 2022 and $86 million (3.70%) for 2023. For SoCalGas, the decision authorizes revenue requirement increases of $142 million (4.53%) for 2022 and $130 million (3.97%) for 2023.
The 2019 GRC FD clarified that differences between incurred and forecasted income tax expense due to forecasting differences are not subject to tracking in the income tax expense memorandum account beginning in 2019.second quarter of 2024. SDG&E and SoCalGas previously recorded regulatory liabilities, inclusiveexpect the final decision will be effective retroactive to January 1, 2024. SDG&E expects to submit separate requests in its GRC for review and recovery of interest, associated with the 2016its wildfire mitigation plan costs in mid-2023 for costs incurred from 2019 through 2018 tracked forecasting differences of $86 million2022 and $89 million, respectively. In April 2020, the CPUC confirmed treatment of the two-way income tax expense memorandum accountin mid-2024 for these 2016 through 2018 balances, at which time the California Utilities released these regulatory liability balances to revenues and regulatory interest.
We provide additional information concerning the 2019 GRC FDcosts incurred in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.2023.
CPUC Cost of Capital
A CPUC cost of capital proceeding determines a utility’s authorized capital structure and authorized return on rate base. In December 2019,The CCM applies in the CPUC approvedinterim years between required cost of capital applications and considers changes in the cost of capital and rate structures for SDG&E and SoCalGas that became effectivebased on January 1, 2020 and will remain in effect through December 31, 2022, subject to the CCM. The CCM considers changes in interest rates based on the applicable utility bond index published by Moody’s (the CCM benchmark rate) for each 12-month period ending September 30 (the measurement period). The CCM benchmark rate is the basis of comparison to determine if the CCM is triggered, which occurs if the change in the applicable Moody’s utility bond index relative to the CCM benchmark rate is larger than plus or minus 1.000% at the end of the measurement period. The index applicable to SDG&E and SoCalGas is based on each utility’s credit rating. Alternatively, each of SDG&E and SoCalGas is permitted to file a cost of capital application in an interim year in which an extraordinary or catastrophic event materially impacts its cost of capital and affects utilities differently than the market as a whole to have its cost of capital determined in lieu of the CCM.
Authorized Cost of Capital, Subject to the CCM
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.
Alternatively, under the CCM, each of the California Utilities is permitted to file a cost of capital application in an interim year in which an extraordinary or catastrophic event materially impacts its cost of capital. In August 2021, SDG&E filed an application with the CPUC to update its cost of capital effective January 1, 2022 due to the ongoing effects of the COVID-19 pandemic. In this application, SDG&E proposed to adjust its authorized capital structure by increasing its common equity ratio from 52% to 54%. SDG&E also proposed to increase its authorized ROE from 10.20% to 10.55% and decrease its authorized cost of debt from 4.59% to 3.84%. As a result, SDG&E’s proposed return on rate base would decrease from 7.55% to 7.46% if such application is approved by the CPUC as filed. SDG&E filed a joint motion with PG&E and Edison to consolidate all three utilities’ cost of capital applications given the overlapping issues of law and fact, which joint motion was granted in October 2021.
AUTHORIZED CPUC COST OF CAPITAL, SUBJECT TO THE CCM
SDG&ESoCalGas
Authorized weightingReturn on
rate base		Weighted
return on
rate base		Authorized weightingReturn on
rate base		Weighted
return on
rate base
45.25 %4.59 %2.08 %Long-Term Debt45.60 %4.23 %1.93 %
2.75 6.22 0.17 Preferred Equity2.40 6.00 0.14 
52.00 10.20 5.30 Common Equity52.00 10.05 5.23 
100.00 %7.55 %100.00 %7.30 %
For the measurement period that ended September 30, 2021, the CCM would trigger for SDG&E if the CPUC determines that the CCM should be implemented because the average Moody’s Baa- utility bond index between October 1, 2020 and September 30, 2021 was 1.17% below SDG&E’s CCM benchmark rate of
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4.498%. However,In August 2021, SDG&E’s&E filed an application with the CPUC to update its cost of capital effective January 1, 2022, if accepted bydue to the ongoing effects of the COVID-19 pandemic rather than have the CCM apply. In December 2021, the CPUC would supersedeestablished a proceeding to determine if SDG&E’s cost of capital was impacted by an extraordinary event such that the CCM from applying. If such application isshould not accepted,apply.
In November 2022, the CPUC approved a proposed decision that found there was an extraordinary event, the CCM wouldwill be effective January 1,suspended for 2022 and would automatically adjust SDG&E’s authorized ROE from 10.20% to 9.62% and adjust itscurrent authorized cost of debtcapital for 2022 will be preserved.
Proposed Cost of Capital
In April 2022, SDG&E and SoCalGas each filed applications with the CPUC to reflect the then current embedded cost and projected interest rate. SDG&E has requested that a final CPUC decision on its interimupdate their cost of capital, application be issuedas modified by an update to the cost of their long-term debt submitted in September 2022 (shown in the first halftable below), which would become effective
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For the measurement period ended September 30, 2021, the CCM was not triggered for SoCalGas. SoCalGas expects to file its next cost of capital application in April 2022 for aon January 1, 2023 effective date.
SDG&E
FERC Rate Matters and Cost of Capital
SDG&E files separately withwould remain in effect through December 31, 2025, subject to the FERC for its authorized ROE on FERC-regulated electric transmission operations and assets.
SDG&E’s TO4 ROE of 10.05% was the basis of SDG&E’s FERC-related revenue recognition until March 2020, when the FERC approved the settlement terms thatCCM if it remains in place as proposed. SDG&E and all settling parties reached in October 2019 on SDG&E’s TO5 filing. The settlement agreement provided forSoCalGas expect to receive a ROE of 10.60%, consisting of a base ROE of 10.10% plus an additional 50 bps for participation in the California ISO (the California ISO adder). If the FERC issues an order ruling that California IOUs are no longer eligible for the California ISO adder, SDG&E would refund the California ISO adder as of the refund effective date (June 1, 2019) if such a refund is determined to be requiredfinal decision by the terms of the TO5 settlement. The TO5 term is effective June 1, 2019 and shall remain in effect each calendar year until terminated by a notice at least six months before the end of a calendar year. In the first quarter of 2020, SDG&E recorded retroactive revenues of $12 million related to 2019, and additional FERC revenues of $17 million to conclude a rate base matter, net of certain refunds to be paid to CPUC-jurisdictional customers.2022.
Energy Efficiency Program Inquiry
In January 2020, the CPUC issued a ruling seeking comments on a report prepared by its consultant regarding SDG&E’s Upstream Lighting Program for the program year 2017. The CPUC subsequently expanded the scope of the comments to cover the program year 2018. The Upstream Lighting Program was one of SDG&E’s Energy Efficiency Programs designed to produce energy efficiency savings for which SDG&E could earn a performance-based incentive.
Pursuant to the CPUC ruling, intervenors representing ratepayers questioned SDG&E’s management of the program and alleged that certain program expenditures did not benefit the purpose of the program. As a result of the inquiry, SDG&E voluntarily expanded its review to include the program year 2019. Based on this review, SDG&E concluded some concessions were appropriate, which included refunding certain costs to customers and reducing certain performance-based incentives. Accordingly, in the three months and nine months ended September 30, 2020, SDG&E reduced revenues by $36 million and $51 million, respectively, and recorded a fine of $6 million in Other (Expense) Income, Net, on the SDG&E and Sempra Condensed Consolidated Statements of Operations. The after-tax impact for the three months and nine months ended September 30, 2020 was $29 million and $44 million, respectively. In October 2020, SDG&E executed a settlement agreement with intervenors consistent with these concessions. In September 2021, the CPUC approved the settlement agreement.
PROPOSED CPUC COST OF CAPITAL
SDG&ESoCalGas
Authorized weightingReturn on
rate base		Weighted
return on
rate base		Authorized weightingReturn on
rate base		Weighted
return on
rate base
46.00 %4.05 %1.86 %Long-Term Debt45.60 %4.07 %1.86 %
— — — Preferred Equity0.40 6.00 0.02 
54.00 10.55 5.70 Common Equity54.00 10.75 5.81 
100.00 %7.56 %100.00 %7.69 %
SOCALGAS
OSCs – Energy Efficiency and Advocacy
In October 2019, the CPUC issued an OSC to determine whether SoCalGas should be sanctioned for violation of certain CPUC code sections and orders. The OSC stemmed from a short period of transitionalorders relating to energy efficiency (EE) codes and standards advocacy activities, which were undertaken by SoCalGas in 2018, following a CPUC decision disallowing SoCalGas’ future engagement in advocacy around such EE statewidecodes and standards. In March 2022, the CPUC issued a final decision that found that SoCalGas did undertake prohibited EE codes and standards advocacy. We are awaitingadvocacy activities using ratepayer funds. The final decision imposed on SoCalGas a CPUC decision.financial penalty of $10 million; customer refunds for certain ratepayer expenditures and shareholder incentives that SoCalGas estimates will be negligible; and a prohibition from recovering from ratepayers costs of proposed codes and standards advocacy activities until SoCalGas demonstrates policies, practices and procedures that adhere to the CPUC’s intent for codes and standards advocacy.
In December 2019, the CPUC issued a second OSC to determine whether SoCalGas is entitled to the EE program’s shareholder incentives for codes and standards advocacy activities in 2016 and 2017 (later expanded to include 2014 and 2015), whether its shareholders should bear the costs of those advocacy activities, and to address whether any other remedies are appropriate. The scope of this OSC was later expanded to include EE program years 2014 and 2015, and SoCalGas’ engagement with local governments on proposed reach codes. In April 2021,2022, the assigned Administrative Law JudgeCPUC issued a Presiding Officer’s Decision (POD) on the second OSC. The POD finds nofinal decision that found there were violations of certain legal principles and assesses no fines or penalties but finds that SoCalGas spent ratepayer funds on activities that were not aligned with the CPUC’s intent for EE codes and standards advocacy. The POD, which is currently under appeal by intervenors, orders customer refunds that SoCalGas expects will be negligible (subject toimposed a CPUC audit). Additionally, the POD precludes SoCalGas
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from seeking cost recovery associated with EE codes and standards advocacy programs until lifted by the CPUC, and orders certain nonfinancial remedies.
Intervenors in these OSCs have suggested the CPUC order various financial and non-financial penalties. If the CPUC were to assess fines or penalties on SoCalGas associated with these OSCs, they could be material.penalty of $150,000.
NOTE 5. ACQUISITIONS DIVESTITURES AND DISCONTINUED OPERATIONSDIVESTITURES
ACQUISITION
Sempra MexicoInfrastructure
ESJ
In March 2021, IEnovaSempra Infrastructure completed the acquisition of Saavi Energía’s 50% equity interest in ESJ for a purchase price of approximately $65 million (net of $14 million of acquired cash and cash equivalents) plus the assumption of $277 million in debt (including $94 million owed from ESJ to IEnovaSempra Infrastructure that eliminates upon consolidation). IEnovaSempra Infrastructure previously accounted for its 50% interest in ESJ as an equity method investment. This acquisition increased IEnova’sSempra Infrastructure’s ownership interest in ESJ from 50% to 100%. We accounted for this asset acquisition using a cost accumulation model whereby the cost of the acquisition and carrying value of our previously held interest in ESJ ($34 million) were allocated to assets acquired ($458 million) and liabilities assumed ($345 million) based on their relative fair values. ESJ owns a fully operating wind power generation facility with a nameplate capacity of 155 MW that is fully contracted by SDG&E under a long-term PPA. IEnovaSempra Infrastructure recorded a $190 million intangible asset for the relative fair value of the PPA that will be amortized over a period of 14 years against revenues. On January 15, 2022, ESJ is constructingcompleted construction and began commercial operation of a second wind power generation facility with a nameplate capacity of 108 MW that we expect will be completed in the first quarter of 2022.

DISCONTINUED OPERATIONS
In April 2020, we completed the sale of our equity interests in our Peruvian businesses, including our 83.6% interest in Luz del Sur and its interest in Tecsur, to an affiliate of China Yangtze Power International (Hongkong) Co., Limited for cash proceeds of $3,549 million, net of transaction costs and as adjusted for post-closing adjustments, and recordedis also fully contracted by SDG&E under a pretax gain of $2,271 million ($1,499 million after tax).
In June 2020, we completed the sale of our equity interests in our Chilean businesses, including our 100% interest in Chilquinta Energía and Tecnored and our 50% interest in Eletrans, to State Grid International Development Limited for cash proceeds of $2,216 million, net of transaction costs and as adjusted for post-closing adjustments, and recorded a pretax gain of $628 million ($248 million after tax).
In the three months and nine months ended September 30, 2020, the pretax gains from the sales of our South American businesses are included in (Loss) Gain on Sale of Discontinued Operations in the table below and the after-tax gains are included in (Loss) Income from Discontinued Operations, Net of Income Tax, on Sempra’s Condensed Consolidated Statements of Operations.long-term PPA.
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Summarized results from discontinued operations were as follows:
DISCONTINUED OPERATIONS
(Dollars in millions)
 
Three months ended September 30, 2020(1)
Nine months ended September 30, 2020(2)
Revenues$— $570 
Cost of sales— (364)
(Loss) gain on sale of discontinued operations(16)2,899 
Operating expenses— (66)
Interest and other— (3)
Income before income taxes(16)3,036 
Income tax benefit (expense)9 (1,186)
(Loss) income from discontinued operations, net of income tax(7)1,850 
Earnings attributable to noncontrolling interests— (10)
(Losses) earnings from discontinued operations attributable to Sempra$(7)$1,840 
(1)    Represents post-closing adjustments related to the sale of our equity interests in our Chilean businesses.
(2)    Results include activity until the sale of our Peruvian businesses on April 24, 2020 and Chilean businesses on June 24, 2020.

As a result of the sales of our South American businesses, in the second quarter of 2020, we reclassified $645 million of cumulative foreign currency translation losses from AOCI to (Loss) Gain on Sale of Discontinued Operations, which is included in (Loss) Income from Discontinued Operations, Net of Income Tax, on Sempra’s Condensed Consolidated Statements of Operations.
NOTE 6. INVESTMENTS IN UNCONSOLIDATED ENTITIES
We generally account for investments under the equity method when we have significant influence over, but do not have control of, these entities. Equity earnings and losses, both before and net of income tax, are combined and presented as Equity Earnings on the Condensed Consolidated Statements of Operations. See Note 12 for information on equity earnings and losses, both before and net of income tax, by segment. See Note 1 for information on how equity earnings and losses before income taxes are factored into the calculations of our pretax income or loss and ETR.
We provide additional information concerning our equity method investments in Notes 5 and 6 of the Notes to Consolidated Financial Statements in the Annual Report.
SEMPRA TEXAS UTILITIES
Oncor Holdings
We account for our 100% ownership interest in Oncor Holdings, which owns an 80.25% interest in Oncor, as an equity method investment. Due to the ring-fencing measures, governance mechanisms and commitments in effect, we do not have the power to direct the significant activities of Oncor Holdings and Oncor. See Note 6 of the Notes to Consolidated Financial Statements in the Annual Report for additional information related to the restrictions on our ability to direct the significant activities of Oncor Holdings and Oncor.
In the nine months ended September 30, 20212022 and 2020,2021, Sempra contributed $151$256 million and $209$151 million, respectively, to Oncor Holdings, and Oncor Holdings distributed $239$255 million and $220$239 million, respectively, to Sempra. Additionally, in the nine months ended September 30, 2021, Oncor Holdings distributed a $361 million return of investment to Sempra.
We provide summarized income statement information for Oncor Holdings in the following table.
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SUMMARIZED FINANCIAL INFORMATION – ONCOR HOLDINGSSUMMARIZED FINANCIAL INFORMATION – ONCOR HOLDINGSSUMMARIZED FINANCIAL INFORMATION – ONCOR HOLDINGS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended
September 30,
20212020202120202022202120222021
Operating revenuesOperating revenues$1,286 $1,232 $3,572 $3,394 Operating revenues$1,438 $1,286 $3,980 $3,572 
Operating expensesOperating expenses(866)(819)(2,531)(2,387)Operating expenses(929)(866)(2,734)(2,531)
Income from operationsIncome from operations420 413 1,041 1,007 Income from operations509 420 1,246 1,041 
Interest expenseInterest expense(104)(102)(308)(305)Interest expense(115)(104)(331)(308)
Income tax expenseIncome tax expense(54)(50)(124)(115)Income tax expense(70)(54)(164)(124)
Net incomeNet income255 255 587 557 Net income315 255 732 587 
Noncontrolling interest held by TTI(51)(50)(118)(111)
Noncontrolling interest held by Texas Transmission Investment LLCNoncontrolling interest held by Texas Transmission Investment LLC(62)(51)(146)(118)
Earnings attributable to Sempra(1)
Earnings attributable to Sempra(1)
204 205 469 446 
Earnings attributable to Sempra(1)
253 204 586 469 
(1)    Excludes adjustments to equity earnings related to amortization of a tax sharing liability associated with a tax sharing arrangement and changes in basis differences in AOCI within the carrying value of our equity method investment.
SEMPRA MEXICOINFRASTRUCTURE
ESJCameron LNG JV
As we discuss in Note 5, in March 2021, IEnova completed the acquisition of the remaining 50% equity interest in ESJ and ESJ became a wholly owned, consolidated subsidiary. Prior to the acquisition date, IEnova owned 50% of ESJ and accounted for its interest as an equity method investment. In the nine months ended September 30, 2021 and 2020, ESJ distributed a $42022, Sempra Infrastructure contributed $19 million and $8 million, respectively, return of investment to IEnova.
SEMPRA LNG
Cameron LNG JV
JV. In the nine months ended September 30, 2022 and 2021, Cameron LNG JV distributed to Sempra LNGInfrastructure $388 million and $496 million, respectively, of which $165 million relates to the 2021 distribution from Cameron LNG JV’s SDSRA that we discuss below.
In the nine months ended September 30, 2020, Sempra LNG contributed $54 million to Cameron LNG JV, and Cameron LNG JV distributed to Sempra LNG $209 million and a return of investment of $803 million.
In March 2021, Cameron LNG JV reached financial completion of the three-train liquefaction project, and Sempra’s related guarantees for a maximum aggregate amount of $4.0 billion were terminated. We discuss these guarantees in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.
Sempra Promissory Note for SDSRA Distribution
Cameron LNG JV’s debt agreements require Cameron LNG JV to maintain the SDSRA, which is an additional reserve account beyond the Senior Debt Service Accrual Account, where funds accumulate from operations to satisfy senior debt obligations due and payable on the next payment date. Both accounts can be funded with cash or authorized investments. In June 2021, Sempra LNGInfrastructure received a distribution of $165 million based on its proportionate share of the SDSRA, for which Sempra provided
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a promissory note and letters of credit to secure a proportionate share of Cameron LNG JV’s obligation to fund the SDSRA. Sempra’s maximum exposure to loss is replenishment of the amount withdrawn by Sempra LNGInfrastructure from the SDSRA, or $165 million. We recorded a guarantee liability of $22 million in June 2021, with an associated carrying value of $2221 million at September 30, 2021,2022, for the fair value of the promissory note, which is being reduced over the duration of the guarantee through Sempra LNG’sInfrastructure’s investment in Cameron LNG JV. The guarantee will terminate upon full repayment of Cameron LNG JV’s debt, scheduled to occur in 2039, or replenishment of the amount withdrawn by Sempra LNGInfrastructure from the SDSRA.
Sempra Support Agreement for CFIN
In July 2020, CFIN entered into a financing arrangement with Cameron LNG JV’s four project owners and received aggregate proceeds of $1.5 billion from two project owners and from external lenders on behalf of the other two project owners (collectively, the affiliate loans), based on their proportionate ownership interest in Cameron LNG JV. CFIN used the proceeds from the affiliate loans to provide a loan to Cameron LNG JV. The affiliate loans mature in 2039. Principal and interest will be paid from Cameron LNG JV’s project cash flows from its three-train natural gas liquefaction facility. Cameron LNG JV used the
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proceeds from its loan to return equity to its project owners. Sempra used its $753 million share of the proceeds for working capital and other general corporate purposes, including the repayment of indebtedness.
Sempra LNG’sInfrastructure’s $753 million proportionate share of the affiliate loans, based on its 50.2% ownership interest in Cameron LNG JV, was funded by external lenders comprised of a syndicate of 8eight banks (the bank debt) to whom Sempra has provided a guarantee pursuant to a Support Agreement as amended on June 29, 2021, under which:
▪Sempra has severally guaranteed repayment of the bank debt plus accrued and unpaid interest if CFIN fails to pay the external lenders;
▪the external lenders may exercise an option to put the bank debt to Sempra LNGInfrastructure upon the occurrence of certain events, including a failure by CFIN to meet its payment obligations under the bank debt;
▪the external lenders will put some or all of the bank debt to Sempra LNGInfrastructure on the fifth, tenth, or fifteenth anniversary date of the affiliate loans, except the portion of the debt owed to any external lender that has elected not to participate in the put option six months prior to the respective anniversary date;
▪Sempra LNGInfrastructure also has a right to call the bank debt back from, or to refinance the bank debt with, the external lenders at any time; and
▪the Support Agreement will terminate upon full repayment of the bank debt, including repayment following an event in which the bank debt is put to Sempra LNG.Infrastructure.
In exchange for this guarantee, the external lenders will pay a guarantee fee that is based on the credit rating of Sempra’s long-term senior unsecured non-credit enhanced debt rating, which guarantee fee Sempra LNGInfrastructure will recognize as interest income as earned. Sempra’s maximum exposure to loss is the bank debt plus any accrued and unpaid interest and related fees, subject to a liability cap of 130% of the bank debt, or $979 million. We measure the Support Agreement at fair value, net of related guarantee fees, on a recurring basis (see Note 9). At September 30, 2021,2022, the fair value of the Support Agreement was $5$16 million, of which $7 million is included in Other Current Assets offset by $2and $9 million is included in Deferred Credits and Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheet.
PARENT AND OTHER
RBS Sempra CommoditiesESJ
As we discuss in Note 11,5, in March 2021, Sempra Infrastructure completed the nine months ended September 30, 2020, we recorded a charge of $100 million in Equity Earnings on Sempra’s Condensed Consolidated Statement of Operations representing our share of estimated losses in excessacquisition of the carrying valueremaining 50% equity interest in ESJ and ESJ became a wholly owned, consolidated subsidiary. Prior to the acquisition date, Sempra Infrastructure owned 50% of ourESJ and accounted for its interest as an equity method investment in RBS Sempra Commodities.investment. In the nine months ended September 30, 2021, we reduced this charge by $50ESJ distributed a $4 million based onreturn of investment to IEnova.
TAG
In the favorable outcome of a settlement with HMRC and revised assumptions on the High Court of Justice case.nine months ended September 30, 2022, TAG distributed $32 million to Sempra Infrastructure.
NOTE 7. DEBT AND CREDIT FACILITIES
LINES OF CREDIT
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Primary U.S. Committed Lines of Credit
In May 2021, Sempra Global assigned its $3.2 billion, five-year committed line of credit facility to Sempra and Sempra assumed all rights and responsibilities under the credit agreement. Also, in May 2021, Sempra established a commercial paper program to replace Sempra Global’s commercial paper program that was terminated in June 2021.
At September 30, 2021, Sempra had an aggregate capacity of $6.7 billion from primary U.S. committed lines of credit, which provide liquidity and support commercial paper. The principal terms of these committed lines of credit, which expire in May 2024,our debt arrangements are described below and in Note 7 of the Notes to Consolidated Financial Statements in the Annual Report.
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SHORT-TERM DEBT
PRIMARY U.S. COMMITTED LINES OF CREDIT
(Dollars in millions)
September 30, 2021
Total facility
Commercial paper outstanding(1)(2)
Available unused credit
Sempra(3)
$4,435 $(2,112)$2,323 
SDG&E(4)
1,500 — 1,500 
SoCalGas(4)
750 — 750 
Total$6,685 $(2,112)$4,573 
Committed Lines of Credit
(1)    At September 30, 2022, Sempra had an aggregate capacity of $9.5 billion under seven primary committed lines of credit, which provide liquidity and support commercial paper programs. Because theour commercial paper programs are supported by some of these lines of credit, we reflect the amount of commercial paper outstanding, before reductions of any unamortized discounts, and any letters of credit outstanding as a reduction to the available unused credit.credit capacity.
COMMITTED LINES OF CREDIT
(Dollars in millions)
September 30, 2022
BorrowerExpiration date of facilityTotal facilityCommercial paper outstandingAmounts outstandingAvailable unused credit
SempraMay 2024$3,185 $(161)$— $3,024 
SempraMay 20241,250 — — 1,250 
SDG&EMay 20241,500 — — 1,500 
SoCalGasMay 2024750 (427)— 323 
SI PartnersNovember 20241,000 — — 1,000 
IEnovaSeptember 2023350 — (295)55 
IEnovaFebruary 20241,500 — — 1,500 
Total$9,535 $(588)$(295)$8,652 
In October 2022, Sempra, SDG&E and SoCalGas each entered into a separate five-year credit facility all expiring in October 2027. The credit facilities permit borrowings of up to $4.0 billion by Sempra, $1.5 billion by SDG&E and $1.2 billion by SoCalGas. The credit facilities replace Sempra’s $3.19 billion credit facility and $1.25 billion credit facility, SDG&E’s $1.5 billion credit facility and SoCalGas’ $750 million credit facility, which were set to expire in 2024. The principal terms of these primary committed lines of credit include the following:
▪Each facility has a syndicate of 23 lenders. No single lender has greater than a 6% share in any facility.
(2)    ▪Commercial paper outstanding is before reductions of a negligible amount of unamortized discount.
(3)    The facility also providesSempra’s, SDG&E’s and SoCalGas’ facilities provide for the issuance of $200 million, $100 million and $150 million, respectively, of letters of credit on behalf of Sempra with the amount of borrowings otherwise available under the facility reduced by the amount of outstanding letters of credit. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, Sempra, SDG&E and SoCalGas each has the right to increase theits letter of credit commitment to up to $500 million. No letters of credit were outstanding at September 30, 2021.million, $250 million and $250 million, respectively.
(4)    ▪The facility also provides for issuance of $100 million of letters of credit on behalf of the borrowing utilityBorrowings bear interest at a benchmark rate plus a margin that varies with the amount of borrowings otherwise available under the facility reduced by the amount of outstanding letters of credit. Subject to obtaining commitments from existing or new lenders and satisfaction of other specified conditions, the borrowing utility has the right to increase the letter ofborrower’s credit commitment up to $250 million. No letters of credit were outstanding at September 30, 2021.rating.

▪
Sempra, SDG&E and SoCalGas eachEach borrower must maintain a ratio of indebtedness to total capitalization (as defined in each of the applicable credit facilities) of no more than 65% at the end of each quarter. At September 30, 2021,2022, each entity was in compliance with this ratio under its respective credit facility.
Foreign Committed LinesSI Partners must maintain a ratio of Credit
Our foreign operationsconsolidated adjusted net indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (as defined in Mexico have committed linesits credit facility) of credit with an aggregate capacityno more than 5.25 to 1.00 as of $1.9 billion atthe end of each quarter. At September 30, 2021. The principal terms of these committed lines of credit are described2022, SI Partners was in Note 7 of the Notes to Consolidated Financial Statements in the Annual Report.compliance with this ratio.
FOREIGN COMMITTED LINES OF CREDIT
(U.S. dollar equivalent in millions)
September 30, 2021
Expiration date of facilityTotal facilityAmounts outstandingAvailable unused credit
February 2024$1,500 $— $1,500 
September 2023(1)
350 (294)56 
Total$1,850 $(294)$1,556 
(1)    In September 2021, IEnova amended this revolving credit facility to increase the amount available under the facility from $280 million to $350 million and extend the expiration of the facility from September 2021 to September 2023. Borrowings continue to bear interest at a per annum rate equal to 3-month LIBOR plus 54 bps.

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Foreign Uncommitted Lines of Credit
In addition to our committed lines of credit, ourSempra Infrastructure’s foreign operations in Mexico have uncommitted lines of credit with an aggregate capacity of $470$320 million at September 30, 2021,2022, which are generally used for working capital requirements. We reflect amounts outstanding under these uncommitted lines of credit before reductions of any unamortized discounts.
FOREIGN UNCOMMITTED LINES OF CREDIT
(U.S. dollar equivalent in millions)
September 30, 2021
Expiration date of facilityBorrowing denominationTotal facilityAmounts outstandingAvailable unused credit
September 2022(1)
U.S. dollars$250 $(250)$— 
August 2023(2)
U.S. dollars or Mexican pesos100 (37)63 
October 2023(3)
U.S. dollars100 — 100 
October 2023(4)
U.S. dollars or Mexican pesos20 — 20 
Total$470 $(287)$183 
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FOREIGN UNCOMMITTED LINES OF CREDIT
(Dollars and U.S. dollar equivalent in millions)
September 30, 2022
BorrowerExpiration date of facilityBorrowing denominationTotal facilityAmounts outstandingAvailable unused credit
ECA LNG Phase 1(1)
August 2023U.S. dollars or Mexican pesos$200 $(17)$183 
IEnova(2)
October 2023U.S. dollars100 (50)50 
IEnovaOctober 2023U.S. dollars or Mexican pesos20 — 20 
Total$320 $(67)$253 
(1)    IEnova’s one-year credit agreement under which borrowings bear interest at a per annum rate equalIn March 2022, the facility was amended to 3-month LIBOR plus 10 bps.increase the borrowing capacity from $100 to $200.
(2)    ECA LNG Phase 1’s two-year credit agreement underAdvances are due in full within 180 days of the disbursement date, which outstanding amounts were borrowedmay be extended in Mexican pesos and bear interest atincrements of 180 days provided that no advance may have a variable rate based on the 28-day Interbank Equilibrium Interest Rate plus 105 bps and are before reductions from negligible unamortized discount. Borrowings made in U.S. dollars bear interest at a variable rate based on the 1-month or 3-month LIBOR plus 105 bps.
(3)    IEnova’s three-year credit agreement under which borrowings bear interest at a per annum rate equal to 6-month LIBOR plus 52 bps.
(4)    IEnova’s three-year credit agreement under which borrowings made in Mexican pesos bear interest at a variable rate based on the 28-day Interbank Equilibrium Interest Rate plus an applicable margin. Borrowings made in U.S. dollars bear interest at a variable rate based on 1-month LIBOR plus an applicable margin. The applicable margin is determined onmaturity date that falls more than three years after the date of borrowing.disbursement.

Uncommitted Letters of Credit
Outside of our domestic and foreign committed credit facilities, we have bilateral unsecured standby letter of credit capacity with select lenders that is uncommitted and supported by reimbursement agreements. At September 30, 2021,2022, we had approximately $697$623 million in standby letters of credit outstanding under these agreements.
TERM LOAN
UNCOMMITTED LETTERS OF CREDIT
(Dollars in millions)
September 30, 2022
Expiration date rangeUncommitted letters of credit outstanding
SDG&EJanuary 2023 to May 2023$15 
SoCalGasNovember 2022 to October 202320 
Sempra InfrastructureOctober 2022 to October 2043402 
Parent and otherNovember 2022 to November 2023186 
Total$623 
Term Loan
In June 2021, SDG&EJuly 2022, SoCalGas entered into a $375an $800 million, 364-day term loan agreement with a maturity date of June 27, 2022. At September 30, 2021, $375July 6, 2023. In August 2022, SoCalGas borrowed $800 million, net of negligible debt issuance costs, was outstanding under the term loan.loan agreement. The borrowing bears interest at benchmark rates plus 62.5 bps. The term loan provides SDG&E with additional liquidity outside70 bps and is due in full upon maturity. SoCalGas used the proceeds for payment of its linea portion of credit.the costs relating to litigation pertaining to the Leak.
WEIGHTED-AVERAGE INTEREST RATESWeighted-Average Interest Rates
The weighted-average interest rates on the totalall short-term debt at September 30, 2021 and December 31, 2020 were as follows:
WEIGHTED-AVERAGE INTEREST RATES
September 30, 2021December 31, 2020
Sempra0.39 %0.83 %
SDG&E0.76 — 
SoCalGas— 0.14 
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WEIGHTED-AVERAGE INTEREST RATES
September 30, 2022December 31, 2021
Sempra3.69 %0.60 %
SDG&E— 0.65 
SoCalGas3.53 0.21 
LONG-TERM DEBT
SDG&ESempra
In August 2021, SDG&EMarch 2022, we issued $750 million aggregate principal amount of 2.95% green first mortgage bonds maturing3.30% senior unsecured notes due in 2051full upon maturity on April 1, 2025 and received proceeds of $737$745 million (net of debt discount, underwriting discounts and debt issuance costs of $13$5 million), and $500 million of 3.70% senior unsecured notes due in full upon maturity on April 1, 2029 and received proceeds of $494 million (net of debt discount, underwriting discounts and debt issuance costs of $6 million). SDG&E intendsEach series of the notes is redeemable prior to usematurity, subject to their terms, and in certain circumstances subject to make-whole provisions. We used the net proceeds to finance or refinance eligible projects that fallfor general corporate purposes and repayment of commercial paper.
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SDG&E
In February 2022, SDG&E entered into one or morea $400 million, two-year term loan with a maturity date of February 18, 2024. SDG&E borrowed $200 million in the following categories: climate change adaptation, clean energy solutionsthree months ended March 31, 2022 and clean transportation.an additional $200 million in the three months ended June 30, 2022. The borrowings bear interest at benchmark rates plus 62.5 bps and are due in full upon maturity. The margin is based on SDG&E’s long-term senior unsecured credit rating. SDG&E used the net proceeds for repayment of commercial paper and for general corporate purposes.
Sempra Mexico
As we discussIn March 2022, SDG&E issued $500 million aggregate principal amount of 3.00% first mortgage bonds due in Note 5, through its acquisitionfull upon maturity on March 15, 2032 and received proceeds of ESJ, Sempra Mexico assumed a $177$494 million (net of debt discount, underwriting discounts and debt issuance costs of $6 million), and $500 million aggregate principal amount of 3.70% first mortgage bonds due in full upon maturity on March 15, 2052 and received proceeds of $492 million (net of debt discount, underwriting discounts and debt issuance costs of $8 million). Each of the first mortgage bonds are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. SDG&E used the net proceeds for repayment of commercial paper and its 364-day term loan and for capital expenditures and other general corporate purposes.
SoCalGas
In March 2022, SoCalGas issued $700 million aggregate principal amount of 2.95% senior unsecured notes due in full upon maturity on April 15, 2027 and received proceeds of $691 million (net of debt discount, underwriting discounts and debt issuance costs of $9 million). The notes are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. SoCalGas used the net proceeds for repayment of commercial paper and general corporate purposes.
Sempra Infrastructure
SI Partners
In January 2022, SI Partners completed a private offering of $400 million in unamortizedaggregate principal of 3.25% senior notes due in full upon maturity on January 15, 2032 to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and non-U.S. persons outside the U.S. under Regulation S under the Securities Act. The notes are senior unsecured obligations that rank equally with all of SI Partners’ existing and future outstanding unsecured senior indebtedness and are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. Sempra Infrastructure received proceeds of $390 million (net of debt discount, underwriting discounts and debt issuance costs) variable rate loan payable to a syndicatecosts of five lenders that matures in June 2033. To moderate exposure to interest rate and associated cash flow variability, ESJ entered into floating-to-fixed rate swaps$10 million). Sempra Infrastructure used the net proceeds for 90%general corporate purposes, including the repayment of the principal balance, resulting in a fixed ratecertain indebtedness of 6.13%. The remaining 10% of the principal balance bears interest at 6-month LIBOR plus a margin of 2.63% with an increase of 25 bps every four years (2.80% at September 30, 2021). On October 8, 2021, Sempra Mexico used proceeds from borrowings against its committed and uncommitted lines of credit to fully repay $175 million of outstanding principal plus accrued and unpaid interest on the ESJ loan prior to its scheduled maturity in 2033, and recognized approximately $16 million ($10 million after tax and NCI) in charges associated with hedge termination costs and a write-off of unamortized debt issuance costs.subsidiaries.
On October 13, 2021, Sempra Mexico used proceeds from borrowings against its committed and uncommitted lines of credit to fully repay $375 million of outstanding principal plus accrued and unpaid interest on the Ventika fixed- and variable-rate loans prior to scheduled maturity dates through 2032, and recognized approximately $34 million ($20 million after tax and NCI) in charges associated with hedge termination costs and a write-off of unamortized debt issuance costs.
SempraECA LNG Phase 1
In December 2020, ECA LNG Phase 1 entered into a five-year loan agreement with a syndicate of 9 banksnine external lenders for an aggregate principal amount of up to $1.6$1.5 billion. Sempra, IEnova and TotalEnergies SE provided guarantees for repayment of the loans plus accrued and unpaid interest based on their proportionate ownership interest in ECA LNG Phase 1 of 41.7%, 41.7% and 16.6%, respectively. In July 2022, ECA LNG Phase 1 replaced Sempra with IEnova as the guarantor and replaced two of the nine external lenders and their combined principal commitment of $203 million (of which $64 million was outstanding and repaid) with a shareholder loan from IEnova, thereby reducing the syndicate to seven external lenders and reducing the aggregate principal amount of borrowing capacity from external lenders to $1.3 billion. At September 30, 20212022 and December 31, 2020, $2912021, $455 million and $17$341 million, respectively, wasof borrowings from external lenders were outstanding under the loan agreement, with a weighted-average interest rate of 2.84%6.54% and 2.82%2.93%, respectively. We discuss
IEnova Pipelines
In September 2022, Sempra Infrastructure used proceeds from borrowings against IEnova’s committed and uncommitted lines of credit to fully repay $141 million of outstanding principal plus accrued and unpaid interest on the details of this agreement in Note 7 of the Notes to Consolidated Financial Statements in the Annual Report.
Parent and Other
On November 1, 2021, Sempra issued notices to redeem, at respective make-whole redemption prices, an aggregate principal amount of $2.35 billion of senior unsecured notesIEnova Pipelines variable-rate loans prior to scheduled maturities in 2022maturity dates through 2025. Upon redemption, which is scheduled to occur in December 2021, we expect to recognize2026, and recognized approximately $128$2 million ($931 million after tax)tax and NCI) in charges associated with the make-whole premiums from the early redemptions and write-off of unamortized discount and debt issuance costs. Asacquisition-related fair value adjustments offset by a result of our expected early redemption, this debt was classified as Current Portion of Long-Term Debt and Finance Leases on Sempra’s Condensed Consolidated Balance Sheet at September 30, 2021.hedge termination benefit.
NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS
We use derivative instruments primarily to manage exposures arising in the normal course of business. Our principal exposures are commodity market risk, benchmark interest rate risk and foreign exchange rate exposures. Our use of derivatives for these
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risks is integrated into the economic management of our anticipated revenues, anticipated expenses, assets and liabilities. Derivatives may be effective in mitigating these risks (1) that could lead to declines in anticipated revenues or increases in anticipated expenses, or (2) that could cause our asset values to fall or our liabilities to increase. Accordingly, our derivative activity summarized below generally represents an impact that is intended to offset associated revenues, expenses, assets or liabilities that are not included in the tables below.
In certain cases, we apply the normal purchase or sale exception to derivative instruments and have other commodity contracts that are not derivatives. These contracts are not recorded at fair value and are therefore excluded from the disclosures below.
In all other cases, we record derivatives at fair value on the Condensed Consolidated Balance Sheets. We may have derivatives that are (1) cash flow hedges, (2) fair value hedges, or (3) undesignated. Depending on the applicability of hedge accounting and, for the California UtilitiesSDG&E and SoCalGas and other operations subject to regulatory accounting, the requirement to pass impacts through to customers, the impact of derivative instruments may be offset in OCI (cash flow hedges), on the balance sheet (regulatory offsets), or
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recognized in earnings (fair value hedges and undesignated derivatives not subject to rate recovery). We classify cash flows from the principal settlements of cross-currency swaps that hedge exposure related to Mexican peso-denominated debt and hedge termination costs on interest rate swaps as financing activities and settlements of other derivative instruments as operating activities on the Condensed Consolidated Statements of Cash Flows.
HEDGE ACCOUNTING
We may designate a derivative as a cash flow hedging instrument if it effectively converts anticipated cash flows associated with revenues or expenses to a fixed dollar amount. We may utilize cash flow hedge accounting for derivative commodity instruments, foreign currency instruments and interest rate instruments. Designating cash flow hedges is dependent on the business context in which the instrument is being used, the effectiveness of the instrument in offsetting the risk that the future cash flows of a given revenue or expense item may vary, and other criteria.
ENERGY DERIVATIVES
Our market risk is primarily related to natural gas and electricity price volatility and the specific physical locations where we transact. We use energy derivatives to manage these risks. The use of energy derivatives in our various businesses depends on the particular energy market, and the operating and regulatory environments applicable to the business, as follows:
▪The California UtilitiesSDG&E and SoCalGas use natural gas derivatives and SDG&E uses electricity derivatives, for the benefit of customers, with the objective of managing price risk and basis risks,risk, and stabilizing and lowering natural gas and electricity costs. These derivatives include fixed-price natural gas and electricity positions, options, and basis risk instruments, which are either exchange-traded or over-the-counter financial instruments, or bilateral physical transactions. This activity is governed by risk management and transacting activity plans that have been filed with and approved by the CPUC. Natural gas and electricity derivative activities are recorded as commodity costs that are offset by regulatory account balances and are recovered in rates. Net commodity cost impacts on the Condensed Consolidated Statements of Operations are reflected in Cost of Natural Gas or in Cost of Electric Fuel and Purchased Power or in Cost of Natural Gas.Power.
▪SDG&E is allocated and may purchase CRRs, which serve to reduce the regional electricity price volatility risk that may result from local transmission capacity constraints. Unrealized gains and losses do not impact earnings, as they are offset by regulatory account balances. Realized gains and losses associated with CRRs, which are recoverable in rates, are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations.
▪Sempra Mexico and Sempra LNGInfrastructure may use natural gas and electricity derivatives, as appropriate, in an effort to optimize the earnings of their assets which support the following businesses: LNG, natural gas transportation and storage, and power generation. Gains and losses associated with undesignated derivatives are recognized in Energy-Related Businesses Revenues on the Condensed Consolidated Statements of Operations. Certain of these derivatives may also be designated as cash flow hedges.
▪From time to time, our various businesses, including the California Utilities,SDG&E and SoCalGas, may use other energy derivatives to hedge exposures such as the price of vehicle fuel and greenhouse gas allowances.
The following table summarizes net energy derivative volumes.
NET ENERGY DERIVATIVE VOLUMES
(Quantities in millions)
CommodityUnit of measureSeptember 30, 2021December 31, 2020
Sempra:
Natural gasMMBtu(14)5 
ElectricityMWh1 1 
Congestion revenue rightsMWh48 43 
SDG&E:
Natural gasMMBtu10 16 
ElectricityMWh1 1 
Congestion revenue rightsMWh48 43 
SoCalGas:
Natural gasMMBtu— 1 

In addition to the amounts noted above, we use commodity derivatives to manage risks associated with the physical locations of contractual obligations and assets, such as natural gas purchases and sales.
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NET ENERGY DERIVATIVE VOLUMES
(Quantities in millions)
CommodityUnit of measureSeptember 30, 2022December 31, 2021
Sempra:
Natural gasMMBtu222 184 
ElectricityMWh— 1 
Congestion revenue rightsMWh47 45 
SDG&E:
Natural gasMMBtu13 7 
ElectricityMWh— 1 
Congestion revenue rightsMWh47 45 
SoCalGas:
Natural gasMMBtu196 201 
INTEREST RATE DERIVATIVES
We are exposed to interest rates primarily as a result of our current and expected use of financing. The California Utilities,SDG&E and SoCalGas, as well as Sempra and its other subsidiaries and JVs, periodically enter into interest rate derivative agreements intended to moderate our exposure to interest rates and to lower our overall costs of borrowing. In addition, we may utilize interest rate swaps, typically designated as cash flow hedges, to lock in interest rates on outstanding debt or in anticipation of future financings.
The following table presents the net notional amounts of our interest rate derivatives, excluding JVs.those in our equity method investments.
INTEREST RATE DERIVATIVESINTEREST RATE DERIVATIVESINTEREST RATE DERIVATIVES
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30, 2021December 31, 2020 September 30, 2022December 31, 2021
Notional debtMaturitiesNotional debtMaturities Notional debtMaturitiesNotional debtMaturities
Sempra:Sempra:    Sempra:    
Cash flow hedgesCash flow hedges$747 2021-2034$1,486 2021-2034Cash flow hedges$297 2022-2034$462 2022-2034
FOREIGN CURRENCY DERIVATIVES
We utilize cross-currency swaps to hedge exposure related to Mexican peso-denominated debt at our Mexican subsidiaries and JVs. These cash flow hedges exchange our Mexican peso-denominated principal and interest payments into the U.S. dollar and swap Mexican variablefixed interest rates for U.S. fixed interest rates. From time to time, Sempra MexicoInfrastructure and its JVs may use other foreign currency derivatives to hedge exposures related to cash flows associated with revenues from contracts denominated in Mexican pesos that are indexed to the U.S. dollar.
We are also exposed to exchange rate movements at our Mexican subsidiaries and JVs, which have U.S. dollar-denominated cash balances, receivables, payables and debt (monetary assets and liabilities) that give rise to Mexican currency exchange rate movements for Mexican income tax purposes. They also have deferred income tax assets and liabilities denominated in the Mexican peso, which must be translated to U.S. dollars for financial reporting purposes. In addition, monetary assets and liabilities and certain nonmonetary assets and liabilities are adjusted for Mexican inflation for Mexican income tax purposes. We may utilize foreign currency derivatives as a means to manage the risk of exposure to significant fluctuations in our income tax expense and equity earnings from these impacts; however, we generally do not hedge our deferred income tax assets and liabilities or for inflation.
We also utilized foreign currency derivatives in 2020 to hedge exposure to fluctuations in the Peruvian sol and Chilean peso related to the sales of our operations in Peru and Chile, respectively.
The following table presents the net notional amounts of our foreign currency derivatives, excluding JVs.those in our equity method investments.
FOREIGN CURRENCY DERIVATIVES
(Dollars in millions)
 September 30, 2021December 31, 2020
 Notional amountMaturitiesNotional amountMaturities
Sempra:    
Cross-currency swaps$306 2021-2023$306 2021-2023
Other foreign currency derivatives130 2021-20231,764 2021-2022
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FOREIGN CURRENCY DERIVATIVES
(Dollars in millions)
 September 30, 2022December 31, 2021
 Notional amountMaturitiesNotional amountMaturities
Sempra:    
Cross-currency swaps$306 2022-2023$306 2022-2023
Other foreign currency derivatives135 2022-2024106 2022-2023
FINANCIAL STATEMENT PRESENTATION
The Condensed Consolidated Balance Sheets reflect the offsetting of net derivative positions and cash collateral with the same counterparty when a legal right of offset exists. The following tables provide the fair values of derivative instruments on the Condensed Consolidated Balance Sheets, including the amount of cash collateral receivables that were not offset because the cash collateral was in excess of liability positions.
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DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETSDERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETSDERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30, 2021 September 30, 2022
Other current assets(1)
Other long-term assetsOther current liabilitiesDeferred credits and other Other current assetsOther long-term assetsOther current liabilitiesDeferred credits and other
Sempra:Sempra:    Sempra:    
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:    Derivatives designated as hedging instruments:    
Interest rate instrumentsInterest rate instruments$5 $38 $— $— 
Foreign exchange instrumentsForeign exchange instruments— 1 (2)— 
Interest rate and foreign exchange instrumentsInterest rate and foreign exchange instruments$— $6 $(42)$(134)Interest rate and foreign exchange instruments— — (117)— 
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:    Derivatives not designated as hedging instruments:    
Commodity contracts not subject to rate recoveryCommodity contracts not subject to rate recovery252 19 (300)(21)Commodity contracts not subject to rate recovery200 103 (202)(102)
Associated offsetting commodity contractsAssociated offsetting commodity contracts(225)(15)225 15 Associated offsetting commodity contracts(190)(41)190 41 
Associated offsetting cash collateral— — 11 — 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery50 76 (52)(3)Commodity contracts subject to rate recovery31 25 (20)(8)
Associated offsetting commodity contractsAssociated offsetting commodity contracts(4)— 4 — Associated offsetting commodity contracts(3)(3)3 3 
Net amounts presented on the balance sheetNet amounts presented on the balance sheet73 86 (154)(143)Net amounts presented on the balance sheet43 123 (148)(66)
Additional cash collateral for commodity contracts
not subject to rate recovery
Additional cash collateral for commodity contracts
not subject to rate recovery
47 — — — 
Additional cash collateral for commodity contracts
not subject to rate recovery
80 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
Additional cash collateral for commodity contracts
subject to rate recovery
30 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
39 — — — 
Total(2)
$150 $86 $(154)$(143)
Total(1)
Total(1)
$162 $123 $(148)$(66)
SDG&E:SDG&E:    SDG&E:    
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:    Derivatives not designated as hedging instruments:    
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$47 $76 $(18)$(2)Commodity contracts subject to rate recovery$30 $25 $(3)$(7)
Associated offsetting commodity contractsAssociated offsetting commodity contracts(3)— 3 — Associated offsetting commodity contracts(3)(3)3 3 
Net amounts presented on the balance sheetNet amounts presented on the balance sheet44 76 (15)(2)Net amounts presented on the balance sheet27 22 — (4)
Additional cash collateral for commodity contracts
subject to rate recovery
Additional cash collateral for commodity contracts
subject to rate recovery
28 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
37 — — — 
Total(2)
$72 $76 $(15)$(2)
Total(1)
Total(1)
$64 $22 $— $(4)
SoCalGas:SoCalGas:    SoCalGas:    
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:    Derivatives not designated as hedging instruments:    
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$3 $— $(34)$(1)Commodity contracts subject to rate recovery$1 $— $(17)$(1)
Associated offsetting commodity contracts(1)— 1 — 
Net amounts presented on the balance sheetNet amounts presented on the balance sheet2 — (33)(1)Net amounts presented on the balance sheet1 — (17)(1)
Additional cash collateral for commodity contracts
subject to rate recovery
Additional cash collateral for commodity contracts
subject to rate recovery
2 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
2 — — — 
TotalTotal$4 $— $(33)$(1)Total$3 $— $(17)$(1)
(1)Included in Current Assets: Fixed-Price Contracts and Other Derivatives for SDG&E.
(2)    Normal purchase contracts previously measured at fair value are excluded.
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DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
December 31, 2020 December 31, 2021
Other current assets(1)
Other long-term assetsOther current liabilitiesDeferred credits and otherOther current assetsOther long-term assetsOther current liabilitiesDeferred credits and other
Sempra:Sempra:    Sempra:    
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:    Derivatives designated as hedging instruments:    
Interest rate instrumentsInterest rate instruments$— $6 $(6)$(2)
Foreign exchange instrumentsForeign exchange instruments1 1 (1)— 
Interest rate and foreign exchange instrumentsInterest rate and foreign exchange instruments$— $1 $(26)$(160)Interest rate and foreign exchange instruments— — (1)(130)
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:    Derivatives not designated as hedging instruments:    
Foreign exchange instruments24 — — — 
Commodity contracts not subject to rate recoveryCommodity contracts not subject to rate recovery82 17 (95)(16)Commodity contracts not subject to rate recovery136 11 (122)(10)
Associated offsetting commodity contractsAssociated offsetting commodity contracts(82)(13)82 13 Associated offsetting commodity contracts(93)(8)93 8 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery35 95 (35)(25)Commodity contracts subject to rate recovery38 52 (58)— 
Associated offsetting commodity contractsAssociated offsetting commodity contracts(2)— 2 — Associated offsetting commodity contracts(8)— 8 — 
Net amounts presented on the balance sheetNet amounts presented on the balance sheet57 100 (72)(188)Net amounts presented on the balance sheet74 62 (87)(134)
Additional cash collateral for commodity contracts
not subject to rate recovery
Additional cash collateral for commodity contracts
not subject to rate recovery
21 — — — 
Additional cash collateral for commodity contracts
not subject to rate recovery
58 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
Additional cash collateral for commodity contracts
subject to rate recovery
30 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
46 — — — 
Total(2)
$108 $100 $(72)$(188)
Total(1)
Total(1)
$178 $62 $(87)$(134)
SDG&E:SDG&E:    SDG&E:    
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:    Derivatives not designated as hedging instruments:    
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$32 $95 $(28)$(25)Commodity contracts subject to rate recovery$34 $52 $(20)$— 
Associated offsetting commodity contractsAssociated offsetting commodity contracts(1)— 1 — Associated offsetting commodity contracts(5)— 5 — 
Net amounts presented on the balance sheetNet amounts presented on the balance sheet31 95 (27)(25)Net amounts presented on the balance sheet29 52 (15)— 
Additional cash collateral for commodity contracts
subject to rate recovery
Additional cash collateral for commodity contracts
subject to rate recovery
24 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
28 — — — 
Total(2)
$55 $95 $(27)$(25)
Total(1)
Total(1)
$57 $52 $(15)$— 
SoCalGas:SoCalGas:    SoCalGas:    
Derivatives not designated as hedging instruments:Derivatives not designated as hedging instruments:    Derivatives not designated as hedging instruments:    
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$3 $— $(7)$— Commodity contracts subject to rate recovery$4 $— $(38)$— 
Associated offsetting commodity contractsAssociated offsetting commodity contracts(1)— 1 — Associated offsetting commodity contracts(3)— 3 — 
Net amounts presented on the balance sheetNet amounts presented on the balance sheet2 — (6)— Net amounts presented on the balance sheet1 — (35)— 
Additional cash collateral for commodity contracts
subject to rate recovery
Additional cash collateral for commodity contracts
subject to rate recovery
6 — — — 
Additional cash collateral for commodity contracts
subject to rate recovery
18 — — — 
TotalTotal$8 $— $(6)$— Total$19 $— $(35)$— 
(1)Included in Current Assets: Fixed-Price Contracts and Other Derivatives for SDG&E.
(2)    Normal purchase contracts previously measured at fair value are excluded.

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The following table includes the effects of derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Operations and in OCI and AOCI.
CASH FLOW HEDGE IMPACTSCASH FLOW HEDGE IMPACTSCASH FLOW HEDGE IMPACTS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Pretax gain (loss)
recognized in OCI		Pretax gain (loss) reclassified
from AOCI into earnings		Pretax gain (loss)
recognized in OCI		Pretax (loss) gain reclassified
from AOCI into earnings
Three months ended September 30, Three months ended September 30,Three months ended September 30, Three months ended September 30,
20212020Location20212020 20222021Location20222021
Sempra:Sempra:     Sempra:     
Interest rate instrumentsInterest rate instruments$7 $8 Interest Expense$1 $(3)Interest rate instruments$4 $7 Interest Expense$(2)$1 
Interest rate instrumentsInterest rate instruments3 25 
Equity Earnings(1)
(19)(5)Interest rate instruments68 3 
Equity Earnings(1)
(1)(19)
Foreign exchange instrumentsForeign exchange instruments5 (2)
Revenues: Energy-
Related Businesses
— — Foreign exchange instruments2 5 
Revenues: Energy-
Related Businesses
— — 
Foreign exchange instrumentsForeign exchange instruments3 (1)
Equity Earnings(1)
— — Foreign exchange instruments1 3 
Equity Earnings(1)
— — 
Interest rate and foreign
exchange instruments
Interest rate and foreign
exchange instruments
(3)6 Other (Expense) Income, Net(5)4 
Interest rate and foreign
exchange instruments
— (3)Other (Expense) Income, Net(3)(5)
TotalTotal$15 $36  $(23)$(4)Total$75 $15  $(6)$(23)
Nine months ended September 30, Nine months ended September 30, Nine months ended September 30, Nine months ended September 30,
20212020Location20212020 20222021Location20222021
Sempra:Sempra:     Sempra:     
Interest rate instrumentsInterest rate instruments$27 $(42)Interest Expense$— $(6)Interest rate instruments$39 $27 Interest Expense$(1)$— 
Interest rate instrumentsInterest rate instruments54 (175)
Equity Earnings(1)
(57)(8)Interest rate instruments212 54 
Equity Earnings(1)
(28)(57)
Foreign exchange instrumentsForeign exchange instruments7 14 
Revenues: Energy-
Related Businesses
(1)2 Foreign exchange instruments(1)7 
Revenues: Energy-
Related Businesses
2 (1)
Other (Expense) Income, Net— 1 Other (Expense) Income, Net(1)— 
Foreign exchange instrumentsForeign exchange instruments5 9 
Equity Earnings(1)
(1)2 Foreign exchange instruments(1)5 
Equity Earnings(1)
1 (1)
Interest rate and foreign
exchange instruments
Interest rate and foreign
exchange instruments
(2)(31)Interest Expense— (1)
Interest rate and foreign
exchange instruments
13 (2)Interest Expense1 — 
Other (Expense) Income, Net(4)(33)Other (Expense) Income, Net3 (4)
TotalTotal$91 $(225) $(63)$(43)Total$262 $91  $(23)$(63)
SoCalGas:SoCalGas:
Interest rate instrumentsInterest rate instruments$— $— Interest Expense$(1)$— 
(1)    Equity earnings at Sempra Mexicoour foreign equity method investees are recognized after tax.

For Sempra, we expect that net lossesgains before NCI of $104$24 million, which are net of income tax benefit,expense, that are currently recorded in AOCI (with net gains of $16 million attributable to NCI) related to cash flow hedges will be reclassified into earnings during the next 12 months as the hedged items affect earnings. SoCalGas expects that $1 million of losses, net of income tax benefit, that are currently recorded in AOCI related to cash flow hedges will be reclassified into earnings during the next 12 months as the hedged items affect earnings. Actual amounts ultimately reclassified into earnings depend on the interest rates in effect when derivative contracts mature.
For all forecasted transactions, the maximum remaining term over which we are hedging exposure to the variability of cash flows at September 30, 20212022 is approximately 1312 years for Sempra. The maximum remaining term for which we are hedging exposure to the variability of cash flows at our equity method investees is 1817 years.
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The following table summarizes the effects of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Operations.
UNDESIGNATED DERIVATIVE IMPACTSUNDESIGNATED DERIVATIVE IMPACTSUNDESIGNATED DERIVATIVE IMPACTS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
 Pretax (loss) gain on derivatives recognized in earnings  Pretax (loss) gain on derivatives recognized in earnings
 Three months ended
September 30,		Nine months ended
September 30,		  Three months ended September 30,Nine months ended
September 30,
Location2021202020212020 Location2022202120222021
Sempra:Sempra:    Sempra:    
Commodity contracts not subject
to rate recovery
Commodity contracts not subject
to rate recovery
Revenues: Energy-Related
Businesses
$(154)$(39)$(344)$25 
Commodity contracts not subject
to rate recovery
Revenues: Energy-Related
Businesses
$(227)$(154)$(455)$(344)
Commodity contracts subject
to rate recovery
Commodity contracts subject
to rate recovery
Cost of Natural Gas(26)— (24)(6)
Commodity contracts subject
to rate recovery
Cost of Natural Gas(11)(26)(15)(24)
Commodity contracts subject
to rate recovery
Commodity contracts subject
to rate recovery
Cost of Electric Fuel
and Purchased Power
8 41 51 41 
Commodity contracts subject
to rate recovery
Cost of Electric Fuel
and Purchased Power
16 8 10 51 
Foreign exchange instrumentsForeign exchange instrumentsOther (Expense) Income, Net2 15 (22)(97)Foreign exchange instrumentsOther (Expense) Income, Net— 2 — (22)
TotalTotal $(170)$17 $(339)$(37)Total $(222)$(170)$(460)$(339)
SDG&E:SDG&E:    SDG&E:    
Commodity contracts subject
to rate recovery
Commodity contracts subject
to rate recovery
Cost of Electric Fuel
and Purchased Power
$8 $41 $51 $41 
Commodity contracts subject
to rate recovery
Cost of Electric Fuel
and Purchased Power
$16 $8 $10 $51 
SoCalGas:SoCalGas:    SoCalGas:    
Commodity contracts subject
to rate recovery
Commodity contracts subject
to rate recovery
Cost of Natural Gas$(26)$— $(24)$(6)
Commodity contracts subject
to rate recovery
Cost of Natural Gas$(11)$(26)$(15)$(24)
CONTINGENT FEATURES
For Sempra, SDG&E and SoCalGas, certain of our derivative instruments contain credit limits which vary depending on our credit ratings. Generally, these provisions, if applicable, may reduce our credit limit if a specified credit rating agency reduces our ratings. In certain cases, if our credit ratings were to fall below investment grade, the counterparty to these derivative liability instruments could request immediate payment or demand immediate and ongoing full collateralization. 
For Sempra, the total fair value of this group of derivative instruments in a liability position at September 30, 20212022 and December 31, 20202021 was $63$22 million and $16$88 million, respectively. For SoCalGas, the total fair value of this group of derivative instruments in a liability position at September 30, 20212022 and December 31, 20202021 was $34$18 million and $6$36 million, respectively. SDG&E did not have this group of derivative instruments in a liability position at September 30, 2022 or December 31, 2021. At September 30, 2021,2022, if the credit ratings of Sempra or SoCalGas were reduced below investment grade, $63$22 million and $34$18 million, respectively, of additional assets could be required to be posted as collateral for these derivative contracts.
For Sempra, SDG&E and SoCalGas, some of our derivative contracts contain a provision that would permit the counterparty, in certain circumstances, to request adequate assurance of our performance under the contracts. Such additional assurance, if needed, is not material and is not included in the amounts above.
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NOTE 9. FAIR VALUE MEASUREMENTS
We discuss the valuation techniques and inputs we use to measure fair value and the definition of the three levels of the fair value hierarchy in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
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RECURRING FAIR VALUE MEASURES
The three tables below, by level within the fair value hierarchy, set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis at September 30, 20212022 and December 31, 2020.2021. We classify financial assets and liabilities in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair valuedfair-valued assets and liabilities, and their placement within the fair value hierarchy. We have not changed the valuation techniques or types of inputs we use to measure recurring fair value since December 31, 2020.2021.
The fair value of commodity derivative assets and liabilities is presented in accordance with our netting policy, as we discuss in Note 8 under “Financial Statement Presentation.”
The determination of fair values, shown in the tables below, incorporates various factors, including but not limited to, the credit standing of the counterparties involved and the impact of credit enhancements (such as cash deposits, letters of credit and priority interests).
Our financial assets and liabilities that were accounted for at fair value on a recurring basis in the tables below include the following:
▪Nuclear decommissioning trusts reflect the assets of SDG&E’s NDT, excluding cash balances, accounts receivable and accounts payable. A third-party trustee values the trust assets using prices from a pricing service based on a market approach. We validate these prices by comparison to prices from other independent data sources. Securities are valued using quoted prices listed on nationally recognized securities exchanges or based on closing prices reported in the active market in which the identical security is traded (Level 1). Other securities are valued based on yields that are currently available for comparable securities of issuers with similar credit ratings (Level 2).
▪For commodity contracts, interest rate derivatives and foreign exchange instruments, we primarily use a market or income approach with market participant assumptions to value these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable. We have exchange-traded derivatives that are valued based on quoted prices in active markets for the identical instruments (Level 1). We also may have other commodity derivatives that are valued using industry standard models that consider quoted forward prices for commodities, time value, current market and contractual prices for the underlying instruments, volatility factors, and other relevant economic measures (Level 2). Level 3 recurring items relate to CRRs and long-term, fixed-price electricity positions at SDG&E, as we discuss below in “Level 3 Information – SDG&E.”
▪Rabbi Trust investments include marketable securitiesshort-term investments that consist of money market and mutual funds that we value using a market approach based on closing prices reported in the active market in which the identical security is traded (Level 1). These investments in marketable securities were negligible at both September 30, 2021 and December 31, 2020.
▪As we discuss in Note 6, in July 2020, Sempra entered into a Support Agreement for the benefit of CFIN. We measure the Support Agreement, which includes a guarantee obligation, a put option and a call option, net of related guarantee fees, at fair value on a recurring basis. We use a discounted cash flow model to value the Support Agreement, net of related guarantee fees. Because some of the inputs that are significant to the valuation are less observable, the Support Agreement is classified as Level 3, as we describe below in “Level 3 Information – Sempra LNG.���Infrastructure.”
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RECURRING FAIR VALUE MEASURES – SEMPRARECURRING FAIR VALUE MEASURES – SEMPRARECURRING FAIR VALUE MEASURES – SEMPRA
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Fair value at September 30, 2021 Fair value at September 30, 2022
Level 1Level 2Level 3Total Level 1Level 2Level 3Total
Assets:Assets:    Assets:    
Nuclear decommissioning trusts:Nuclear decommissioning trusts:    Nuclear decommissioning trusts:    
Short-term investments, primarily cash equivalentsShort-term investments, primarily cash equivalents$16 $1 $— $17 
Equity securitiesEquity securities$350 $6 $— $356 Equity securities265 4 — 269 
Debt securities:Debt securities:    Debt securities:    
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
40 12 — 52 
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
21 13 — 34 
Municipal bondsMunicipal bonds— 320 — 320 Municipal bonds— 273 — 273 
Other securitiesOther securities— 270 — 270 Other securities— 226 — 226 
Total debt securitiesTotal debt securities40 602 — 642 Total debt securities21 512 — 533 
Total nuclear decommissioning trusts(1)
Total nuclear decommissioning trusts(1)
390 608 — 998 
Total nuclear decommissioning trusts(1)
302 517 — 819 
Interest rate and foreign exchange instruments— 6 — 6 
Short-term investments held in Rabbi TrustShort-term investments held in Rabbi Trust51 — — 51 
Interest rate instrumentsInterest rate instruments— 43 — 43 
Foreign exchange instrumentsForeign exchange instruments— 1 — 1 
Commodity contracts not subject to rate recoveryCommodity contracts not subject to rate recovery— 31 — 31 Commodity contracts not subject to rate recovery— 72 — 72 
Effect of netting and allocation of collateral(2)
Effect of netting and allocation of collateral(2)
47 — — 47 
Effect of netting and allocation of collateral(2)
80 — — 80 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery32 2 88 122 Commodity contracts subject to rate recovery16 1 33 50 
Effect of netting and allocation of collateral(2)
Effect of netting and allocation of collateral(2)
24 — 6 30 
Effect of netting and allocation of collateral(2)
33 — 6 39 
Support Agreement, net of related guarantee feesSupport Agreement, net of related guarantee fees— — 7 7 Support Agreement, net of related guarantee fees— — 16 16 
TotalTotal$493 $647 $101 $1,241 Total$482 $634 $55 $1,171 
Liabilities:Liabilities:    Liabilities:    
Interest rate and foreign exchange instruments$— $176 $— $176 
Commodity contracts not subject to rate recovery— 81 — 81 
Effect of netting and allocation of collateral(2)
— (11)— (11)
Commodity contracts subject to rate recovery— 35 16 51 
Support Agreement, net of related guarantee fees— — 2 2 
Total$— $281 $18 $299 
Fair value at December 31, 2020
Level 1Level 2Level 3Total
Assets:    
Nuclear decommissioning trusts:    
Equity securities$358 $6 $— $364 
Debt securities:   
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
41 24 — 65 
Municipal bonds— 326 — 326 
Other securities— 270 — 270 
Total debt securities41 620 — 661 
Total nuclear decommissioning trusts(1)
399 626 — 1,025 
Interest rate and foreign exchange instruments— 25 — 25 
Commodity contracts not subject to rate recovery— 4 — 4 
Effect of netting and allocation of collateral(2)
21 — — 21 
Commodity contracts subject to rate recovery6 1 121 128 
Effect of netting and allocation of collateral(2)
19 5 6 30 
Support Agreement, net of related guarantee fees— — 7 7 
Total$445 $661 $134 $1,240 
Liabilities:    
Foreign exchange instrumentsForeign exchange instruments$— $2 $— $2 
Interest rate and foreign exchange instrumentsInterest rate and foreign exchange instruments$— $186 $— $186 Interest rate and foreign exchange instruments— 117 — 117 
Commodity contracts not subject to rate recoveryCommodity contracts not subject to rate recovery— 16 — 16 Commodity contracts not subject to rate recovery— 73 — 73 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery— 6 52 58 Commodity contracts subject to rate recovery4 18 — 22 
Support Agreement, net of related guarantee fees— — 4 4 
TotalTotal$— $208 $56 $264 Total$4 $210 $— $214 
(1)    Excludes cash, cash equivalents and receivables (payables), net.
(2)    Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
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RECURRING FAIR VALUE MEASURES – SDG&E
RECURRING FAIR VALUE MEASURES – SEMPRA (CONTINUED)RECURRING FAIR VALUE MEASURES – SEMPRA (CONTINUED)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Fair value at September 30, 2021Fair value at December 31, 2021
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets:Assets:    Assets:
Nuclear decommissioning trusts:Nuclear decommissioning trusts:    Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalentsShort-term investments, primarily cash equivalents$13 $(10)$— $3 
Equity securitiesEquity securities$350 $6 $— $356 Equity securities358 6 — 364 
Debt securities:Debt securities:    Debt securities:
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
40 12 — 52 
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
48 8 — 56 
Municipal bondsMunicipal bonds— 320 — 320 Municipal bonds— 321 — 321 
Other securitiesOther securities— 270 — 270 Other securities— 260 — 260 
Total debt securitiesTotal debt securities40 602 — 642 Total debt securities48 589 — 637 
Total nuclear decommissioning trusts(1)
Total nuclear decommissioning trusts(1)
390 608 — 998 
Total nuclear decommissioning trusts(1)
419 585 — 1,004 
Short-term investments held in Rabbi TrustShort-term investments held in Rabbi Trust81 — — 81 
Interest rate instrumentsInterest rate instruments— 6 — 6 
Foreign exchange instrumentsForeign exchange instruments— 2 — 2 
Commodity contracts not subject to rate recoveryCommodity contracts not subject to rate recovery— 46 — 46 
Effect of netting and allocation of collateral(2)
Effect of netting and allocation of collateral(2)
58 — — 58 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery32 — 88 120 Commodity contracts subject to rate recovery12 1 69 82 
Effect of netting and allocation of collateral(2)
Effect of netting and allocation of collateral(2)
22 — 6 28 
Effect of netting and allocation of collateral(2)
31 9 6 46 
Support Agreement, net of related guarantee feesSupport Agreement, net of related guarantee fees— — 7 7 
TotalTotal$444 $608 $94 $1,146 Total$601 $649 $82 $1,332 
Liabilities:Liabilities:    Liabilities:
Interest rate instrumentsInterest rate instruments$— $8 $— $8 
Foreign exchange instrumentsForeign exchange instruments— 1 — 1 
Interest rate and foreign exchange instrumentsInterest rate and foreign exchange instruments— 131 — 131 
Commodity contracts not subject to rate recoveryCommodity contracts not subject to rate recovery— 31 — 31 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$— $1 $16 $17 Commodity contracts subject to rate recovery— 35 15 50 
TotalTotal$— $1 $16 $17 Total$— $206 $15 $221 
Fair value at December 31, 2020
Level 1Level 2Level 3Total
Assets:    
Nuclear decommissioning trusts:    
Equity securities$358 $6 $— $364 
Debt securities:    
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
41 24 — 65 
Municipal bonds— 326 — 326 
Other securities— 270 — 270 
Total debt securities41 620 — 661 
Total nuclear decommissioning trusts(1)
399 626 — 1,025 
Commodity contracts subject to rate recovery5 — 121 126 
Effect of netting and allocation of collateral(2)
18 — 6 24 
Total$422 $626 $127 $1,175 
Liabilities:    
Commodity contracts subject to rate recovery$— $— $52 $52 
Total$— $— $52 $52 
(1)    Excludes cash, cash equivalents and receivables (payables), net.
(2)    Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.

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RECURRING FAIR VALUE MEASURES – SOCALGAS
RECURRING FAIR VALUE MEASURES – SDG&ERECURRING FAIR VALUE MEASURES – SDG&E
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Fair value at September 30, 2021 Fair value at September 30, 2022
Level 1Level 2Level 3Total Level 1Level 2Level 3Total
Assets:Assets:    Assets:    
Nuclear decommissioning trusts:Nuclear decommissioning trusts:    
Short-term investments, primarily cash equivalentsShort-term investments, primarily cash equivalents$16 $1 $— $17 
Equity securitiesEquity securities265 4 — 269 
Debt securities:Debt securities:    
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
21 13 — 34 
Municipal bondsMunicipal bonds— 273 — 273 
Other securitiesOther securities— 226 — 226 
Total debt securitiesTotal debt securities21 512 — 533 
Total nuclear decommissioning trusts(1)
Total nuclear decommissioning trusts(1)
302 517 — 819 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$— $2 $— $2 Commodity contracts subject to rate recovery16 — 33 49 
Effect of netting and allocation of collateral(1)
2 — — 2 
Effect of netting and allocation of collateral(2)
Effect of netting and allocation of collateral(2)
31 — 6 37 
TotalTotal$2 $2 $— $4 Total$349 $517 $39 $905 
Liabilities:Liabilities:    Liabilities:    
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$— $34 $— $34 Commodity contracts subject to rate recovery$4 $— $— $4 
TotalTotal$— $34 $— $34 Total$4 $— $— $4 
Fair value at December 31, 2020 Fair value at December 31, 2021
Level 1Level 2Level 3Total Level 1Level 2Level 3Total
Assets:Assets:    Assets:    
Nuclear decommissioning trusts:Nuclear decommissioning trusts:    
Short-term investments, primarily cash equivalentsShort-term investments, primarily cash equivalents$13 $(10)$— $3 
Equity securitiesEquity securities358 6 — 364 
Debt securities:Debt securities:    
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
48 8 — 56 
Municipal bondsMunicipal bonds— 321 — 321 
Other securitiesOther securities— 260 — 260 
Total debt securitiesTotal debt securities48 589 — 637 
Total nuclear decommissioning trusts(1)
Total nuclear decommissioning trusts(1)
419 585 — 1,004 
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$1 $1 $— $2 Commodity contracts subject to rate recovery12 — 69 81 
Effect of netting and allocation of collateral(1)
1 5 — 6 
Effect of netting and allocation of collateral(2)
Effect of netting and allocation of collateral(2)
22 — 6 28 
TotalTotal$2 $6 $— $8 Total$453 $585 $75 $1,113 
Liabilities:Liabilities:    Liabilities:    
Commodity contracts subject to rate recoveryCommodity contracts subject to rate recovery$— $6 $— $6 Commodity contracts subject to rate recovery$— $— $15 $15 
TotalTotal$— $6 $— $6 Total$— $— $15 $15 
(1)    Excludes receivables (payables), net.
(2)    Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
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RECURRING FAIR VALUE MEASURES – SOCALGAS
(Dollars in millions)
 Fair value at September 30, 2022
 Level 1Level 2Level 3Total
Assets:    
Commodity contracts subject to rate recovery$— $1 $— $1 
Effect of netting and allocation of collateral(1)
2 — — 2 
Total$2 $1 $— $3 
Liabilities:    
Commodity contracts subject to rate recovery$— $18 $— $18 
Total$— $18 $— $18 
 Fair value at December 31, 2021
 Level 1Level 2Level 3Total
Assets:    
Commodity contracts subject to rate recovery$— $1 $— $1 
Effect of netting and allocation of collateral(1)
9 9 — 18 
Total$9 $10 $— $19 
Liabilities:    
Commodity contracts subject to rate recovery$— $35 $— $35 
Total$— $35 $— $35 
(1)    Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
Level 3 Information
SDG&E
The table below sets forth reconciliations of changes in the fair value of CRRs and long-term, fixed-price electricity positions classified as Level 3 in the fair value hierarchy for Sempra and SDG&E.
LEVEL 3 RECONCILIATIONS(1)
LEVEL 3 RECONCILIATIONS(1)
LEVEL 3 RECONCILIATIONS(1)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30, Three months ended September 30,
20212020 20222021
Balance at July 1Balance at July 1$80 $17 Balance at July 1$33 $80 
Realized and unrealized lossesRealized and unrealized losses(35)(4)Realized and unrealized losses(35)(35)
Allocated transmission instrumentsAllocated transmission instruments1 1 Allocated transmission instruments2 1 
SettlementsSettlements26 19 Settlements33 26 
Balance at September 30Balance at September 30$72 $33 Balance at September 30$33 $72 
Change in unrealized gains (losses) relating to instruments still held at September 30$9 $7 
Change in unrealized gains relating to instruments still held at September 30Change in unrealized gains relating to instruments still held at September 30$3 $9 
Nine months ended September 30,Nine months ended September 30,
2021202020222021
Balance at January 1Balance at January 1$69 $28 Balance at January 1$54 $69 
Realized and unrealized lossesRealized and unrealized losses(29)(18)Realized and unrealized losses(58)(29)
Allocated transmission instrumentsAllocated transmission instruments(1)2 Allocated transmission instruments(4)(1)
SettlementsSettlements33 21 Settlements41 33 
Balance at September 30Balance at September 30$72 $33 Balance at September 30$33 $72 
Change in unrealized gains (losses) relating to instruments still held at September 30$5 $(1)
Change in unrealized (losses) gains relating to instruments still held at September 30Change in unrealized (losses) gains relating to instruments still held at September 30$(15)$5 
(1)    Excludes the effect of the contractual ability to settle contracts under master netting agreements.

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Inputs used to determine the fair value of CRRs and fixed-price electricity positions are reviewed and compared with market conditions to determine reasonableness. SDG&E expects all costs related to these instruments to be recoverable through customer rates. As such, there is no impact to earnings from changes in the fair value of these instruments.
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CRRs are recorded at fair value based almost entirely on the most current auction prices published by the California ISO, an objective source. Annual auction prices are published once a year, typically in the middle of November, and are the basis for valuing CRRs settling in the following year. For the CRRs settling from January 1 to December 31, the auction price inputs, at a given location, were in the following ranges for the years indicated below:
CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS
Settlement yearPrice per MWhMedian price per MWh
2021$(1.81)to$14.11 $(0.12)
2020(3.77)to6.03 (1.58)

CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS
Settlement yearPrice per MWhMedian price per MWh
2022$(3.67)to$6.96 $(0.70)
2021(1.81)to14.11 (0.12)
The impact associated with discounting is negligible. Because these auction prices are a less observable input, these instruments are classified as Level 3. The fair value of these instruments is derived from auction price differences between two locations. Positive values between two locations represent expected future reductions in congestion costs, whereas negative values between two locations represent expected future charges. Valuation of our CRRs is sensitive to a change in auction price. If auction prices at one location increase (decrease) relative to another location, this could result in a significantly higher (lower) fair value measurement. We summarize CRR volumes in Note 8.
Long-term, fixed-price electricity positions that are valued using significant unobservable data are classified as Level 3 because the contract terms relate to a delivery location or tenor for which observable market rate information is not available. The fair value of the net electricity positions classified as Level 3 is derived from a discounted cash flow model using market electricity forward price inputs. The range and weighted-average price of these inputs at September 30 were as follows:
LONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTSLONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTSLONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTS
Settlement yearSettlement yearPrice per MWhWeighted-average
price per MWh		Settlement yearPrice per MWhWeighted-average
price per MWh
20222022$26.75 to$127.20 $68.50 
20212021$24.05 to$130.40 $57.36 202124.05 to130.40 57.36 
202019.45 to71.25 38.14 
A significant increase (decrease) in market electricity forward prices would result in a significantly higher (lower) fair value. We summarize long-term, fixed-price electricity position volumes in Note 8.
Realized gains and losses associated with CRRs and long-term, fixed-price electricity positions, which are recoverable in rates, are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. Because unrealized gains and losses are recorded as regulatory assets and liabilities, they do not affect earnings.
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Sempra LNGInfrastructure
The table below sets forth a reconciliationreconciliations of changes in the fair value of Sempra’s Support Agreement for the benefit of CFIN classified as Level 3 in the fair value hierarchy for Sempra.
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LEVEL 3 RECONCILIATION
LEVEL 3 RECONCILIATIONSLEVEL 3 RECONCILIATIONS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Three months ended September 30,
20212020 20222021
Balance at July 1Balance at July 1$4 $— Balance at July 1$16 $4 
Realized and unrealized gains(1)
Realized and unrealized gains(1)
3 7 
Realized and unrealized gains(1)
2 3 
SettlementsSettlements(2)(1)Settlements(2)(2)
Balance at September 30(2)
Balance at September 30(2)
$5 $6 
Balance at September 30(2)
$16 $5 
Change in unrealized gains (losses) relating to instruments still held at September 30$3 $6 
Change in unrealized gains relating to instruments still held at September 30Change in unrealized gains relating to instruments still held at September 30$2 $3 
Nine months ended September 30,Nine months ended September 30,
2021202020222021
Balance at January 1Balance at January 1$3 $— Balance at January 1$7 $3 
Realized and unrealized gains(1)
Realized and unrealized gains(1)
8 7 
Realized and unrealized gains(1)
16 8 
SettlementsSettlements(6)(1)Settlements(7)(6)
Balance at September 30(2)
Balance at September 30(2)
$5 $6 
Balance at September 30(2)
$16 $5 
Change in unrealized gains (losses) relating to instruments still held at September 30$7 $6 
Change in unrealized gains relating to instruments still held at September 30Change in unrealized gains relating to instruments still held at September 30$15 $7 
(1)    Net gains are included in Interest Income and net losses are included in Interest Expense on Sempra’s Condensed Consolidated StatementStatements of Operations.
(2)    Includes $7 million in Other Current Assets offset by $2 millionand $9 in Deferred Credits and Other Long-term Assets at September 30, 20212022 on Sempra’s Condensed Consolidated Balance Sheet.

The fair value of the Support Agreement, net of related guarantee fees, is based on a discounted cash flow model using a probability of default and survival methodology. Our estimate of fair value considers inputs such as third-party default rates, credit ratings, recovery rates, and risk-adjusted discount rates, which may be readily observable, market corroborated or generally unobservable inputs. Because CFIN’s credit rating and related default and survival rates are unobservable inputs that are significant to the valuation, the Support Agreement, net of related guarantee fees, is classified as Level 3. We assigned CFIN an internally developed credit rating of A3 and relied on default rate data published by Moody’s to assign a probability of default. A hypothetical change in the credit rating up or down one notch could result in a significant change in the fair value of the Support Agreement.
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Fair Value of Financial Instruments
The fair values of certain of our financial instruments (cash, accounts receivable, short-term amounts due to/from unconsolidated affiliates with original maturities of less than 90 days, dividends and accounts payable, short-term debt and customer deposits) approximate their carrying amounts because of the short-term nature of these instruments. Investments in life insurance contracts that we hold in support of our Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans are carried at cash surrender values, which represent the amount of cash that could be realized under the contracts. The following table provides the carrying amounts and fair values of certain other financial instruments that are not recorded at fair value on the Condensed Consolidated Balance Sheets.
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FAIR VALUE OF FINANCIAL INSTRUMENTSFAIR VALUE OF FINANCIAL INSTRUMENTSFAIR VALUE OF FINANCIAL INSTRUMENTS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30, 2021 Carrying
amount		Fair value
Carrying
amount		Fair value Level 1Level 2Level 3Total
Level 1Level 2Level 3TotalSeptember 30, 2022
Sempra:Sempra:     Sempra:     
Long-term amounts due from unconsolidated affiliates(1)
$687 $— $697 $— $697 
Long-term note receivable(1)
Long-term note receivable(1)
$314 $— $— $279 $279 
Long-term amounts due to unconsolidated affiliatesLong-term amounts due to unconsolidated affiliates328 — 347 — 347 Long-term amounts due to unconsolidated affiliates296 — 251 — 251 
Total long-term debt(2)
Total long-term debt(2)
21,966 — 24,288 — 24,288 
Total long-term debt(2)
23,790 — 20,288 — 20,288 
SDG&E:SDG&E:     SDG&E:     
Total long-term debt(3)
Total long-term debt(3)
$6,418 $— $7,263 $— $7,263 
Total long-term debt(3)
$7,800 $— $6,577 $— $6,577 
SoCalGas:SoCalGas:     SoCalGas:     
Total long-term debt(4)
Total long-term debt(4)
$4,759 $— $5,373 $— $5,373 
Total long-term debt(4)
$5,459 $— $4,789 $— $4,789 
December 31, 2020 December 31, 2021
Carrying
amount		Fair value
Level 1Level 2Level 3Total
Sempra:Sempra:     Sempra:     
Long-term amounts due from unconsolidated affiliates(1)
$786 $— $817 $— $817 
Long-term note receivable(1)
Long-term note receivable(1)
$300 $— $— $327 $327 
Long-term amounts due from unconsolidated affiliates(5)
Long-term amounts due from unconsolidated affiliates(5)
640 — 642 — 642 
Long-term amounts due to unconsolidated affiliatesLong-term amounts due to unconsolidated affiliates275 — 266 — 266 Long-term amounts due to unconsolidated affiliates287 — 295 — 295 
Total long-term debt(2)
Total long-term debt(2)
22,259 — 25,478 — 25,478 
Total long-term debt(2)
20,099 — 22,126 — 22,126 
SDG&E:SDG&E:     SDG&E:     
Total long-term debt(3)
Total long-term debt(3)
$6,253 $— $7,384 $— $7,384 
Total long-term debt(3)
$6,417 $— $7,236 $— $7,236 
SoCalGas:SoCalGas:     SoCalGas:     
Total long-term debt(4)
Total long-term debt(4)
$4,759 $— $5,655 $— $5,655 
Total long-term debt(4)
$4,759 $— $5,367 $— $5,367 
(1)    Before allowances for credit losses of $1 million$7 and $3 million$8 at September 30, 20212022 and December 31, 2020,2021, respectively. Includes $2 million and $3 million in Due From Unconsolidated Affiliates – CurrentExcludes unamortized transaction costs of $5 at September 30, 20212022 and December 31, 2020, respectively.2021.
(2)    Before reductions of unamortized discount and debt issuance costs of $266 million$287 and $268 million$260 at September 30, 20212022 and December 31, 2020,2021, respectively, and excluding finance lease obligations of $1,336 million$1,332 and $1,330 million$1,335 at September 30, 20212022 and December 31, 2020,2021, respectively.
(3)    Before reductions of unamortized discount and debt issuance costs of $62 million$72 and $52 million$61 at September 30, 20212022 and December 31, 2020,2021, respectively, and excluding finance lease obligations of $1,279 million$1,260 and $1,276 million$1,274 at September 30, 20212022 and December 31, 2020,2021, respectively.
(4)    Before reductions of unamortized discount and debt issuance costs of $37 million$41 and $40 million$36 at September 30, 20212022 and December 31, 2020,2021, respectively, and excluding finance lease obligations of $57 million$72 and $54 million$61 at September 30, 20212022 and December 31, 2020,2021, respectively.
(5)    Before allowances for credit losses of $1 at December 31, 2021. Includes $2 of accrued interest receivable at December 31, 2021 in Due From Unconsolidated Affiliates – Current.

We provide the fair values for the securities held in the NDT related to SONGS in Note 10.

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NOTE 10. SAN ONOFRE NUCLEAR GENERATING STATION
We provide below updates to ongoing matters related to SONGS, a nuclear generating facility near San Clemente, California that permanently ceased operations in June 2013, and in which SDG&E has a 20% ownership interest. We discuss SONGS further in Note 15 of the Notes to Consolidated Financial Statements in the Annual Report.
NUCLEAR DECOMMISSIONING AND FUNDING
As a result of Edison’s decision to permanently retire SONGS Units 2 and 3, Edison began the decommissioning phase of the plant. Major decommissioning work began in 2020. We expect the majority of the decommissioning work to take approximately 10 years. Decommissioning of Unit 1, removed from service in 1992, is largely complete. The remaining work for Unit 1 will be completed once Units 2 and 3 are dismantled and the spent fuel is removed from the site. The spent fuel is currently being stored on-site, until the DOE identifies a spent fuel storage facility and puts in place a program for the fuel’s disposal, as we discuss below. SDG&E is responsible for approximately 20% of the total decommissioning cost.
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The Samuel Lawrence Foundation filed a writ petition under the California Coastal Act in LA Superior Court in December 2019 seeking to invalidate the coastal development permit and to obtain injunctive relief to stop decommissioning work. The petition was denied in September 2021. In September 2020,December 2021, the foundationSamuel Lawrence Foundation filed anothera notice of appeal. In August 2022, the court dismissed the case based on the Samuel Lawrence Foundation’s request for dismissal, which finally resolves the writ petition under the California Coastal Act in LA Superior Court seeking to set aside the California Coastal Commission’s July 2020 approval of the inspection and maintenance plan for the SONGS’ canisters and to obtain injunctive relief to stop decommissioning work. A trial date for this petition has been set for April 2022. To date, decommissioningpetition. Decommissioning work haswas not been interrupted as a result of thesethis writ petitions.petition.
In accordance with state and federal requirements and regulations, SDG&E has assets held in the NDT to fund its share of decommissioning costs for SONGS Units 1, 2 and 3. The amountsAmounts that were collected in rates for SONGS’ decommissioning are invested in the NDT, which is comprised of externally managed trust funds. Amounts held by the NDT are invested in accordance with CPUC regulations. SDG&E classifies debt and equity securities held in the NDT as available-for-sale. The NDT assets are presented on the Sempra and SDG&E Condensed Consolidated Balance Sheets at fair value with the offsetting credits recorded in noncurrent Regulatory Liabilities.
Except for the use of funds for the planning of decommissioning activities or NDT administrative costs, CPUC approval is required for SDG&E to access the NDT assets to fund SONGS decommissioning costs for Units 2 and 3. In December 2020,2021, SDG&E received authorization from the CPUC to access NDT funds of up to $89$78 million for forecasted 20212022 costs.
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The following table shows the fair values and gross unrealized gains and losses for the securities held in the NDT.NDT on the Sempra and SDG&E Condensed Consolidated Balance Sheets. We provide additional fair value disclosures for the NDT in Note 9.
NUCLEAR DECOMMISSIONING TRUSTSNUCLEAR DECOMMISSIONING TRUSTSNUCLEAR DECOMMISSIONING TRUSTS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
CostGross
unrealized
gains		Gross
unrealized
losses		Estimated
fair
value		 CostGross
unrealized
gains		Gross
unrealized
losses		Estimated
fair
value
At September 30, 2021:    
September 30, 2022
Debt securities:Debt securities:    Debt securities:    
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies(1)
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies(1)
$52 $— $— $52 
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies(1)
$34 $2 $(2)$34 
Municipal bonds(2)
Municipal bonds(2)
307 14 (1)320 
Municipal bonds(2)
294 — (21)273 
Other securities(3)
Other securities(3)
261 10 (1)270 
Other securities(3)
253 1 (28)226 
Total debt securitiesTotal debt securities620 24 (2)642 Total debt securities581 3 (51)533 
Equity securitiesEquity securities103 255 (2)356 Equity securities110 172 (13)269 
Cash and cash equivalents7 — — 7 
Payables, net(2)— — (2)
Short-term investments, primarily cash equivalentsShort-term investments, primarily cash equivalents17 — — 17 
Receivables (payables), netReceivables (payables), net(3)— — (3)
TotalTotal$728 $279 $(4)$1,003 Total$705 $175 $(64)$816 
At December 31, 2020:    
December 31, 2021
Debt securities:Debt securities:    Debt securities:    
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agenciesDebt securities issued by the U.S. Treasury and other U.S. government corporations and agencies$64 $1 $— $65 Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies$56 $— $— $56 
Municipal bondsMunicipal bonds308 18 — 326 Municipal bonds309 13 (1)321 
Other securitiesOther securities253 17 — 270 Other securities255 7 (2)260 
Total debt securitiesTotal debt securities625 36 — 661 Total debt securities620 20 (3)637 
Equity securitiesEquity securities112 254 (2)364 Equity securities104 262 (2)364 
Cash and cash equivalents3 — — 3 
Payables, net(9)— — (9)
Short-term investments, primarily cash equivalentsShort-term investments, primarily cash equivalents3 — — 3 
Receivables (payables), netReceivables (payables), net8 — — 8 
TotalTotal$731 $290 $(2)$1,019 Total$735 $282 $(5)$1,012 
(1)    Maturity dates are 2021-2051.2023-2053.
(2)    Maturity dates are 2022-2056.
(3)    Maturity dates are 2021-2072.2022-2072.

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The following table shows the proceeds from sales of securities in the NDT and gross realized gains and losses on those sales.
SALES OF SECURITIES IN THE NDT
SALES OF SECURITIES IN THE NUCLEAR DECOMMISSIONING TRUSTSSALES OF SECURITIES IN THE NUCLEAR DECOMMISSIONING TRUSTS
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
Proceeds from salesProceeds from sales$187 $294 $729 $1,091 Proceeds from sales$133 $187 $530 $729 
Gross realized gainsGross realized gains9 9 48 108 Gross realized gains2 9 16 48 
Gross realized lossesGross realized losses(1)(2)(4)(13)Gross realized losses(3)(1)(14)(4)

Net unrealized gains and losses, as well as realized gains and losses that are reinvested in the NDT, are included in noncurrent Regulatory Liabilities on Sempra’s and SDG&E’s Condensed Consolidated Balance Sheets. We determine the cost of securities in the trusts on the basis of specific identification.
ASSET RETIREMENT OBLIGATION AND SPENT NUCLEAR FUEL
The present value of SDG&E’s ARO related to decommissioning costs for the SONGS unitsUnits 1, 2 and 3 was $551$550 million at September 30, 2021. That amount includes the cost to decommission Units 22022 and 3, and the remaining cost to complete the decommissioning of Unit 1, which is substantially complete. The ARO for all three units is based on a cost study prepared in 20172020 that is pending CPUC approval. The ARO for Units 2 and 3 reflects the accelerationapproval, which SDG&E expects to receive in 2023.
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Table of the start of decommissioning of these units as a result of the early closure of the plant. SDG&E’s share of total decommissioning costs in 2021 dollars is approximately $886 million.Contents
NUCLEAR INSURANCE
SDG&E and the other owners of SONGS have insurance to cover claims from nuclear liability incidents arising at SONGS. Currently, this insurance provides $450 million in coverage limits, the maximum amount available, including coverage for acts of terrorism. In addition, the Price-Anderson Act provides an additional $110 million of coverage. If a nuclear liability loss occurs at SONGS and exceeds the $450 million insurance limit, this additional coverage would be available to provide a total of $560 million in coverage limits per incident.
The SONGS co-ownersowners have nuclear property damage insurance of $130 million, which exceeds the minimum federal requirementsrequirement of $50 million. This insurance coverage is provided through NEIL. The NEIL policies have specific exclusions and limitations that can result in reduced coverage. Insured members as a group are subject to retrospective premium assessments to cover losses sustained by NEIL under all issued policies. SDG&E could be assessed up to $4.3$4.1 million of retrospective premiums based on overall member claims.
The nuclear property insurance program includes an industry aggregate loss limit for non-certified acts of terrorism (as defined by the Terrorism Risk Insurance Act) of $3.24 billion. This is the maximum amount that will be paid to insured members who suffer losses or damages from these non-certified terrorist acts.
NOTE 11. COMMITMENTS AND CONTINGENCIES
LEGAL PROCEEDINGS
We accrue losses for a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from amounts accrued, may exceed, and in some cases have exceeded, applicable insurance coverage and could materially adversely affect our business, cash flows, results of operations, financial condition, cash flows and/or prospects. Unless otherwise indicated, we are unable to reasonably estimate reasonably possible losses or a range of losses in excess of any amounts accrued.
At September 30, 2021,2022, loss contingency accruals for legal matters, including associated legal fees and regulatory matters related to the Leak, that are probable and estimable were $2,076$245 million for Sempra, including $1,998$171 million for SoCalGas. Amounts for Sempra and SoCalGas include $1,973$145 million for matters related to the Leak, which we discuss below.
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SoCalGas
Aliso Canyon Natural Gas Storage Facility Gas Leak
From October 23, 2015 through February 11, 2016, SoCalGas experienced a natural gas leak from one of the injection-and-withdrawal wells, SS25, at its Aliso Canyon natural gas storage facility in Los Angeles County. As described below, numerous lawsuits, investigations and regulatory proceedings have been initiated in response to the Leak, resulting in significant costs, which together with other Leak-related costs are discussed below in “Cost Estimates, Accounting Impact and Insurance.”
Civil Litigation – Litigation SubjectResolved. In September 2021, SoCalGas and Sempra entered into an agreement with counsel to Agreements to Resolve. As of November 1, 2021, 416resolve approximately 390 lawsuits including approximately 36,000 plaintiffs (the Individual Plaintiffs) were pending against SoCalGas and Sempra related to the Leak. All theseLeak (the Individual Plaintiff Litigation) for a payment of up to $1.8 billion.
These cases arewere coordinated before a single court in the LA Superior Court for pretrial management.
In November 2017, in the coordinated proceeding,management under a Third Amended Consolidated Master Case Complaint for Individual Actions was filed on behalf of the Individual Plaintiffs, through which their separate lawsuits are managed for pretrial purposes.in November 2017. The consolidated complaint asserts causes of action for negligence, negligence per se, private and public nuisance (continuing and permanent), trespass, inverse condemnation, strict liability, negligent and intentional infliction of emotional distress, fraudulent concealment, loss of consortium and wrongful death against SoCalGas and Sempra (the Individual Plaintiff Litigation). The complaint also asserted violations of Proposition 65, against SoCalGas and Sempra (excluding the Proposition 65 claims, the Individual Plaintiff Litigation).which were resolved in January 2022. The consolidated complaint seeks compensatory and punitive damages for personal injuries, lost wages and/or lost profits, property damage and diminution in property value, injunctive relief, costs of future medical monitoring, civil penalties, and attorneys’ fees.
In October 2018 and January 2019, complaints were filed on behalfThe agreement governing the settlement of 51 firefighters stationed near the Aliso Canyon natural gas storage facility who allege they were injured by exposure to chemicals released during the Leak. The complaints against SoCalGas and Sempra assert causes of actions for negligence, negligence per se, private and public nuisance (continuing and permanent), trespass, inverse condemnation, strict liability, negligent and intentional infliction of emotional distress, fraudulent concealment and loss of consortium. The complaints seek compensatory and punitive damages for personal injuries, lost wages and/or lost profits, property damage and diminution in property value, and attorneys’ fees. These complaints are included in the coordinated proceeding and the Individual Plaintiff Litigation.
On September 26, 2021, SoCalGas and Sempra entered into an agreement with counsel representing over 80% of the plaintiffs in the Individual Plaintiff Litigation to resolve the claims of all Individual Plaintiffs for a payment of up to $1.8 billion. The agreement is subject to acceptance by no fewer than roughly 97% of all plaintiffs in the Individual Plaintiff Litigation by June 1, 2022, although SoCalGas and Sempra have the right to waive such condition. The agreement, which requires each plaintiff who accepts aagrees to participate in the settlement to release all such plaintiff’s claims against SoCalGas, Sempra and their respective affiliates related to the Individual Plaintiff LitigationLeak and the Leak, provides that the settlement amount will be reduced based on the number of plaintiffs who do not accept. The agreement is further subject to LA Superior Court approval of the process to allocate payments among the plaintiffs and a stay of the Individual Plaintiff Litigation. As of October 31, 2022, over 99% of the Individual Plaintiffs had agreed to participate and submitted valid releases, and SoCalGas had paid $1.79 billion under the agreement. As of October 31, 2022, SoCalGas and Sempra had either not received or not accepted as valid releases from approximately 345 Individual Plaintiffs, approximately 86% of whom had not been located or had failed to respond, according to plaintiffs’ counsel. The plaintiffsIndividual Plaintiffs who do not agree to participate in the settlement (the Remaining Individual Plaintiffs) will be able to continue to pursue their claims.
In January 2017, 2 consolidated class action complaints were filed against SoCalGas and Sempra, 1 on behalf of a putative class of persons and businesses who own or lease real property within a five-mile radius of the well (the Property Class Action), and a second on behalf of a putative class of all persons and entities conducting business within five miles of the facility (the Business Class Action). The Property Class Action asserts claims for strict liability for ultra-hazardous activities, negligence, negligence per se, violation of the California Unfair Competition Law, trespass, permanent and continuing public and private nuisance, and inverse condemnation. The Business Class Action asserts a claim for violation of the California Unfair Competition Law. Both complaints seek compensatory, statutory and punitive damages, injunctive relief and attorneys’ fees.
On September 26, 2021, SoCalGas and Sempra entered into an agreement to settle a class action on behalf of persons and businesses who owned or leased real property within a five-mile radius of the Property Class Actionwell where the Leak occurred for a total amount of $40 million. If, following a fairness hearing at which any objections to the settlement will be heard,In April 2022, the LA Superior Court givesgave final approval of the settlement, the agreement provides for a release of SoCalGas, Sempra and their respective affiliates from all claims related to the Leak by all property class members who do not opt out of the class. Members of the property class who opt out of the settlement will have the right to pursue their claims on an individual basis.
On September 27, 2021, SoCalGas and Sempra entered into an agreement to settle the individual claims of the named plaintiffs in the Business Class Action for a total amount of $100,000 in exchange for a dismissal and release of SoCalGas, Sempra and their respective affiliates from all claims related to the Leak.
The Third Amended Consolidated Master Case Complaint for Individual Actions includes claims for violation of Proposition 65 seeking penalties for alleged violation of requirements to warn about certain chemical exposures as a result of the Leak. On November 4, 2021, SoCalGas entered into an agreement to settle these claims for a payment of approximately $2 million; in
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addition, SoCalGas agreed to implement certain measures to reduce emissions at the Aliso Canyon natural gas storage facility and to provide warnings to residents if benzene measured at the facility’s fence line exceeds certain levels. The settlement of these claims requires the approval of the LA Superior Court.
An adverse ruling in any of the lawsuits in the Individual Plaintiff Litigation filed by plaintiffs who do not agree to settle, any lawsuits filed by property class members who opt out of the Property Class Action settlement or by members of the putative Business Class Action, or the Proposition 65 claims described above if that settlement is not approved by the court, could have a material adverse effect on SoCalGas’ and Sempra’s cash flows, financial condition and results of operations. In addition, there can be no assurance that the conditions to resolve the Individual Plaintiff Litigation will be satisfied or that the LA Superior Court will approve the settlement for the Property Class Action.settlement.
In addition, a federal securities class action alleging violationOctober 2018 and October 2020, complaints on behalf of the federal securities laws was filed against Sempra and certain of its officers in July 2017 in the U.S. District Court for the Southern District of California. In March 2018, the court dismissed the action with prejudice, and in February 2021, the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal. The time for appeal has passed and, as a result, this represents the final judgment in this proceeding.
Civil Litigation – Unresolved Litigation. Fivefive property developers (the Developer Plaintiffs) were filed complaints in July and October of 2018 against SoCalGas and Sempra allegingin connection with the Leak. The complaints alleged causes of action for strict liability, negligence per se, negligence, negligent interference, continuing nuisance, permanent nuisance, inverse condemnation and violation of the California
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Unfair Competition Law as well as claims for negligence against certain directors of SoCalGas. The complaints seekand California Public Utilities Code section 2106, and sought compensatory, statutory and punitive damages, injunctive relief and attorneys’ fees. The LA Superior Court has scheduled a trial for one or moreIn January 2022 and March 2022, SoCalGas and Sempra settled the claims of four of the developers in February 2022.Developer Plaintiffs and their claims were dismissed. In August 2022, SoCalGas and Sempra settled the claims of the fifth Developer Plaintiff and its claims were dismissed.
NaNLitigation – Unresolved. Four shareholder derivative actions were filed alleging breach of fiduciary duties against certain officers and certain directors of Sempra and/or SoCalGas. Three of the four actions were joined in an Amended Consolidated Shareholder Derivative Complaint filed in the coordinated proceeding in the LA Superior Court, which was dismissed with prejudice in January 2021. The plaintiffs have appealed this dismissal. In the remaining fourth action, the plaintiffs filed a notice of appeal. The remaining action was also dismissed but plaintiffs were given leavean amended complaint in the coordinated proceeding in June 2022.
In addition, the Remaining Individual Plaintiffs referred to amendabove will be able to continue to pursue their complaint.claims.
Regulatory Proceedings.Proceedings – Subject to Agreements to Resolve. In January 2016, CalGEM and the CPUC directed an independent analysis of the technical root cause of the Leak to be conducted by Blade. In May 2019, Blade released its report, which concluded that the Leak was caused by a failure of the production casing of the well due to corrosion and that attempts to stop the Leak were not effectively conducted, but did not identify any instances of non-compliance by SoCalGas. Blade concluded that SoCalGas’ compliance activities conducted prior to the Leak did not find indications of a casing integrity issue. Blade opined, however, that there were measures, none of which were required by gas storage regulations at the time, that could have been taken to aid in the early identification of corrosion and that, in Blade’s opinion, would have prevented or mitigated the Leak. The report also identified well safety practices and regulations that have since been adopted by CalGEM and implemented by SoCalGas.
In June 2019, the CPUC opened an OII (the Leak OII) to investigate and consider, penalties against SoCalGas for the Leak, which it later bifurcated into two phases. The first phase will consider whether SoCalGas violated California Public Utilities Code Section 451 oramong other laws, CPUC orders or decisions, rules or requirements, whether SoCalGas engaged in unreasonable and/or imprudent practices with respect to its operation and maintenance of the Aliso Canyon natural gas storage facility or its related record-keeping practices, whether SoCalGas cooperated sufficiently with the Safety Enforcement Division (SED) of the CPUC and Blade during the pre-formal investigation, and whether any of the mitigation measures proposed by Blade should be implemented to the extent not already done. The SED, based largely on the Blade report, has alleged a total of 324 violations in the first phase, asserting that SoCalGas violated California Public Utilities Code Section 451 and failed to cooperate in the investigation and to keep proper records. Hearings on a subset of issues began in March 2021. The second phase will considerthings, whether SoCalGas should be sanctioned for the Leak and what damages, fines or other penalties, if any, should be imposed for any violations, unreasonable or imprudent practices or failure to cooperate sufficiently cooperate with the SED, as determined by the CPUC in the first phase. In addition, the second phase willwell as to determine the amountsamount of various costs incurred by SoCalGas and other parties in connection with the Leak and the ratemaking treatment or other disposition of such costs, which could result in little or no recovery of such costs by SoCalGas. In October 2022, SoCalGas has engaged inexecuted a settlement discussionsagreement with SED and the SED in connectionPublic Advocates Office at the CPUC to resolve all aspects of the Leak OII. The settlement agreement provides for financial penalties, certain costs that SoCalGas will reimburse, a violation of California Public Utilities Code section 451, and costs previously incurred by SoCalGas for which it will not seek recovery from ratepayers, among other provisions. The settlement agreement was filed with this proceeding.and is subject to approval by the CPUC.
Regulatory Proceedings – Unresolved.In February 2017, the CPUC opened a proceeding pursuant to the SB 380 OII to determine the feasibility of minimizing or eliminating the use of the Aliso Canyon natural gas storage facility while still maintaining energy and electric reliability for the region, but excluding issues with respect to air quality, public health, causation, culpability or cost responsibility regarding the Leak. The first phase of the proceeding established a framework for the hydraulic, production cost and economic modeling assumptions for the potential reduction in usage or elimination of the Aliso Canyon natural gas storage facility. Phase 2 of the proceeding, which isfacility, as well as evaluating the impacts of reducing or eliminating the Aliso Canyon natural gas storage facility using the established framework and models, began in the first quarter of 2019. In December 2019, the CPUC added a thirdmodels. The next phase of the proceeding and engagedincluded engaging a consultant who is analyzingto analyze alternative means for meeting or avoiding the demand for the facility’s services if it were eliminated in either the 2027 or 2035 timeframe. In July 2021, the CPUC combined Phase 2timeframe, and Phase 3 and
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modified the scope of Phase 3 to also address potential implementation of alternatives to the Aliso Canyon natural gas storage facility if the CPUC determines that the Aliso Canyon natural gas storage facility should be permanently closed. The CPUC also added all California IOUs as parties to the proceeding and encouraged all load serving entities in the Los Angeles Basin to join the proceeding.
In November 2020,2021, the CPUC issued a decision on the interim range of gas inventory levels at the Aliso Canyon natural gas storage facility, setting the interim range between 0 Bcf and 34 Bcf. In November 2021, the CPUC issued a decision approving a newan interim range of gas inventory levels of up to 41.16 Bcf. The CPUC may issue future changes to this interim range of authorized gas inventory levels before issuing a final inventory determination within the SB 380 OII proceeding.
At September 30, 2021,2022, the Aliso Canyon natural gas storage facility had a net book value of $863$923 million. If the Aliso Canyon natural gas storage facility were to be permanently closed or if future cash flows from its operation were otherwise insufficient to recover its carrying value, we may record an impairment of the facility, which could be material, incur materially higher than expected operating costs and/or be required to make material additional capital expenditures (any or all of which may not be recoverable in rates), and natural gas reliability and electric generation could be jeopardized. Any such outcome could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition and cash flows.
Cost Estimate, Insurance and Accounting Impact and Insurance. Other Impacts.SoCalGas has incurred significant costs related to the Leak, primarily to defend against and settle civil and criminal litigation and regulatory proceedings arising from the Leak; for temporary relocation of community residents; to control the well and stop the Leak; to mitigate the natural gas released; to purchase natural gas to replace what was lost through the Leak; to defend against and, in certain cases, settle, civil and criminal litigation arising from the Leak; to pay the costs of the government-ordered response to the Leak, including the costs for Blade to conduct thea root cause analysis described above;analysis; to respond to various government and agency investigations regarding the Leak; and to comply with increased regulation imposed as a result of the Leak. At September 30, 2021,2022, SoCalGas estimates these costs related to the Leak are $3,199$3,485 million (the cost estimate), which includesincluding $1,279 million of costs recovered or probablerecoverable from insurance of recovery from insurance. This cost estimate may increase significantlywhich $1,269 million of insurance proceeds had been received by SoCalGas through September 30, 2022. Other than insurance for directors’ and officers’ liability, we have exhausted all of our available insurance for this matter. At September 30, 2022, $10 million is recorded as more information becomes available. A portionInsurance Receivable for Aliso Canyon Costs, $145 million of the cost estimate has been paid, and $1,976 million is accrued asin Reserve for Aliso Canyon Costs at September 30, 2021and $4 million of the cost estimate is accrued in Deferred Credits and Other on SoCalGas’ and Sempra’s Condensed Consolidated Balance Sheets.
In the first quarter
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SoCalGas recorded $277total charges of $122 million in costs, inclusive of estimated legal costs, related to settlement discussions in connection with civil litigation described above. Of this amount, $177 million was recorded in Insurance Receivable for Aliso Canyon Costs on the SoCalGas and Sempra Condensed Consolidated Balance Sheets and $100 million ($72101 million after tax) was recorded in Aliso Canyon Litigation and Regulatory Matters on the SoCalGas and Sempra Condensed Consolidated Statements of Operations. In the third quarter of 2020, SoCalGas recorded an additional charge of $27$259 million ($22199 million after tax) related toin the OII described above in “Regulatory Proceedings.”
As a result of entering into thethree months and nine months ended September 2630, 2022, respectively, and 27, 2021 agreements described above, SoCalGas recorded an additional charge of $1.57 billion ($1.13 billion after tax) in the third quarter ofthree months and nine months ended September 30, 2021 in Aliso Canyon Litigation and Regulatory Matters on the SoCalGas and Sempra Condensed Consolidated Statements of Operations. Sempra has elected to make equity contributions to SoCalGas that are sufficient to maintain SoCalGas’ approved capital structure in connection with the accrualsOperations related to these agreements. In connection with this election,the litigation and regulatory proceedings that we describe above. These charges are included in September 2021, Sempra made an initial equity contribution of $800 million to SoCalGas.the cost estimate.
Except for the amounts paid or estimated to settle certain legal and regulatory matters as described above, the cost estimate does not include any amounts necessary to resolve the matters that we describe above in “Civil Litigation“Litigation – Unresolved Litigation”Unresolved” and “Regulatory Proceedings.Proceedings – Unresolved,” threatened litigation, other potential litigation or other costs, in each case to the extent it is not possible to predict at this time the outcome of these actions or reasonably estimate the possible costs or a range of possible costs for damages, restitution, civil or administrative fines or penalties, defense, settlement or other costs or remedies that may be imposed or incurred. The cost estimate also does not include certain other costs incurred by Sempra associated with defending against shareholder derivative lawsuits and other potential costs that we currently do not anticipate incurring or that we cannot reasonably estimate. Further, we are not able to reasonably estimate the possible loss or a range of possible losses in excess of the amounts accrued. TheseThe costs or losses not included in the cost estimate could be significant andsignificant.
An adverse outcome with respect to (i) any lawsuits by the Remaining Individual Plaintiffs, (ii) the unresolved shareholder derivative actions, (iii) threatened or other potential litigation related to the Leak, (iv) the Leak OII if approval of the negotiated settlement is not subsequently obtained, or (v) the unresolved proceeding pursuant to the SB 380 OII, could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows financial condition and results of operations.and/or prospects.
We have received insurance payments for many of the categories of costs included in the cost estimate, including temporary relocation and associated processing costs, control-of-well expenses, costs of the government-ordered response to the Leak, certain legal costs and lost gas. At September 30, 2021, we recorded the expected recovery of the cost estimate related to the Leak of $414 million as Insurance Receivable for Aliso Canyon Costs on SoCalGas’ and Sempra’s Condensed Consolidated Balance Sheets. This amount is exclusive of insurance retentions and $865 million of insurance proceeds we received through September 30, 2021. We intend to pursue the full extent of our insurance coverage for the costs we have incurred. Other than insurance for certain future defense costs we may incur as well as directors’ and officers’ liability, we have exhausted all of our insurance in this matter. We continue to pursue other sources of insurance coverage for costs related to this matter, but we may
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not be successful in obtaining additional insurance recovery for any of these costs. If we are not able to secure additional insurance recovery, if any costs we have recorded as an insurance receivable are not collected, if there are delays in receiving insurance recoveries, or if the insurance recoveries are subject to income taxes while the associated costs are not tax deductible, such amounts, which could be significant, could have a material adverse effect on SoCalGas’ and Sempra’s cash flows, financial condition and results of operations.
Sempra MexicoInfrastructure
Energía Costa Azul
We describe below certain land and customer disputes and permit challenges affecting our ECA Regas Facility. Certain of these land disputes involve land on which portions of the ECA LNG liquefaction facilities are proposed to be situated or on which portions of the ECA Regas Facility and ourthat would be necessary for the operation of the proposed ECA LNG liquefaction projects.facilities are situated. One or more unfavorable final decisions on these disputes or challenges could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, cash flows, financial condition, results of operations, financial condition, cash flows and/or prospects.
Land Disputes.Disputes – Unresolved. IEnovaSempra Infrastructure has been engaged in a long-running land dispute relating to property adjacent to its ECA Regas Facility that allegedly overlaps with land owned by the ECA Regas Facility (the facility, however, is not situated on the land that is the subject of this dispute), as follows:
▪A claimant to the adjacent property filed complaints in the federal Agrarian Court challenging the refusal of SEDATU in 2006 to issue title to him for the disputed property. In November 2013, the federal Agrarian Court ordered that SEDATU issue the requested title to the claimant and cause it to be registered. Both SEDATU and IEnovaSempra Infrastructure challenged the ruling due to lack of notification of the underlying process. In May 2019, a federal court in Mexico reversed the ruling and ordered a retrial, which is pending resolution.
▪In a separate proceeding, the claimant filed suit to reinitiate an administrative procedure at SEDATU to obtain the property title that was previously dismissed. In April 2021, the Agrarian Court ordered that the administrative procedure be restarted. The proceeding in the Agrarian Court has concluded; however, the administrative procedure at SEDATU may continue if SEDATU decides to reopen the matter.
In addition, four cases involving two adjacent areas of real property on which part of the ECA Regas Facility is situated, each brought by a single plaintiff or her descendants, remain pending against the facility, as follows:
▪The first disputed area is subject to a claim in the federal Agrarian Court that has been ongoing since 2006, in which the plaintiff seeks to annul the property title for a portion of the land on which the ECA Regas Facility is situated and to obtain possession of a different parcel that allegedly overlaps with the site of the ECA Regas Facility. The proceeding, which seeks an order that SEDATU annul the ECA Regas Facility’s competing property title, was initiated in 2006 and, in July 2021, a decision was issued in favor of the ECA Regas Facility. We expectThe plaintiff appealed, and in February 2022, the appellate court confirmed the ruling in favor of the ECA Regas Facility and dismissed the appeal. The plaintiff may appeal.filed a federal appeal against the appellate court ruling. A ruling from the Federal Collegiate Circuit Court is pending.
▪The second disputed area is onea parcel adjacent to the ECA Regas Facility that allegedly overlaps with land on which the ECA Regas Facility is situated, which is subject to a claim in the federal Agrarian Court and two claims in Mexican civil courts. The ECA Regas Facility first bought the property from the federal government in 2003; however, to resolve an ownership controversy, in 2008, the ECA Regas Facility boughtreached a financial settlement with the property a second time in 2008 from the plaintiff.plaintiff to eliminate an adverse claim to its title. Nevertheless, the plaintiff sued in 2013 for the nullity of both titles. The Agrarian Court ruled in favor of the plaintiff in May 2021, nullifying the first property title. IEnovaSempra Infrastructure appealed the ruling in July 2021, which is pending resolution.2021. In May 2022, Sempra Infrastructure won the appeal and the plaintiff’s claims were dismissed. The ECA Regas Facility continues to hold the second
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property title to the land. The two civil court proceedings, which seek to invalidate the contract by which the ECA Regas Facility purchased for the second time the applicable parcel of land on which the ECA Regas Facility is situated on the grounds that the purchase price was allegedly unfair, are progressing at different stages. In the first civil case, initiated in 2013, the court ruled in favor of the ECA Regas Facility, and the final decision was affirmed on a federal appeal. The descendants of the same plaintiff filed the second civil case in 2019, which was dismissed by the court. However, the dismissal has been appealed.
Certain of these land disputes involve land onappealed, which portions ofis pending the ECA LNG liquefaction facilities, including ECA LNG Phase 1 currently under construction, are proposed to be situated or on which portions ofappellate court’s ruling. In April 2022, the ECA Regas Facility that would be necessary forentered into a settlement agreement with the operationplaintiff, whereby the plaintiff has agreed to recognize the ECA Regas Facility as the sole owner of the proposedproperty and waive any current or future rights over the property, or any other properties related to the ECA LNG liquefaction facilities are situated.Regas Facility. The settlement agreement in the first civil case has been approved by the court and the settlement agreement in the second civil case is pending court approval.
Environmental and Social Impact Permits.Permits – Unresolved. Several administrative challenges are pending before Mexico’s Secretariat of Environment and Natural Resources (the Mexican environmental protection agency) and Federal Tax and Administrative Courts, seeking revocation of the environmental impact authorization issued to the ECA Regas Facility in 2003. These cases generally allege that the conditions and mitigation measures in the environmental impact authorization are inadequate and challenge findings that the activities of the terminal are consistent with regional development guidelines.
In 2018 and 2021, three related claimants filed separate challenges in the federal district court in Ensenada, Baja California in relation to the environmental and social impact permits issued by each of ASEA and SENER to ECA LNG authorizing natural gas liquefaction activities at the ECA Regas Facility, as follows:
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▪In the first case, the court issued a provisional injunction in September 2018. In December 2018, ASEA approved modifications to the environmental permit that facilitate the development of the proposed natural gas liquefaction facility in two phases. In May 2019, the court canceled the provisional injunction. The claimant appealed the court’s decision canceling the injunction but was not successful. The claimant’s underlying challenge to the permits remains pending.
▪In the second case, the initial request for a provisional injunction was denied. That decision was reversed on appeal in January 2020, resulting in the issuance of a new injunction against the permits that were issued by ASEA and SENER. This injunction has uncertain application absent clarification by the court; therefore,court. The claimants petitioned the court to rule that construction of natural gas liquefaction facilities violated the injunction, and in February 2022, the court ruled in favor of the ECA Regas Facility, holding that the natural gas liquefaction activities did not violate the injunction. The claimants have not been affected.appealed this ruling.
▪In the third case, a group of residents filed a complaint in June 2021 against various federal and state authorities alleging deficiencies in the public consultation process for the issuance of the permits. The caserequest for an initial injunction was denied and the claimants have appealed, which is awaiting proceedings.pending the appellate court’s ruling.
Customer Dispute.Dispute – Resolved. In May 2020, the two third-party capacity customers at the ECA Regas Facility, Shell Mexico and Gazprom, asserted that a 2019 update of the general terms and conditions for service at the facility, as approved by the CRE, resulted in a breach of contract by IEnovaSempra Infrastructure and a force majeure event. Citing these circumstances, the customers subsequently stopped making payments of amounts due under their respective LNG storage and regasification agreements. IEnova has rejected the customers’ assertions and has drawn on the customers’ letters of credit provided as payment security. The parties engaged in discussions under the applicable contractual dispute resolution procedures without coming to a mutually acceptable resolution. In July 2020, Shell Mexico submitted a request for arbitration of the dispute, and although Gazprom has joined the proceeding, and a hearing was held in October 2021. The International Court of Arbitration issued a final, non-appealable decision in April 2022 in favor of Sempra Infrastructure dismissing all claims and confirming the contracts remain in force. In August 2022, the International Court of Arbitration issued an additional decision dismissing a request by Shell Mexico and Gazprom has since replenishedto consider additional arguments.
Citing the amounts drawn onalleged breach, Shell Mexico stopped making payments under its letterLNG storage and regasification agreement. Due to nonpayment, Sempra Infrastructure drew against Shell Mexico’s letters of credit provided as payment security until they were fully exhausted in March 2022. In September 2022, Shell Mexico paid its invoices from March 2022 through August 2022, bringing its account to current, resumed paying invoices as they come due, and has resumedrenewed its letters of credit. Although Gazprom had previously been making regular monthly payments under its LNG storage and regasification agreement. As a consequence, IEnova is not currently drawing onagreement, Sempra Infrastructure drew against and fully exhausted Gazprom’s letterletters of credit but expectsin April 2022 due to continueGazprom’s non-renewal of such letters of credit as required under the agreement. Gazprom did not pay its invoices from March 2022 through July 2022, so funds drawn from the letters of credit were used to draw on Shell Mexico’s letterfully offset such nonpayment. In September 2022, Gazprom paid its August 2022 invoice, bringing its account to current, and resumed paying invoices as they come due. Subsequent invoices, if not paid by Gazprom, will be offset by funds drawn from the letters of credit. IEnova intends to avail itself of its available claims, defenses, rights and remedies in the arbitration proceeding, including seeking dismissal of the customers’ claims.
In addition to the arbitration proceeding, Shell Mexico also filed a constitutional challenge toclaims against the CRE’s approval of the update to the general terms and conditions for service at the facility and an additional constitutional claim against the issuance of the liquefaction permit. Shell Mexico’s request to stay the CRE’s approval offor an injunction against the general terms and conditions was denied, in October 2020 and the ruling was upheld on appeal. A decision on the merits is pending. The claim regardingrequest for an injunction against the liquefaction permit issuance was denied, and the decision was vacated and remanded on appeal to the First District Court in March 2021 and upheld on appeal. A hearingAdministrative Matters, which again denied the injunction. The case on the meritsinjunction request was then heard again by the appellate court and was denied, making the decision final.
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One or more unfavorable final decisions on these disputes or challenges could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, cash flows, financial condition, results of operations and/or prospects.
Sonora Pipeline
Guaymas-El Oro Segment.Segment – Unresolved. IEnova’sSempra Infrastructure’s Sonora natural gas pipeline consists of two segments, the Sasabe-Puerto Libertad-Guaymas segment and the Guaymas-El Oro segment. Each segment has its own service agreement with the CFE. In 2015, the Yaqui tribe, with the exception of some members living in the Bácum community, granted its consent and a right-of-way easement agreement for the construction of the Guaymas-El Oro segment of the Sonora natural gas pipeline that crosses its territory. Representatives of the Bácum community filed a legal challenge in Mexican federal court demanding the right to withhold consent for the project, the stoppage of work in the Yaqui territory and damages. In 2016, the judge granted a suspension order that prohibited the construction of such segment through the Bácum community territory. Because the pipeline does not pass through the Bácum community, IEnovaSempra Infrastructure did not believe the 2016 suspension order prohibited construction in the remainder of the Yaqui territory. Construction of the Guaymas-El Oro segment was completed, and commercial operations began in May 2017.
Following the start of commercial operations of the Guaymas-El Oro segment, IEnovaSempra Infrastructure reported damage to the Guaymas-El Oro segment of the Sonora pipeline in the Yaqui territory that has made that section inoperable since August 2017 and, as a result, IEnovaSempra Infrastructure declared a force majeure event. In 2017, an appellate court ruled that the scope of the 2016 suspension order encompassed the wider Yaqui territory, which has prevented IEnovaSempra Infrastructure from making repairs to put the pipeline back in service. In July 2019, a federal district court ruled in favor of IEnovaSempra Infrastructure and held that the Yaqui tribe was properly consulted and that consent from the Yaqui tribe was properly received. Representatives of the Bácum community appealed this decision, causing the suspension order preventing IEnovaSempra Infrastructure from repairing the damage to the Guaymas-El Oro segment of the Sonora pipeline in the Yaqui territory to remain in place until the appeals process is exhausted. In December 2021, the court of appeals referred the matter to Mexico’s Supreme Court. In June 2022, the Supreme Court remanded the case back to the court of appeals for final resolution.
IEnovaSempra Infrastructure exercised its rights under the contract, which included seeking force majeure payments for the two-year period such force majeure payments were required to be made, which ended in August 2019.
In July 2019, the CFE filed a request for arbitration generally to nullify certain contract terms that provide for fixed capacity payments in instances of force majeure and made a demand for substantial damages in connection with the force majeure event. In September 2019, the arbitration process ended when IEnovaSempra Infrastructure and the CFE reached an agreement to restart natural gas
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transportation service on the earlier of completion of repair of the damaged pipeline or January 15, 2020, and to modify the tariff structure and extend the term of the contract by 10 years. Subsequently, IEnovaSempra Infrastructure and the CFE agreed to extend the service start date multiple times, most recently to March 14,November 30, 2022. Under the revised agreement, the CFE will resume making payments only when the damaged section of the Guaymas-El Oro segment of the Sonora pipeline is repaired. If the pipeline is not repaired by March 14, 2022, andor the parties do not agree on a new service start date IEnovaby November 30, 2022, Sempra Infrastructure retains the right to terminate the contract and seek to recover its reasonable and documented costs and lost profits. Discussions with the CFE regarding the future of the pipeline are underway in accordance with a non-binding MOU announced in January 2022 that, among other matters, addresses efforts to restart service on the pipeline. In July 2022, Sempra Infrastructure and the CFE entered into a Shareholders’ Agreement that establishes a framework for a JV between the parties to work on restarting service on the pipeline, including the potential re-routing of a portion of the pipeline. This agreement is subject to a number of conditions to be satisfied before it becomes effective, including regulatory and corporate authorizations.
At September 30, 2021,2022, Sempra MexicoInfrastructure had $436$423 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if IEnovaSempra Infrastructure is unable to make such repairs (which have not commenced) or re-route a portion of the pipeline (which has not been agreed to by the parties)parties, but is subject to negotiation pursuant to a non-binding MOU and a Shareholders’ Agreement, as described above) and resume operations in the Guaymas-El Oro segment of the Sonora pipeline or if IEnovaSempra Infrastructure terminates the contract and is unable to obtain recovery, which in each case could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
Sasabe-Puerto Libertad-Guaymas Segment.Segment – Resolved. In June 2014, IEnovaSempra Infrastructure and a landowner agreed to enter into a voluntary right-of-way easement agreement for the construction and operation of a seven-mile section of the 314-mile Sasabe-Puerto Libertad-Guaymas segment of the Sonora natural gas pipeline on the landowner’s property. However, in 2015, the landowner filed a complaint demanding the easement agreement be nullified. In September 2021, a definitive and non-appealable judgment was issued declaring the easement agreement nullified and ordering the removal of the pipeline from the landowner’s property. IEnova intends to fileThe execution of the judgment is suspended as a result of an amparo lawsuit filed by the CFE as an interested third party that did not participate in the litigation. Sempra Infrastructure filed a special judicial action whereby it will ask aasking the civil court to acknowledge the existence of the easement and to determine the consideration the landowner should receive in exchange for the easement. The failureIn July 2022, Sempra Infrastructure and the landowner entered into a new easement agreement approved by the court for the seven-mile section on the landowner’s property, thus bringing this case to stay this judgment pending the resolutiondefinitive conclusion.
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Table of IEnova’s planned special judicial action or prevail in preserving the easement in the special judicial action could require us to modify the route of the pipeline and could require a temporary shutdown of this portion of the pipeline, which could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.Contents
Regulatory and Other Actions by the Mexican Government – Unresolved
We describe below certain actions by the Mexican government that could have a material impact on the energy sector in Mexico. IEnovaSempra Infrastructure and other parties affected by these resolutions, orders, decrees, regulations and proposed amendments to Mexican law have challenged them by filing amparo and other claims, some of which have been granted injunctive relief. The court-ordered injunctions or suspensions provide temporary relief until Mexico’s Federal District Courtfederal district court or Supreme Court ultimately resolves the amparo and other claims. If passed in its current form, the proposed constitutional reform described below introduces significant changes to the legal and economic principles underlying the country’s energy reform of 2013, generating imminent risks for private investments in this sector. An unfavorable decision on one or more of these amparo or other challenges or the potential for extended disputes or if passed in its current form, the proposed constitutional reform may impact our ability to operate our facilities at existing levels or at all, may result in increased costs for IEnovaSempra Infrastructure and its customers, may adversely affect our ability to develop new projects, may result in decreased revenues and cash flows, and may negatively impact our ability to recover the carrying values of our investments in Mexico, any of which may have a material adverse effect on our business, financial condition, results of operations, financial condition, cash flows and/or prospects.
Transmission Rates for Legacy Generation Facilities. In May 2020, the CRE approved an update to the transmission rates included in legacy renewable and cogeneration energy contracts based on the claim that the legacy transmission rates did not reflect fair and proportional costs for providing the applicable services and, therefore, created inequitable competitive conditions. Three of IEnova’s renewable energy facilities (Don Diego Solar, Border Solar and Ventika) are currently holders of contracts with such legacy rates, and under the terms of these contracts any increases in the transmission rates would be passed through directly to their customers. These renewable energy facilities have obtained injunctive relief but are required to guarantee the difference in tariffs, which could be material, until the claims are definitively resolved by the courts. The three facilities obtained favorable resolutions from a lower court and the CRE has appealed one of these decisions.
Offtakers of Legacy Generation Permits. In October 2020, the CRE approved a resolution to amend the rules for the inclusion of new offtakers of legacy generation and self-supply permits (the Offtaker Resolution), which became effective immediately. The Offtaker Resolution prohibits self-supply permit holders from adding new offtakers that were not included in the original development or expansion plans, making modifications to the amount of energy allocated to the named offtakers, and including load centers that have entered into a supply arrangement under Mexico’s Electricity Industry Law. Don Diego Solar, Border Solar and Ventika are holders of self-supply permits, and the two solar facilities are impactedcurrently affected by the Offtaker Resolution. In January 2022, Don Diego Solar and Border Solar obtained injunctive relief and a favorable resolution from a Mexican federal district court and the CRE appealed that decision. If IEnovaSempra Infrastructure is not able to obtain permanent legal protection for these impacted facilities, IEnovaSempra Infrastructure expects it will sell Border Solar’s capacity and a portion of Don Diego Solar’s capacity affected by the Offtaker Resolution into the spot market. Currently, prices in the spot market are significantly lowerhigher than the fixed prices in the PPAs that were entered into through self-supply permits.permits, but these markets are subject to significant volatility. At September 30, 2021,2022, Sempra MexicoInfrastructure had $14$13 million in other intangible assets, net, related to these self-supply permits previously granted by the CRE and impacted by the
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Offtaker Resolution that could be subject to impairment if IEnovaSempra Infrastructure is unable to obtain adequate legal protection. IEnova has filed lawsuits against the Offtaker Resolution and received injunctive relief pending final resolution.
Amendments to Mexico’s Electricity Industry Law. In March 2021, the Mexican government published a decree with amendments to Mexico’s Electricity Industry Law that include some public policy changes, including establishing priority of dispatch for CFE plants over privately owned plants. According to the decree, these amendments were to become effective on March 10, 2021, and SENER, the CRE and CENACE were to have 180 calendar days to modify, as necessary, all resolutions, policies, criteria, manuals and other regulations applicable to the power industry to conform with this decree. However, a Mexican court issued a suspension of the amendments on March 19, 2021, and it is expected that Mexico’s2021. In April 2022, the Mexican Supreme Court will ultimately settleresolved an action of unconstitutionality filed by a group of senators against the matter.amended Electricity Industry Law, but the qualified majority of eight votes out of 11 as is required in matters involving constitutionality was not reached and the proceeding was dismissed, which means that the Mexican Supreme Court did not issue a binding precedent and the amended Electricity Industry Law remains in force. Sempra Infrastructure filed three lawsuits against the amendments to the Electricity Industry Law and, in each of them, Sempra Infrastructure obtained a favorable judgment of the first instance in the lower courts, which has been appealed. If the proposed amendments are affirmed by the lower courts or by the Mexican Supreme Court (which in these cases would only require a simple majority vote), the CRE may be required to revoke self-supply permits granted under the former electricity law, which were grandfathered when the new Electricity Industry Law was enacted, under a legal standard that is ambiguous and not well defined under the law.
Amendments to Mexico’s Hydrocarbons Law. In May 2021, amendments to Mexico’s Hydrocarbons Law were published and became effective. The amendments grant SENER and the CRE additional powers to suspend and revoke permits related to the midstream and downstream sectors. Suspension of permits will be determined by SENER or the CRE when a danger to national security, energy security, or to the national economy is foreseen. Likewise, new grounds for the revocation of permits are in place if the permit holder (i) carries out its activity with illegally imported products; (ii) fails, on more than one occasion, to comply with the provisions applicable to quantity, quality and measurement of the products; or (iii) modifies the technical conditions of its infrastructure without authorization. Additionally, in the case of existing permits, authorities will revoke those permits that fail to comply with the minimum storage requirements established by SENER or fail to comply with requirements or violate provisions established by the amended Hydrocarbons Law. All of IEnova’s facilitiesthe Sempra Infrastructure entities participating in the Mexico hydrocarbons sector filed lawsuits against the initiative to reform the Hydrocarbons Law and received injunctive relief pending a final resolution by the courts. In May 2021, a Mexican district court ordered the suspension of several of the provisions of the amendments with general application across the sector.Law. In 2021, district courts issued judgments that the amendments do not affect the interests of the companies at this time and, as a result, dismissed the amparo lawsuits, filed by several companies inincluding the market, including three of the five lawsuits filed by IEnova.the Sempra Infrastructure entities. The Sempra Infrastructure entities have appealed these judgments. The Circuit Courts upheld the dismissal of the amparo lawsuits, except one that is pending resolution.
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Regulatory and Other Actions by the Mexican Government – Resolved
Transmission Rates for Legacy Generation Facilities. In May 2020, the CRE approved an update to the transmission rates included in legacy renewable and cogeneration energy contracts based on the claim that the legacy transmission rates did not reflect fair and proportional costs for providing the applicable services and, therefore, created inequitable competitive conditions. Three of Sempra Infrastructure’s renewable energy facilities (Don Diego Solar, Border Solar and Ventika) are currently holders of contracts with such legacy rates, and under the terms of these contracts any increases in the transmission rates would be passed through directly to their customers. These judgments have been appealedrenewable energy facilities sought and obtained injunctive relief but were required to guarantee the difference in tariffs. The three facilities obtained favorable resolutions from a lower court and the granted suspensions will remain valid untilCRE appealed those decisions, which were definitively affirmed in favor of the lawsuits are definitively resolved.
Amendments to Mexico’s General Foreign Trade Rules. In June 2021, amendments to Mexico’s General Foreign Trade Rules went into effect, which establish that only state-owned companies may importDon Diego Solar, Border Solar and export hydrocarbons, refined products, petrochemicals, and biofuels through channels other than those authorized (LDA authorization). These amendments prevent non-state-owned companies from (i) obtaining LDA authorizations, which affect new projects that have not obtained such approval, and (ii) renewing existing LDA authorizations, which affect operational projects and those under construction. The ECA Regas FacilityVentika facilities, whereby the injunctions were made permanent, the regulations were declared unconstitutional, and the Veracruz terminal have LDA authorizations thatguarantee was determined to not be required. The resolutions are valid through 2023 and, as a preventive measure, have filed amparo claims to challenge the newly introduced barrier to renew their existing LDA authorizations. In order to start operations at terminals currently under construction or in development in the vicinity of Topolobampo, Manzanillo and Ensenada, including the proposed ECA LNG liquefaction projects, IEnova filed amparo claims to challenge such amendments that prevent them from obtaining LDA authorizations in the future.final.
Proposed Constitutional Reform in Mexico.In September 2021, the President of Mexico presented a constitutional reform initiative with the stated goal of preserving energy security and self-sufficiency, and a continuous supply of electricity to the country’s population, as a condition for guaranteeing national security and the human right to a decent life. The CRE and the National Commission of Hydrocarbons would be dissolved, and their functions would be carried out by SENER. CENACE would be reinstated to the CFE, and the CFE would be responsible for generating, conducting, transforming, distributing and supplying electricity, and would be the only entity allowed to commercialize electric energy in Mexico. Electricity generation permits and contracts for the sale of electricity and RECs to the CFE, including permits at all of IEnova’sSempra Infrastructure’s operational power generation facilities, would be canceled. The public electricity supply service would be provided exclusively by the CFE, which may acquire up to 46% of required energy from the private sector. Only certain private power plants would be permitted to continue generating electricity and compete to offer the CFE the lowest production costs.
The initiative must first be submitted to a vote and approved in the respective plenary sessions of On April 17, 2022, the Chamber of Deputies and the Chamber of Senators in Mexico. Additionally, the initiative must be approved by a two-thirds vote of Mexico’s Federal Congress and by the majority of the legislatures of the Mexican States and published in the Federal Official Gazette to be in force. Sempra Mexico is following this legislative procedure while assessing alternatives for its project companies. If passed in its current form, the initiative could have a material adverse effect on our business, financial condition, results of operations, cash flows and/or prospects, our ability to recover the carrying values of our investments in Mexico and our ability to operate existing facilities and develop new energy projects inrejected the country.proposed constitutional reform.
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Other Litigation – Unresolved
RBS Sempra Commodities
Sempra holds an equity method investment in RBS Sempra Commodities, a limited liability partnership in the process of being liquidated. RBS, now NatWest Markets plc, our partner in the JV, paid an assessment of £86 million (approximately $138 million in U.S. dollars) in October 2014 to HMRC for denied VAT refund claims filed in connection with the purchase of carbon credit allowances by RBS SEE, a subsidiary of RBS Sempra Commodities. RBS SEE was subsequently sold to J.P. Morgan Chase & Co. and later to Mercuria Energy Group, Ltd. HMRC asserted that RBS was not entitled to reduce its VAT liability by VAT paid on certain carbon credit purchases during 2009 because RBS knew or should have known that certain vendors in the trading chain did not remit their own VAT to HMRC. In July 2021, RBS entered into a settlement with HMRC that resolved this matter.
In 2015, liquidators filed a claim in the High Court of Justice against RBS (now NatWest Markets plc, our partner in the JV) and Mercuria Energy Europe Trading Limited (the Defendants) on behalf of 10 companies (the Liquidating Companies) that engaged in carbon credit trading via chains that included a company that traded directly with RBS SEE.SEE, a subsidiary of RBS Sempra Commodities. The claim alleges that the Defendants’ participation in the purchase and sale of carbon credits resulted in the Liquidating Companies’ carbon credit trading transactions creating a VAT liability they were unable to pay, and that the Defendants are liable to provide for equitable compensation due to dishonest assistance and for compensation under the U.K. Insolvency Act of 1986. Trial on the matter was held in June and July of 2018. In March 2020, the High Court of Justice rendered its judgment mostly in favor of the Liquidating Companies and awarded damages of approximately £45 million (approximately $61$50 million in U.S. dollars at September 30, 2021)2022), plus costs and interest. In October 2020, the High Court of Justice assessed costs and interest to be approximately £21 million (approximately $28$23 million in U.S. dollars at September 30, 2021)2022) as of that date, with interest continuing to accrue. The Defendants appealed and, in May 2021, the Court of Appeal set aside the High Court of Justice’s decision and ordered a retrial. TheIn July 2022, the Supreme Court of the U.K. denied the Liquidating Companies in the High Court of Justice case have applied to the Supreme Courtapplication for permission to appeal the Court of Appeals’Appeal’s decision. No date has been scheduled for the retrial. J.P. Morgan Chase & Co. has, which acquired RBS SEE and later sold it to Mercuria Energy Group, Ltd., previously notified us that Mercuria Energy Group, Ltd. has sought indemnity for the claim, and J.P. Morgan Chase & Co. has in turn sought indemnity from Sempra and RBS.
We recorded $100 million in equity losses from our investment in RBS Sempra Commodities in Equity Earnings on Sempra’s Condensed Consolidated Statement of Operations inIn the firstsecond quarter of 2020, which represented an2021, we reduced our estimate of our obligations to settle pending VAT matters and related legal costs. In the second quarter of 2021, we reduced this estimatecosts by $50 million in Equity Earnings on Sempra’s Condensed Consolidated Statement of Operations based on the settlement with HMRCHer Majesty’s Revenue and Customs (U.K.’s Revenue and Customs Department) on the First-Tier Tribunal case and revised assumptions on the High Court of Justice case. The final outcome of the High Court of Justice case remains uncertain.
Asbestos Claims Against EFH Subsidiaries
Certain EFH subsidiaries that we acquired as part of the merger of EFH with an indirect subsidiary of Sempra arewere defendants in personal injury lawsuits brought in state courts throughout the U.S. As of November 1, 2021, 3 such lawsuits are pending, all of which have been served. These cases allegealleged illness or death as a result of exposure to asbestos in power plants designed and/or built by companies whose assets were purchased by predecessor entities to the EFH subsidiaries, and generally assert claims for product defects, negligence, strict liability and wrongful death. They seeksought compensatory and punitive damages. As of October 31, 2022, two lawsuits are pending. Additionally, in connection with a December 2015 deadline in the EFH bankruptcy proceeding, approximately 28,000 proofs of claim were filed on behalf of
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persons who allege exposure to asbestos under similar circumstances and assert the right to file such lawsuits in the future. None of these claims or lawsuits were discharged in the EFH bankruptcy proceeding. The costs to defend or resolve these lawsuits and the amount of damages that may be imposed or incurred could have a material adverse effect on Sempra’s results of operations, financial condition, cash flows financial condition and results of operations.and/or prospects.
Ordinary Course Litigation
We are also defendants in ordinary routine litigation incidental to our businesses, including personal injury, employment litigation, product liability, property damage and other claims. Juries have demonstrated an increasing willingness to grant large awards, including punitive damages, in these types of cases.

LEASES
We discuss leases further in Note 16 of the Notes to Consolidated Financial Statements in the Annual Report.
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A lease exists when a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. We determine if an arrangement is or contains a lease at inception of the contract.
Some of our lease agreements contain nonlease components, which represent activities that transfer a separate good or service to the lessee. As the lessee for both operating and finance leases, we have elected to combine lease and nonlease components as a single lease component for real estate, fleet vehicles, power generating facilities, and pipelines, whereby fixed or in-substance fixed payments allocable to the nonlease component are accounted for as part of the related lease liability and ROU asset. As the lessor, we have elected to combine lease and nonlease components as a single lease component for real estate, power generating facilities and terminals if the timing and pattern of transfer of the lease and nonlease components are the same and the lease component would be classified as an operating lease if accounted for separately.
Lessee Accounting
We have operating and finance leases for real and personal property (including office space, land, fleet vehicles, machinery and equipment, warehouses and other operational facilities) and PPAs with renewable energy, energy storage and peaker plant facilities.
In September 2022, SDG&E amended its lease agreement for its corporate facility to extend the lease termination date from December 2024 to January 2034. SDG&E recognized the remeasurement of its right-of-use asset and total operating lease liability based on its incremental borrowing rate at the effective date of the modification, which increased these amounts by $59 million. As a result of this modification, undiscounted lease payments decreased by $9 million in 2023, increased by $10 million in each of 2025 and 2026 and increased by $80 million thereafter.
SDG&E entered into an energy storage tolling agreement that commenced in August 2022 and expires in July 2032. SDG&E recorded an operating lease right-of-use asset and operating lease liability of $28 million. Undiscounted lease payments are $1 million in 2022, $4 million in each of 2023 through 2026 and $18 million thereafter.
Leases thatThat Have Not Yet Commenced
SDG&E has entered into a batterytwo energy storage tolling agreement that itagreements, of which SDG&E expects one will commence in the fourth quarter of 2021.2022 and one will commence in the second half of 2023. SDG&E expects to account for the tolling agreement as an operating lease upon commencement and expects the future minimum lease payments to be $1 million in 2021, $102022, $14 million in each of 20222023 through 20252026 and $103$87 million thereafter until expiration from 2032 through 2033.
SoCalGas has entered into a fleet vehicle agreement, under which SoCalGas expects leases will commence in 2036.the fourth quarter of 2022 through the fourth quarter of 2023. SoCalGas expects the future minimum lease payments to be $2 million in each of 2023 through 2026 and $10 million thereafter until expiration at various dates from 2030 through 2031.
Lessor Accounting
Sempra MexicoInfrastructure is a lessor for certain of its natural gas and ethane pipelines, compressor stations, LPGliquid petroleum gas storage facilities, a rail facility and two liquid fuels terminals.
Generally,terminals, which we recognize operating lease income on a straight-line basis over the lease term and evaluate the underlying asset for impairment. Certain of our leases contain rate adjustments or are based on foreign currency exchange rates that may result in lease payments received that vary in amount from one period to the next.
In July 2021, a rail facility agreement commenced, which Sempra Mexico is accountingaccount for as aoperating or sales-type lease. The rail facility is being used by the lessee to transport liquid fuels outleases.
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Table of the Veracruz terminal. The lessee has the right to direct the use of the rail facility and will obtain substantially all of the economic benefits of the rail facility. At lease commencement, Sempra Mexico derecognized the $44 million carrying value of the rail facility from PP&E and recognized a net investment in sales-type lease asset of $60 million and a selling profit of $16 million. The agreement expires in 2041 and will automatically renew for successive five-year terms unless written notice is provided by Sempra Mexico or the lessee. Fixed lease payments are payable in the first five years of the agreement, which the lessee is required to pay even in the event of lease termination.Contents
We provide information below for leases for which we are the lessor.

LESSOR INFORMATION ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – SEMPRALESSOR INFORMATION ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – SEMPRALESSOR INFORMATION ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – SEMPRA
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended
September 30,		Nine months ended
September 30,		Three months ended September 30,Nine months ended September 30,
20212020202120202022202120222021
Sales-type leases:Sales-type leases:Sales-type leases:
Income recognized at lease commencementIncome recognized at lease commencement$16 $— $16 $1 Income recognized at lease commencement$— $16 $— $16 
Interest incomeInterest income2 — 2 1 Interest income2 2 6 2 
Total revenues from sales-type leases(1)
Total revenues from sales-type leases(1)
$18 $— $18 $2 
Total revenues from sales-type leases(1)
$2 $18 $6 $18 
Operating leases:Operating leases:Operating leases:
Fixed lease paymentsFixed lease payments$80 $48 $192 $145 Fixed lease payments$71 $80 $211 $192 
Variable lease paymentsVariable lease payments2 1 3 1 Variable lease payments3 2 7 3 
Total revenues from operating leases(1)
Total revenues from operating leases(1)
$82 $49 $195 $146 
Total revenues from operating leases(1)
$74 $82 $218 $195 
Depreciation expenseDepreciation expense$13 $10 $35 $29 Depreciation expense$14 $13 $41 $35 
(1)Included in Revenues: Energy-Related Businesses on the Condensed Consolidated Statements of Operations.

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CONTRACTUAL COMMITMENTS
We discuss below significant changes in the first nine months of 20212022 to contractual commitments discussed in Notes 1 and 16 of the Notes to Consolidated Financial Statements in the Annual Report.
LNG Purchase Agreement
Sempra LNGInfrastructure has a sale and purchase agreementan SPA for the supply of LNG to the ECA Regas Facility. The commitment amount is calculated using a predetermined formula based on estimated forward prices of the index applicable from 20212022 to 2029. Although this agreement specifies a number of cargoes to be delivered, under its terms, the customersupplier may divert certain cargoes, which would reduce amounts paid under the agreement by Sempra LNG.Infrastructure. At September 30, 2021,2022, we expect the commitment amount to decrease by $277 million in 2021 and then increase by $496$351 million in 2022 $279and increase by $340 million in 2023, $197$257 million in 2024, $153$241 million in 2025, $214 million in 2026 and by $499$501 million thereafter (through contract termination in 2029) compared to December 31, 2020,2021, reflecting changes in estimated forward prices since December 31, 20202021 and actual transactions for the first nine months of 2021.2022. These LNG commitment amounts are based on the assumption that all LNG cargoes, less those already confirmed to be diverted, under the agreement are delivered. Actual LNG purchases in the current and prior years have been significantly lower than the maximum amount provided under the agreement due to the customersupplier electing to divert cargoes as allowed by the agreement.
OTHER COMMITMENTS
Franchise Agreements
In December 2020, the City of San Diego and SDG&E agreed to extend SDG&E’s natural gas and electric franchises for the city to June 1, 2021. After completing a competitive bid process, on June 8, 2021, the City of San Diego approved ordinances granting to SDG&E the natural gas and electric franchises for the city. These franchise agreements provide SDG&E the opportunity to serve the City of San Diego for the next 20 years, consisting of 10-year agreements that will automatically renew for an additional 10 years unless the City Council voids the automatic renewal with a supermajority vote. The agreements went into effect in July 2021. Over the 20-year term of the agreements, SDG&E will make principal payments of $110 million and interest payments of $13 million as consideration for the natural gas and electric franchise agreements. The consideration paid will not be recovered from customers and will be amortized over 20 years. SDG&E paid $11 million to the City of San Diego in the first nine months of 2021. At September 30, 2021, SDG&E has commitments to make future payments of $14 million per year in 2022 through 2024, $15 million in 2025 and $55 million thereafter.
Two lawsuits have been filed in the California Superior Court challenging the City’s process for its award of the natural gas and electric franchises and seeking to declare the franchise agreements null and void.
ENVIRONMENTAL ISSUES
We disclose any proceeding under environmental laws to which a government authority is a party when the potential monetary sanctions, exclusive of interest and costs, exceed the lesser of $1 million or 1% of current assets, which was $46$45 million for Sempra, $17$18 million for SDG&E and $15$13 million for SoCalGas at September 30, 2021.2022.
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NOTE 12. SEGMENT INFORMATION
We have 5four separately managed reportable segments, as follows:
▪SDG&E provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County.
▪SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California.
▪Sempra Texas UtilitiesUtilities holds our investment in Oncor Holdings, which owns an 80.25% interest in Oncor, a regulated electric transmission and distribution utility serving customers in the north-central, eastern, western and panhandle regions of Texas; and our indirect, 50% interest in Sharyland Holdings L.P., which owns Sharyland Utilities, L.L.C., a regulated electric transmission utility serving customers near the Texas-Mexico border.
▪Sempra MexicoInfrastructure develops, ownsincludes the operating companies of our subsidiary, SI Partners, as well as a holding company and operates, or holds interests in, natural gas, electric, LNG, LPG, ethane and liquid fuels infrastructure, and has marketing operations for the purchase of LNG and the purchase and sale of natural gas in Mexico.
▪certain services companies. Sempra LNGInfrastructure develops, builds, operates and invests in natural gas liquefaction export facilities, including natural gas pipelinesenergy infrastructure to help enable the energy transition in North American markets and infrastructure,globally. Sempra Infrastructure owns a 70% interest in SI Partners, which held a 100% ownership interest in Sempra LNG Holding, LP and buys, sells and transports natural gas through its marketing operations, all within North America.
As we discussa 99.9% ownership interest in Note 5, the financial information related to our businesses that constituted the Sempra South American Utilities segment is presented as discontinued operations for all periods presented. The information in the tables below excludes amounts from discontinued operations unless otherwise noted. We completed the sales of our discontinued operations in the second quarter of 2020.IEnova at September 30, 2022.
We evaluate each segment’s performance based on its contribution to Sempra’s reported earnings and cash flows. The California UtilitiesSDG&E and SoCalGas operate in essentially separate service territories, under separate regulatory frameworks and rate structures set by the CPUC and, forin the case of SDG&E, the FERC. We describe the accounting policies of all of our segments in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
The cost of common services shared by the business segments is assigned directly or allocated based on various cost factors, depending on the nature of the service provided. Interest income and expense is recorded on intercompany loans. The loan balances and related interest are eliminated in consolidation.
The following tables show selected information by segment from our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets. Amounts labeled as “All other” in the following tables consist primarily of activities of parent organizations and include certain nominal amounts from our South American businesses that did not qualify for treatment as discontinued operations.organizations.
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SEGMENT INFORMATION   
(Dollars in millions)   
 Three months ended September 30,Nine months ended September 30,
 2021202020212020
REVENUES    
SDG&E$1,464 $1,472 $4,119 $3,976 
SoCalGas1,106 842 3,738 3,247 
Sempra Mexico597 351 1,368 935 
Sempra LNG119 63 367 255 
All other2 — 4 1 
Adjustments and eliminations— 2 (1)— 
Intersegment revenues(1)
(275)(86)(582)(215)
Total$3,013 $2,644 $9,013 $8,199 
INTEREST EXPENSE    
SDG&E$104 $103 $307 $307 
SoCalGas39 39 118 119 
Sempra Mexico43 31 122 95 
Sempra LNG4 8 10 39 
All other77 93 240 304 
Intercompany eliminations(8)(10)(21)(46)
Total$259 $264 $776 $818 
INTEREST INCOME    
SDG&E$— $1 $1 $2 
SoCalGas— — — 2 
Sempra Mexico12 14 36 47 
Sempra LNG6 25 23 65 
All other1 — 2 3 
Intercompany eliminations(3)(13)(12)(43)
Total$16 $27 $50 $76 
DEPRECIATION AND AMORTIZATION  
SDG&E$226 $200 $659 $598 
SoCalGas180 165 533 486 
Sempra Mexico60 47 168 141 
Sempra LNG3 2 8 7 
All other2 4 8 10 
Total$471 $418 $1,376 $1,242 
INCOME TAX EXPENSE (BENEFIT)  
SDG&E$90 $33 $168 $161 
SoCalGas(437)(6)(335)95 
Sempra Mexico24 92 145 (161)
Sempra LNG(11)18 19 59 
All other(8)(38)(42)(94)
Total$(342)$99 $(45)$60 
EQUITY EARNINGS (LOSSES)    
Equity earnings (losses), before income tax:    
Sempra Texas Utilities$— $1 $3 $1 
Sempra LNG137 116 404 257 
All other— — 50 (100)
137 117 457 158 
Equity earnings, net of income tax:   
Sempra Texas Utilities207 208 480 457 
Sempra Mexico47 1 85 207 
254 209 565 664 
Total$391 $326 $1,022 $822 
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SEGMENT INFORMATION (CONTINUED)
SEGMENT INFORMATIONSEGMENT INFORMATION   
(Dollars in millions)(Dollars in millions)(Dollars in millions)   
Three months ended
September 30,		Nine months ended
September 30,		 Three months ended
September 30,		Nine months ended
September 30,
2021202020212020 2022202120222021
EARNINGS (LOSSES) ATTRIBUTABLE TO COMMON SHARES 
REVENUESREVENUES    
SDG&ESDG&E$1,569 $1,464 $4,413 $4,119 
SoCalGasSoCalGas1,385 1,106 4,879 3,738 
Sempra InfrastructureSempra Infrastructure697 479 1,810 1,269 
All otherAll other1 2 1 4 
Adjustments and eliminationsAdjustments and eliminations— — — (1)
Intersegment revenues(1)
Intersegment revenues(1)
(35)(38)(119)(116)
TotalTotal$3,617 $3,013 $10,984 $9,013 
DEPRECIATION AND AMORTIZATIONDEPRECIATION AND AMORTIZATION  
SDG&ESDG&E$247 $226 $730 $659 
SoCalGasSoCalGas190 180 565 533 
Sempra InfrastructureSempra Infrastructure67 63 199 176 
All otherAll other2 2 6 8 
TotalTotal$506 $471 $1,500 $1,376 
INTEREST INCOMEINTEREST INCOME    
SDG&ESDG&E$2 $— $3 $1 
SoCalGasSoCalGas3 — 4 — 
Sempra InfrastructureSempra Infrastructure7 18 37 59 
All otherAll other6 — 14 1 
Intercompany eliminationsIntercompany eliminations— (2)— (11)
TotalTotal$18 $16 $58 $50 
INTEREST EXPENSEINTEREST EXPENSE    
SDG&ESDG&E$113 $104 $333 $307 
SoCalGasSoCalGas50 39 135 118 
Sempra InfrastructureSempra Infrastructure39 45 98 131 
All otherAll other81 78 232 240 
Intercompany eliminationsIntercompany eliminations(1)(7)(2)(20)
TotalTotal$282 $259 $796 $776 
INCOME TAX EXPENSE (BENEFIT)INCOME TAX EXPENSE (BENEFIT)  
SDG&ESDG&E$205 $178 $603 $633 SDG&E$35 $90 $141 $168 
SoCalGasSoCalGas(1,126)(24)(625)425 SoCalGas(28)(437)75 (335)
Sempra Texas UtilitiesSempra Texas Utilities206 209 479 458 Sempra Texas Utilities1 — 1 — 
Sempra Mexico164 50 225 302 
Sempra LNG1 71 194 207 
Discontinued operations— (7)— 1,840 
Sempra InfrastructureSempra Infrastructure58 13 219 164 
All otherAll other(98)(126)(226)(515)All other(45)(8)(1)(42)
TotalTotal$(648)$351 $650 $3,350 Total$21 $(342)$435 $(45)
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
SDG&E$1,560 $1,323 
SoCalGas1,417 1,345 
Sempra Mexico260 443 
Sempra LNG362 196 
EQUITY EARNINGSEQUITY EARNINGS    
Equity earnings, before income tax:Equity earnings, before income tax:    
Sempra Texas UtilitiesSempra Texas Utilities$1 $— $6 $3 
Sempra InfrastructureSempra Infrastructure133 137 430 404 
All otherAll other7 6 All other— — — 50 
134 137 436 457 
Equity earnings, net of income tax:Equity earnings, net of income tax:   
Sempra Texas UtilitiesSempra Texas Utilities257 207 603 480 
Sempra InfrastructureSempra Infrastructure26 47 79 85 
283 254 682 565 
TotalTotal$3,606 $3,313 Total$417 $391 $1,118 $1,022 
September 30,
2021		December 31,
2020
ASSETS
SDG&E$23,783 $22,311 
SoCalGas19,919 18,460 
Sempra Texas Utilities12,580 12,542 
Sempra Mexico11,339 10,752 
Sempra LNG3,335 2,205 
All other1,094 1,209 
Intersegment receivables(1,578)(856)
Total$70,472 $66,623 
EQUITY METHOD AND OTHER INVESTMENTS
Sempra Texas Utilities$12,580 $12,542 
Sempra Mexico924 852 
Sempra LNG454 433 
All other— 1 
Total$13,958 $13,828 
(1)    Revenues for reportable segments include intersegment revenues of $3 million,$4, $24, million, $52 million and $196 million$7 for the three months ended September 30, 2021; $7 million, $72 million, $114 million2022; $11 $73, and $389 million$35 for the nine months ended September 30, 2021; $1 million, $23 million, $18 million2022; $3, $24, and $44 million$11 for the three months ended September 30, 20202021 and $4 million, $61 million, $69 million$7, $72, and $81 million$37 for the nine months ended September 30, 20202021 for SDG&E, SoCalGas, Sempra Mexico and Sempra LNG,Infrastructure, respectively.
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SEGMENT INFORMATION (CONTINUED)
(Dollars in millions)
Three months ended
September 30,		Nine months ended
September 30,
2022202120222021
EARNINGS (LOSSES) ATTRIBUTABLE TO COMMON SHARES 
SDG&E$271 $205 $681 $603 
SoCalGas(82)(1,126)339 (625)
Sempra Texas Utilities256 206 604 479 
Sempra Infrastructure114 164 392 419 
All other(74)(97)(360)(226)
Total$485 $(648)$1,656 $650 
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
SDG&E$1,651 $1,560 
SoCalGas1,394 1,417 
Sempra Infrastructure489 622 
All other6 7 
Total$3,540 $3,606 
September 30,
2022		December 31,
2021
ASSETS
SDG&E$25,759 $24,058 
SoCalGas21,325 20,324 
Sempra Texas Utilities13,664 13,047 
Sempra Infrastructure14,490 14,408 
All other1,363 1,399 
Intersegment receivables(1,038)(1,191)
Total$75,563 $72,045 
EQUITY METHOD AND OTHER INVESTMENTS
Sempra Texas Utilities$13,664 $13,047 
Sempra Infrastructure1,770 1,425 
Total$15,434 $14,472 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YouThis combined MD&A for Sempra, SDG&E and SoCalGas should be read the following discussion in conjunction with the Condensed Consolidated Financial Statements and the Notes thereto in this report, and the Consolidated Financial Statements and the Notes thereto, “Part I – Item 1A. Risk Factors” and “Part II – Item 7. MD&A” in the Annual Report.
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OVERVIEW
Sempra Energy is a California-based holding company with energy infrastructure investments in North America. On July 2, 2021, Sempra Energy began doing business as Sempra. Our businesses invest in, develop and operate energy infrastructure, and provide electric and gas services to customers through regulated public utilities. AsIn the fourth quarter of 2021, we formed Sempra Infrastructure, which resulted in a change to our reportable segments. Historical segment disclosures have been restated to conform with the current presentation of our four reportable segments, which we discuss in Note 12 of the Notes to Condensed Consolidated Financial Statements in this report and in “Part I – Item 1. Business” in the Annual Report, our business activities are organized under five separately managed reportable segments.Report.
Our former South American businesses and certain activities associated with those businesses are presented as discontinued operations. Nominal activities that are not classified as discontinued operations have been subsumed into Parent and other. We completed the sales of these businesses in the second quarter of 2020. Our discussions below exclude discontinued operations, unless otherwise noted.
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This report includes information for the following separate registrants:
▪Sempra;
▪SDG&E; and
▪SoCalGas.
References in this report to “we,” “our,” “us,” “our company” and “Sempra” are to Sempra and its consolidated entities, collectively, unless otherwise stated or indicated by the context. We refer to SDG&E and SoCalGas collectively as the California Utilities, which do not include the utilities in our Sempra Texas Utilities or Sempra Mexico segments or the utilities in our former South American businesses included in discontinued operations. All references in this report to our reportable segments are not intended to refer to any legal entity with the same or similar name.
Throughout this report, we refer to the following as Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements when discussed together or collectively:
•the Condensed Consolidated Financial Statements and related Notes of Sempra;
•the Condensed Financial Statements and related Notes of SDG&E; and
•the Condensed Financial Statements and related Notes of SoCalGas.
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RESULTS OF OPERATIONS
We discuss the following in Results of Operations:
▪Overall results of operations of Sempra;
▪Segment results;
▪Significant changes in revenues, costs and earnings; and
▪Impact of foreign currency and inflation rates on our results of operations.

OVERALL RESULTS OF OPERATIONS OF SEMPRA
InSempra’s overall results of operations for the three months ended September 30, 2021, we reported losses of $(648) million(Q3) and diluted EPS of $(2.03) compared to earnings of $351 million and diluted EPS of $1.21 for the same period in 2020. In the nine months ended (YTD) September 30, 2022 and 2021 we reportedwere as follows:
OVERALL RESULTS OF OPERATIONS OF SEMPRA
(Dollars and shares in millions, except per share amounts)
sre-20220930_g4.jpgsre-20220930_g5.jpgsre-20220930_g6.jpg
Our earnings of $650 million and diluted EPS of $2.09 compared to earnings of $3,350 million and diluted EPS of $11.43 for the same period in 2020. The change in diluted EPS in the three months ended September 30, 2021 compared to the same period in 2020 included a reduction in losses per share by $0.20 due to an increase in weighted-average common shares outstanding. The change in diluted EPS in the nine months ended September 30, 2021 compared to the same period in 2020 included a reduction in earnings per share by $0.13 due to an increase in weighted-average common shares outstanding. Our (losses) earnings and diluted EPS were impacted by variances discussed below in “Segment Results” below.Results.”

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SEGMENT RESULTS
This section presents earnings (losses) earnings by Sempra segment, as well as Parent and other, and discontinued operations, and a related discussion of the changes in segment earnings (losses) earnings.. Throughout the MD&A, our reference to earnings (losses) represents earnings represents (losses) earnings attributable to common shares. Variance amounts presented are the after-tax earnings (losses) earnings impact (based on applicable statutory tax rates), unless otherwise noted, and before NCI, where applicable.
SEMPRA (LOSSES) EARNINGS BY SEGMENT 
SEMPRA EARNINGS (LOSSES) BY SEGMENTSEMPRA EARNINGS (LOSSES) BY SEGMENT 
(Dollars in millions)(Dollars in millions) (Dollars in millions) 
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
SDG&ESDG&E$205 $178 $603 $633 SDG&E$271 $205 $681 $603 
SoCalGasSoCalGas(1,126)(24)(625)425 SoCalGas(82)(1,126)339 (625)
Sempra Texas UtilitiesSempra Texas Utilities206 209 479 458 Sempra Texas Utilities256 206 604 479 
Sempra Mexico164 50 225 302 
Sempra LNG1 71 194 207 
Sempra InfrastructureSempra Infrastructure114 164 392 419 
Parent and other(1)
Parent and other(1)
(98)(126)(226)(515)
Parent and other(1)
(74)(97)(360)(226)
Discontinued operations— (7)— 1,840 
(Losses) earnings attributable to common shares$(648)$351 $650 $3,350 
Earnings (losses) attributable to common sharesEarnings (losses) attributable to common shares$485 $(648)$1,656 $650 
(1)    Includes intercompany eliminations recorded in consolidation and certain corporate costs.

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SDG&E
The increase in earnings of $27$66 million (15%(32%) in the three months ended September 30, 20212022 compared to the same period in 20202021 was primarily due to:
▪$2932 million charge in 2020 for amounts expected to be refunded to customers and a fine related tolower income tax expense primarily from flow-through items, net of lower associated regulatory revenues;
▪$18 million higher income tax benefit from the Energy Efficiency Program inquiry;resolution of prior year income tax items; and
▪$2718 million higher CPUC base operating margin, net of operating expenses.
The increase in earnings of $78 million (13%) in the nine months ended September 30, 2022 compared to the same period in 2021 was primarily due to:
▪$48 million higher CPUC base operating margin, net of operating expenses;
▪$23 million lower income tax expense primarily from flow-through items, net of lower associated regulatory revenues;
▪$18 million higher income tax benefit from the resolution of prior year income tax items; and
▪$4 million higher electric transmission margin; offset by
▪$19 million higher net interest expense.
SoCalGas
The decrease in losses of $1,044 million in the three months ended September 30, 2022 compared to the same period in 2021 was primarily due to:
▪$1,031 million decrease in charges relating to litigation and regulatory matters pertaining to the Leak comprised of $101 million in 2022 compared to $1,132 million in 2021; and
▪$18 million higher CPUC base operating margin, net of operating expenses; offset by
▪$186 million higher income tax expense primarily from flow-through items, net of associated regulatory revenues; andinterest expense.
▪$3 million lower AFUDC equity.
The decrease in earningsEarnings of $30 million (5%) in the nine months ended September 30, 2021 compared to the same period in 2020 was primarily due to:
▪$62 million decrease due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account;
▪$20 million lower electric transmission margin, including the following favorable impacts in 2020 from the March 2020 FERC-approved TO5 settlement proceeding:
◦$18 million to conclude a rate base matter, and
◦$9 million impact from the retroactive application of the final TO5 settlement for 2019; and
▪$8 million higher income tax expense primarily from flow-through items, net of associated regulatory revenues; offset by
▪$44 million charge in 2020 for amounts expected to be refunded to customers and a fine related to the Energy Efficiency Program inquiry; and
▪$14 million higher CPUC base operating margin, net of operating expenses and favorable resolution of regulatory matters in 2020.
SoCalGas
The increase in losses of $1,102 million in the three months ended September 30, 2021 compared to the same period in 2020 was primarily due to:
▪$1,110 million increase in charges from impacts associated with the Aliso Canyon natural gas storage facility litigation and regulatory matters comprised of $1,132 million in 2021 compared to $22 million in 2020; offset by
▪$8 million higher CPUC base operating margin, net of operating expenses, AFUDC equity and other items.
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Losses of $625$339 million in the nine months ended September 30, 20212022 compared to earningslosses of $425$625 million forin the same period in 20202021 was primarily due to:
▪$1,038933 million increasedecrease in charges from impacts associated with the Aliso Canyon natural gas storage facilityrelating to litigation and regulatory matters pertaining to the Leak comprised of $199 million in 2022 compared to $1,132 million in 2021 compared to $94 million in 2020;2021; and
▪$64 million decrease due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account; offset by
▪$3050 million higher CPUC base operating margin, net of operating expenses; offset by
▪$10 million in penalties related to the energy efficiency and advocacy OSCs, which we discuss in Note 4 of the Notes to Condensed Consolidated Financial Statements; and
▪$1210 million higher income tax benefits from forecasted flow-through items.net interest expense.
Sempra Texas Utilities
The decreaseincrease in earnings of $3$50 million (1%(24%) in the three months ended September 30, 20212022 compared to the same period in 2020 was primarily due to lower equity earnings from Oncor Holdings driven by:
▪increased operating costs and expenses attributable to invested capital; and
▪lower revenues due to an annual energy efficiency program performance bonus recognized in 2020, but pending PUCT approval in 2021; offset by
▪increased revenues from rate updates to reflect increases in invested capital and customer growth.
The increase in earnings of $21 million (5%) in the nine months ended September 30, 2021 compared to the same period in 2020 was primarily due to higher equity earnings from Oncor Holdings driven by:
▪increasedhigher revenues from higher customer consumption attributable to weather and customer growth and rate updates to reflect increases in invested capital; and
▪higher revenues from an annual energy efficiency program performance bonus approved in the third quarter of 2022 compared to the fourth quarter of 2021; offset by
▪higher depreciation, property taxes and interest expense attributable to invested capital; and
▪higher operation and maintenance expense.
The increase in earnings of $125 million (26%) in the nine months ended September 30, 2022 compared to the same period in 2021 was primarily due to higher equity earnings from Oncor Holdings driven by:
▪higher revenues from rate updates to reflect increases in invested capital and higher customer consumption attributable to weather and customer growth; and
▪higher revenues from an annual energy efficiency program performance bonus approved in the third quarter of 2022 compared to the fourth quarter of 2021;offset by
▪increased operating costshigher depreciation, property taxes and expensesinterest expense attributable to invested capital; and
▪lower revenues due to an annual energy efficiency program performance bonus recognized in 2020, but pending PUCT approval in 2021.higher operation and maintenance expense.
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Sempra Mexico
Because Ecogas, our natural gas distribution utility in Mexico, uses the local currency as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period for consolidation in Sempra’s results of operations. Prior year amounts used in the variances discussed below are as adjusted for the difference in foreign currency translation rates between years. We discuss these and other foreign currency effects below in “Impact of Foreign Currency and Inflation Rates on Results of Operations.”Infrastructure
The increasedecrease in earnings of $114$50 million (30%) in the three months ended September 30, 20212022 compared to the same period in 20202021 was primarily due to:
▪$6265 million favorableearnings attributable to NCI in 2022 compared to $5 million in 2021 primarily due to the sale of a 20% NCI in SI Partners to KKR in October 2021 and the sale of a 10% NCI in SI Partners to ADIA in June 2022, offset by the increase in our ownership interest in IEnova;
▪$27 million unfavorable impact from foreign currency and inflation effects on our monetary positions in Mexico, net of foreign currency derivative effects, comprised of a $29$3 million favorable impact in 20212022 compared to a $33$30 million unfavorablefavorable impact in 2020;2021;
▪$611 million selling profit on a sales-type lease relating to the commencement of a rail facility lease at the Veracruz terminal in the third quarter of 2021;
▪$10 million lower earnings from the refined products terminals due to remeasurement of an operating lease; and
▪$9 million lower net income tax benefit primarily from outside basis differences in JV investments; offset by
▪$60 million higher earnings from asset and supply optimization driven by changes in natural gas prices and higher diversion revenues offset by lower volumes;
▪$10 million higher earnings from TdM driven by higher power prices; and
▪$8 million favorable U.S. tax impact in 2022 from converting SI Partners from a corporation to a partnership in October 2021.
The decrease in earnings of $27 million (6%) in the nine months ended September 30, 2022 compared to the same period in 2021 was primarily due to:
▪$187 million earnings attributable to NCI at IEnovain 2022 compared to $49 million in 2021 comparedprimarily due to $22 million earningsthe sale of a 20% NCI in 2020, includingSI Partners to KKR in October 2021 and the effectssale of a 10% NCI in SI Partners to ADIA in June 2022, offset by the increase in our ownership ofinterest in IEnova;
▪$1465 million primarily dueunfavorable impact from foreign currency and inflation effects on our monetary positions in Mexico, net of foreign currency derivative effects, comprised of a $108 million unfavorable impact in 2022 compared to the start of commercial operations of the Veracruz terminala $43 million unfavorable impact in first quarter of 2021; and
▪$11 million selling profit on a sales-type lease relating to the commencement of a rail facility lease at the Veracruz terminal in the third quarter of 2021, which we discuss in Note 11 of the Notes to Condensed Consolidated Financial Statements;2021; offset by
▪$654 million higher net interest expense.
The decreaseearnings from asset and supply optimization driven by changes in earnings of $77 million (25%) in the nine months ended September 30, 2021 compared to the same period in 2020 was primarily due to:
▪$227 million unfavorable impact from foreign currencynatural gas prices and inflation effects net of foreign currency derivative effects comprised of a $42 million unfavorable impact in 2021 compared to a $185 million favorable impact in 2020;higher diversion revenues offset by lower volumes;
▪$2934 million higher net income tax expense in 2021benefit primarily from outside basis differences in JV investments and the remeasurement of certain deferred income taxes;taxes and outside basis differences in JV investments;
▪$1526 million higher net interest expense; offset byfavorable U.S. tax impact in 2022 from converting SI Partners from a corporation to a partnership in October 2021;
▪$5021 million higher earnings attributable to NCI at IEnova in 2021 compared to $193 million earnings in 2020, includingfrom the effects of the increase in our ownership of IEnova;transportation business driven by higher rates;
▪$16 million primarilyhigher earnings from the renewables business due to Border Solar and the second phase of ESJ being placed in service in March 2021 and January 2022, respectively;
▪$14 million higher equity earnings from Cameron LNG JV from higher maintenance revenues;
▪$12 million higher earnings from TdM driven by higher power prices offset by lower volumes; and
▪$10 million higher earnings due to the start of commercial operations of the Veracruz terminaland Mexico City terminals in the first quarterMarch and July of 2021;2021, respectively, and
▪$11 million selling profit on a sales-type lease relating to the commencement of a rail facility lease at the Veracruz terminal in the third quarter of 2021.
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Sempra LNG
The decrease in earnings of $70 million in the three months ended September 30, 2021 compared to the same period in 2020 was primarily due to:
▪$65 million lower earnings from marketing operations, primarily driven by changes in natural gas prices; and
▪$11 million lower net interest income from lower intercompany balances with Parent and other; offset by
▪$15 million higher equity earnings from Cameron LNG JV primarily due to the three-train liquefaction project achieving full commercial operations in August 2020.
The decrease in earnings of $13 million (6%) in the nine months ended September 30, 2021 compared to the same period in 2020 was primarily due to:
▪$122 million lower earnings from marketing operations due to losses in 2021 compared to gains in 2020, primarily driven by changes in natural gas prices;
▪$8 million lower net interest income from lower intercompany balances with Parent and other; and
▪$8 million of certain non‐capitalizable expenses at ECA LNG Phase 1 in 2021, which reached a final investment decision in November 2020; offset by
▪$115 million higher equity earnings from Cameron LNG JV primarily due to the three-train liquefaction project achieving full commercial operations in August 2020; and
▪$22 million income tax benefit in 2021 from the remeasurement of certain deferred income taxes.operating leases.
Parent and Other
The decrease in losses of $28$23 million (22%(24%) in the three months ended September 30, 20212022 compared to the same period in 20202021 was primarily due to:
▪$37 million lower preferred dividends primarily as a result of $36 million lower dividends due to the mandatory conversion of all series A preferred stock and series B preferred stock in January 2021 and July 2021, respectively; and
▪$15 million lower net interest expense; offset by
▪$1812 million income tax expense in 2021 compared to a $2 million income tax benefit in 2020 primarily duefrom changes to a valuation allowance against certain tax credit carryforwards;
▪$9 million higher income tax benefit from the interim period application of an annual forecasted consolidated ETR; and
▪$102 million lowerincome tax benefit in 2022 compared to $2 million income tax expense in 2021 for repatriation of foreign earnings; offset by
▪$11 million net investment gainslosses in 2022 on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation obligations.
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The decreaseincrease in losses of $289$134 million in the nine months ended September 30, 20212022 compared to the same period in 20202021 was primarily due to:
▪$120 million deferred income tax expense associated with the change in our indefinite reinvestment assertion related to our foreign subsidiaries, which we discuss in Note 1 of the Notes to Condensed Consolidated Financial Statements;
▪$48 million net investment losses in 2022 compared to $17 million net investment gains in 2021 on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation obligations; and
▪$50 million equity earnings in 2021 compared to $100 million equity losses in 2020 related to our investment in RBS Sempra Commodities to settle pending VAT matters and related legal costs, which we discuss in Note 11 of the Notes to Condensed Consolidated Financial Statements;costs; offset by
▪$6930 million income tax benefit in 2022 compared to $12 million income tax expense in 2021 from changes to a valuation allowance against certain tax credit carryforwards;
▪$22 million higher income tax benefit from the interim period application of an annual forecasted consolidated ETR;
▪$19 million lower preferred dividends as a result of $88 million lower dividends due to the mandatory conversion of all series A preferred stock and series B preferred stock in January 2021 and July 2021, respectively, offset by $19 million higher dividends due to the issuance of series C preferred stock in June 2020;2021;
▪$4812 million lower net interest expense;
▪$22 million lower operating costs retained at Parent and other; and
▪$9 million higher net investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation obligations; offset by
▪$25 million higher income tax expense primarily due to:
◦$8 million higher income tax expense due to a valuation allowance against certain tax credit carryforwards,
◦$6 million higher consolidated California state income tax expense associated with income from our investments in Sempra LNG entities, and
◦$5 million lower income tax benefit related to share-based compensation.
Discontinued Operations
Discontinued operations that were previously in our Sempra South American Utilities segment include our former 100% interest in Chilquinta Energía in Chile, our former 83.6% interest in Luz del Sur in Peru and our former interests in two energy-services companies, Tecnored and Tecsur, which provide electric construction and infrastructure services to Chilquinta Energía and Luz del Sur, respectively, as well as third parties. Discontinued operations also include activities, mainly income taxes related to the
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South American businesses, that were previously included in the holding company of the South American businesses at Parent and other.
As we discuss in Note 5 of the Notes to Condensed Consolidated Financial Statements, we completed the sales of our South American businesses in the second quarter of 2020. On April 24, 2020, we sold our equity interests in our Peruvian businesses, including our 83.6% interest in Luz del Sur and its interest in Tecsur, for cash proceeds of $3,549 million, net of transaction costs and as adjusted for post-closing adjustments, and on June 24, 2020, we sold our equity interests in our Chilean businesses, including our 100% interest in Chilquinta Energía and Tecnored and our 50% interest in Eletrans, for cash proceeds of $2,216 million, net of transaction costs and as adjusted for post-closing adjustments.
Losses from discontinued operations of $7 million in the three months ended September 30, 2020 was due to a reduction to the gain on sale of our Chilean businesses as a result of post-closing adjustments.
Earnings from discontinued operations of $1,840 million in the nine months ended September 30, 2020 included:
▪$1,499 million gain on the sale of our Peruvian businesses;
▪$248 million gain on the sale of our Chilean businesses;
▪$98 million operational earnings prior to the sale of our Peruvian and Chilean businesses; and
▪$73 million income tax benefit relatedin 2022 compared to changes$2 million income tax expense in outside basis differences from earnings and2021 for repatriation of foreign currency effects.earnings.

SIGNIFICANT CHANGES IN REVENUES, COSTS AND EARNINGS
This section contains a discussion of the differences between periods in the specific line items of the Condensed Consolidated Statements of Operations for Sempra, SDG&E and SoCalGas.
Utilities Revenues and Cost of Sales
Our utilities revenues include natural gas revenues at our California UtilitiesSoCalGas and SDG&E and Sempra Mexico’sInfrastructure’s Ecogas and electric revenues at SDG&E. Intercompany revenues included in the separate revenues of each utility are eliminated in Sempra’s Condensed Consolidated Statements of Operations.
SoCalGas and SDG&E currently operate under a regulatory framework that permits:
▪The cost of natural gas purchased for core customers (primarily residential and small commercial and industrial customers) to be passed through to customers in rates substantially as incurred. SoCalGas’ Gas Cost Incentive Mechanism provides SoCalGas the opportunity to share in the savings and/or costs from buying natural gas for its core customers at prices below or above monthly market-based benchmarks. This mechanism permits full recovery of costs incurred when average purchase costs are within a price range around the benchmark price. Any higher costs incurred or savings realized outside this range are shared between the core customers and SoCalGas. We provide further discussion in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.
▪SDG&E to recover the actual cost incurred to generate or procure electricity based on annual estimates of the cost of electricity supplied to customers. The differences in cost between estimates and actual are recovered or refunded in subsequent periods through rates.
▪The California UtilitiesSoCalGas and SDG&E to recover certain program expenditures and other costs authorized by the CPUC, or “refundable programs.”
Because changes in SoCalGas’ and SDG&E’s cost of natural gas and/or electricity are recovered in rates, changes in these costs are offset in the changes in revenues and therefore do not impact earnings. In addition to the changes in cost or market prices, natural gas or electric revenues recorded during a period are impacted by customer billing cycles causing athe difference between customer billings and recorded or authorized costs.CPUC-authorized amounts. These differences are required to be balanced over time, resulting in over- and undercollected regulatory balancing accounts. We discuss balancing accounts and their effects further in Note 4 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.
The California Utilities’SoCalGas’ and SDG&E’s revenues are decoupled from, or not tied to, actual sales volumes. SoCalGas recognizes annual authorized revenue for core natural gas customers using seasonal factors established in the Triennial Cost Allocation Proceeding,a cost allocation proceeding, resulting in a significant portion of SoCalGas’ earnings being recognized in the first and fourth quarters of each year. SDG&E’s authorized revenue recognition is also impacted by seasonal factors, resulting in higher earnings in the third quarter when electric loads are typically higher than in the other three quarters of the year. We discuss this decoupling mechanism and its effects further in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.
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The table below summarizes utilities revenues and cost of sales.
UTILITIES REVENUES AND COST OF SALESUTILITIES REVENUES AND COST OF SALESUTILITIES REVENUES AND COST OF SALES
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
Natural gas revenues:Natural gas revenues:Natural gas revenues:
SoCalGasSoCalGas$1,106 $842 $3,738 $3,247 SoCalGas$1,385 $1,106 $4,879 $3,738 
SDG&ESDG&E157 134 585 498 SDG&E209 157 741 585 
Sempra Mexico17 12 61 42 
Sempra InfrastructureSempra Infrastructure19 17 67 61 
Eliminations and adjustmentsEliminations and adjustments(25)(23)(74)(62)Eliminations and adjustments(26)(25)(76)(74)
TotalTotal1,255 965 4,310 3,725 Total1,587 1,255 5,611 4,310 
Electric revenues:Electric revenues:Electric revenues:
SDG&ESDG&E1,307 1,338 3,534 3,478 SDG&E1,360 1,307 3,672 3,534 
Eliminations and adjustmentsEliminations and adjustments(2)(2)(5)(4)Eliminations and adjustments(3)(2)(9)(5)
TotalTotal1,305 1,336 3,529 3,474 Total1,357 1,305 3,663 3,529 
Total utilities revenuesTotal utilities revenues$2,560 $2,301 $7,839 $7,199 Total utilities revenues$2,944 $2,560 $9,274 $7,839 
Cost of natural gas(1):
Cost of natural gas(1):
Cost of natural gas(1):
SoCalGasSoCalGas$240 $92 $736 $476 SoCalGas$441 $240 $1,577 $736 
SDG&ESDG&E37 27 159 118 SDG&E65 37 260 159 
Sempra Mexico13 2 25 8 
Sempra InfrastructureSempra Infrastructure7 13 21 25 
Eliminations and adjustmentsEliminations and adjustments(8)(7)(28)(20)Eliminations and adjustments(8)(8)(23)(28)
TotalTotal$282 $114 $892 $582 Total505 282 1,835 892 
Cost of electric fuel and purchased power(1):
Cost of electric fuel and purchased power(1):
Cost of electric fuel and purchased power(1):
SDG&ESDG&E$324 $430 $869 $921 SDG&E316 324 806 869 
Eliminations and adjustmentsEliminations and adjustments(12)(1)(41)(3)Eliminations and adjustments(9)(12)(43)(41)
TotalTotal$312 $429 $828 $918 Total307 312 763 828 
Total utilities cost of salesTotal utilities cost of sales$812 $594 $2,598 $1,720 
(1)     Excludes depreciation and amortization, which are presented separately on the Sempra, SDG&E and SoCalGas Condensed Consolidated Statements of Operations.

Natural Gas Revenues and Cost of Natural Gas
The table below summarizes the average cost of natural gas sold by theSempra California Utilities and included in cost of natural gas. The average cost of natural gas sold at each utility is impacted by market prices, as well as transportation, tariff and other charges.
CALIFORNIA UTILITIES AVERAGE COST OF NATURAL GAS
SEMPRA CALIFORNIA AVERAGE COST OF NATURAL GASSEMPRA CALIFORNIA AVERAGE COST OF NATURAL GAS
(Dollars per thousand cubic feet)(Dollars per thousand cubic feet)(Dollars per thousand cubic feet)
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
SoCalGasSoCalGas$5.01 $1.95 $3.46 $2.21 SoCalGas$9.46 $5.01 $7.64 $3.46 
SDG&ESDG&E5.40 3.79 4.62 3.56 SDG&E10.20 5.40 7.74 4.62 
In the three months ended September 30, 2021,2022, our natural gas revenues increased by $290$332 million (30%(26%) to $1.3$1.6 billion compared to the same period in 20202021 primarily due to:
▪$264279 million increase at SoCalGas, which included:
◦$148201 million increase in cost of natural gas sold, which we discuss below,
◦$33 million higher non-service component of net periodic benefit cost in 2021, which fully offsets in Other (Expense) Income, net,
◦$3134 million higher recovery of costs associated with refundable programs, which revenues are offset in O&M,
◦$26 million higher CPUC-authorized revenues, and
◦$2017 million higher revenues from incremental and balanced capital projects; and
▪$2352 million increase at SDG&E, which included:
◦$1028 million increase in cost of natural gas sold, which we discuss below,
◦$614 million higher revenues primarilyrecovery of costs associated with PSEP,refundable programs, which revenues are offset in O&M, and
◦$37 million higher CPUC-authorized revenues.revenues from balanced capital projects.
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In the three months ended September 30, 2021,2022, our cost of natural gas increased by $168$223 million to $282$505 million compared to the same period in 20202021 primarily due to:
▪$148201 million increase at SoCalGas primarily due to higher average natural gas prices; and
▪$1028 million increase at SDG&E primarily due to higher average natural gas prices.
In the nine months ended September 30, 2021,2022, our natural gas revenues increased by $585 million (16%$1.3 billion (30%) to $4.3$5.6 billion compared to the same period in 20202021 primarily due to:
▪$491 million1.1 billion increase at SoCalGas, which included:
◦$260841 million increase in cost of natural gas sold, which we discuss below,
◦$116 million higher recovery of costs associated with refundable programs, which revenues are offset in O&M,
◦$94107 million higher CPUC-authorized revenues,
◦$6250 million higher revenues from incremental and balanced capital projects, and
◦$2625 million higher non-service component of net periodic benefit costrevenues associated with impacts resulting from changes in 2021, which fully offsets in Other (Expense), Income, net, offset by
◦$84 million decrease due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to trackingtax laws tracked in the income tax expense memorandum account; and
▪$87156 million increase at SDG&E, which included:
◦$41101 million increase in cost of natural gas sold, which we discuss below,
◦$1726 million higher recovery of costs associated with refundable programs, which revenues are offset in O&M,
◦$1720 million higher CPUC-authorized revenues from balanced capital projects, and
◦$147 million higher revenues primarily associated with PSEP, offset by
◦$6 million decrease due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account.CPUC-authorized revenues.
In the nine months ended September 30, 2021,2022, our cost of natural gas increased by $310$943 million (53%) to $892 million$1.8 billion compared to the same period in 20202021 primarily due to:
▪$260841 million increase at SoCalGas primarily due to higher average natural gas prices; and
▪$41101 million increase at SDG&E primarily due to higher average natural gas prices.
Electric Revenues and Cost of Electric Fuel and Purchased Power
In the three months ended September 30, 2021, our electric revenues, substantially all of which are at SDG&E, decreased by $31 million (2%), remaining at $1.3 billion compared to the same period in 2020 primarily due to:
▪$106 million lower cost of electric fuel and purchased power, which we discuss below; and
▪$12 million lower recovery of costs associated with refundable programs, which revenues are offset in O&M; offset by
▪$36 million charge in 2020 for amounts expected to be refunded to customers related to the Energy Efficiency Program inquiry;
▪$15 million higher revenues associated with SDG&E’s wildfire mitigation plan;
▪$13 million higher CPUC-authorized revenues;
▪$9 million higher revenues associated with lower income tax benefits from flow-through items;
▪$5 million higher revenue from transmission operations; and
▪$5 million higher revenues associated with a new customer information system.
Our utility cost of electric fuel and purchased power decreased by $117 million (27%) to $312 million in the three months ended September 30, 2021 compared to the same period in 2020 due to:
▪$106 million at SDG&E primarily due to higher purchased power costs caused by increased demand in 2020 and a decrease in residential demand in 2021 from an increase in rooftop solar adoption; and
▪$11 million higher intercompany eliminations associated with sales between SDG&E and Sempra Mexico due to the acquisition of ESJ in March 2021.
In the nine months ended September 30, 2021,2022, our electric revenues, substantially all of which are at SDG&E, increased by $55$52 million (2%(4%), remaining at $3.5 to $1.4 billion compared to the same period in 20202021 primarily due to:
▪$7830 million higher recovery of costs associated with refundable programs, which revenues are offset in O&M;
▪$5124 million charge in 2020 for amounts expected to be refunded to customers related to the Energy Efficiency Program inquiry;higher CPUC-authorized revenues; and
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▪$3315 million higher revenues associated with SDG&E’s wildfire mitigation plan; offset by
▪$8 million lower cost of electric fuel and purchased power, which we discuss below; and
▪$8 million lower revenues associated with higher income tax benefits from flow-through items.
Our utility cost of electric fuel and purchased power includes utility-owned generation, power purchased from third parties, and net power purchases and sales to the California ISO. In the three months ended September 30, 2022, the cost of electric fuel and purchased power decreased by $5 million (2%) to $307 million compared to the same period in 2021 primarily due to $8 million at SDG&E from higher sales to the California ISO due to higher market prices offset by higher purchased power from the California ISO due to higher market prices, net of lower customer demand due to departing load now served by CCAs, and higher utility-owned generation costs.
In the nine months ended September 30, 2022, our electric revenues, substantially all of which are at SDG&E, increased by $134 million (4%) to $3.7 billion compared to the same period in 2021 primarily due to:
▪$67 million higher recovery of costs associated with refundable programs, which revenues are offset in O&M;
▪$55 million higher CPUC-authorized revenues;
▪$3347 million higher revenues associated with SDG&E’s wildfire mitigation plan;
▪$1521 million higher revenues from transmission operations; and
▪$6 million higher revenues associated with lower income tax benefits from flow-through items; and
▪$8 million higher revenues associated with a new customer information system; offset by
▪$77 million decrease due to the release of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account;
▪$5263 million lower cost of electric fuel and purchased power, which we discuss below;below.
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▪$22 million lower revenues due to favorable resolutionTable of regulatory matters in 2020; andContents
▪$13 million lower revenues from transmission operations, includingIn the following favorable impacts in 2020 related tonine months ended September 30, 2022, the March 2020 FERC-approved TO5 settlement proceeding:
◦$26 million to settle a rate base matter, and
◦$12 million impact from the retroactive application of the final TO5 settlement for 2019.
Our utility cost of electric fuel and purchased power decreased by $90$65 million (10%(8%) to $828$763 million in the nine months ended September 30, 2021 compared to the same period in 20202021 primarily due to:
▪$52to $63 million at SDG&E primarilyfrom higher sales to the California ISO due to higher market prices offset by higher purchased power costs caused by increased demand in 2020 and a decrease in residential demand in 2021 from an increase in rooftop solar adoption; and
▪$38 million higher intercompany eliminations associated with sales between SDG&E and Sempra Mexicothe California ISO due to the acquisitionhigher market prices, net of ESJ in March 2021.lower customer demand due to departing load now served by CCAs, and higher utility-owned generation costs.
Energy-Related Businesses: Revenues and Cost of Sales
The table below shows revenues and cost of sales for our energy-related businesses.
ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALESENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALESENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30, Three months ended September 30,Nine months ended September 30,
2021202020212020 2022202120222021
REVENUES  
Sempra Mexico$580 $339 $1,307 $893 
Sempra LNG119 63 367 255 
Revenues:Revenues:  
Sempra InfrastructureSempra Infrastructure$678 $462 $1,743 $1,208 
Parent and other(1)
Parent and other(1)
(246)(59)(500)(148)
Parent and other(1)
(5)(9)(33)(34)
Total revenuesTotal revenues$453 $343 $1,174 $1,000 Total revenues$673 $453 $1,710 $1,174 
COST OF SALES(2)
  
Sempra Mexico$247 $89 $488 $202 
Sempra LNG207 62 419 145 
Cost of sales(2):
Cost of sales(2):
  
Sempra InfrastructureSempra Infrastructure$340 $219 $764 $446 
Parent and other(1)
Parent and other(1)
(234)(61)(459)(147)
Parent and other(1)
— 1 — 2 
Total cost of salesTotal cost of sales$220 $90 $448 $200 Total cost of sales$340 $220 $764 $448 
(1)    Includes eliminations of intercompany activity.
(2)    Excludes depreciation and amortization, which are presented separately on Sempra’s Condensed Consolidated Statements of Operations.

In the three months ended September 30, 2021,2022, revenues from our energy-related businesses increased by $110$220 million (32%(49%) to $453$673 million compared to the same period in 20202021 primarily due to:
▪$241168 million increase at Sempra Mexico primarily due to:in revenues from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:
◦$154144 million increase from the marketing business primarilyhigher natural gas prices and lower unrealized losses on commodity derivatives offset by lower volumes, and
◦$24 million from higher diversion fees due to higher natural gas prices and volumes,prices;
◦▪$4551 million higher revenues from TdM mainly due to higher power prices;
▪$11 million higher transportation revenues driven by higher rates; and
▪$10 million higher revenues from the Veracruzrenewables business due to higher transmission rates and Mexico City terminalsthe second phase of ESJ being placed in service in March and July of 2021, respectively, includingJanuary 2022; offset by
▪$25 million lower revenues due to a $16 million selling profit on a sales-type lease relating to the commencement of a rail facility lease at the Veracruz terminal in the third quarter of 2021
◦$20 million higher revenues from TdM primarily due to unrealized gains on commodity derivatives in 2021 compared to unrealized losses in 2020 and higher volumes and power prices, and
◦$8 million increase from the renewables business primarily due to the acquisitiona remeasurement of ESJ in March 2021 and renewable assets placed in service in December 2020 and March 2021; and
▪$56 million increase at Sempra LNG primarily due to:
◦$122 million increase from LNG marketing operations primarily from higher natural gas and LNG cargo sales to Sempra Mexico mainly as a result of higher natural gas prices and volumes, offset by
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◦$68 million decrease from natural gas marketing operations primarily due to higher losses in 2021 compared to 2020, mainly driven by changes in natural gas prices, offset by
▪$187 million decrease primarily from higher intercompany eliminations associated with sales between Sempra LNG and Sempra Mexico.an operating lease.
In the three months ended September 30, 2021,2022, the cost of sales for our energy-related businesses increased by $130$120 million to $220$340 million compared to the same period in 2020 primarily due to:
▪$158 million increase at Sempra Mexico2021 primarily due to higher natural gas prices related to asset and volumessupply optimization and higher prices at the marketing business and at TdM; and
▪$145 million increase at Sempra LNG mainly from natural gas marketing activities due to higher natural gas purchases; offset by
▪$173 million decrease primarily from higher intercompany eliminations associated with sales between Sempra LNG and Sempra Mexico.TdM.
In the nine months ended September 30, 2021,2022, revenues from our energy-related businesses increased by $174$536 million (17%(46%) to $1.2$1.7 billion compared to the same period in 20202021 primarily due to:
▪$414365 million increase at Sempra Mexico primarily due to:in revenues from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:
◦$277301 million increase from the marketing business primarilyhigher natural gas prices and lower unrealized losses on commodity derivatives offset by lower volumes, and
◦$64 million from higher diversion fees due to higher natural gas prices and volumes,prices;
◦▪$5465 million higher revenues from TdM mainly due to higher power prices offset by lower volumes from scheduled major maintenance completed in March 2022, which resulted in increased plant reliability;
▪$46 million higher revenues from the renewables business due to Border Solar and the second phase of ESJ being placed in service in March 2021 and January 2022, respectively, the acquisition of ESJ in March 2021 and higher transmission rates;
▪$46 million higher transportation revenues driven by higher rates; and
▪$3 million higher revenues from the Veracruz and Mexico City terminals placed in service in March and July of 2021, respectively, includingoffset by a $16 million selling profit on a sales-type lease relating to the commencement of a rail facility lease at the Veracruz terminal in the third quarter of 2021 and a remeasurement of an operating lease.
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◦$31 million increase from the renewables business primarily due to the acquisitionTable of ESJ in March 2021 and renewable assets placed in service in December 2020 and March 2021, andContents
◦$29 million higher revenues from TdM mainly due to higher volumes and power prices, offset by unrealized losses on commodity derivatives in 2021 compared to unrealized gains in 2020; and
▪$112 million increase at Sempra LNG primarily due to:
◦$232 million increase from LNG marketing operations primarily from higher natural gas and LNG cargo sales to Sempra Mexico mainly as a result of higher natural gas prices and volumes, offset by
◦$121 million decrease from natural gas marketing operations primarily due to losses in 2021 compared to gains in 2020, mainly driven by changes in natural gas prices; offset by
▪$352 million decrease primarily from higher intercompany eliminations associated with sales between Sempra LNG and Sempra Mexico.
In the nine months ended September 30, 2021,2022, the cost of sales for our energy-related businesses increased by $248$316 million to $448$764 million compared to the same period in 2020 primarily due to:
▪$286 million increase at Sempra Mexico2021 primarily due to higher natural gas prices and volumes at the marketing businesshigher LNG purchases related to asset and at TdM;supply optimization and
▪$274 million increase at Sempra LNG mainly from natural gas marketing activities primarily due to higher natural gas purchases; prices offset by
▪$312 million decrease primarily lower volumes from higher intercompany eliminations associated with sales between Sempra LNG and Sempra Mexico.scheduled major maintenance completed in March 2022 at TdM.
Operation and Maintenance
In the three months ended September 30, 2021,2022, O&M increased by $55$133 million (5%(12%) to $1.1$1.2 billion compared to the same period in 20202021 primarily due to:
▪$5250 million increase at SoCalGas primarilySDG&E due to:
◦$3144 million higher expenses associated with refundable programs, which costs incurred are recovered in revenue, and
◦$216 million higher non-refundable operating costs;
▪$1644 million increase at Sempra Mexico primarily from the renewables business, including the acquisition of ESJ in March 2021; and
▪$15 million increase at Sempra LNG primarily due to the timing of employee benefit expenses and certain non-capitalizable expenses at ECA LNG Phase 1 in 2021, which reached a final investment decision in November 2020; offset by
▪$25 million decrease at SDG&E primarilySoCalGas due to:
◦$1434 million lower non-refundable operating costs, and
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◦$11 million lowerhigher expenses associated with refundable programs, which costs incurred are recovered in revenue.revenue, and
◦$10 million higher non-refundable operating costs; and
▪$37 million increase at Sempra Infrastructure due to:
◦$16 million higher development costs and purchased services,
◦$9 million at the transportation business due to higher pipeline and compressor station maintenance and higher administrative costs, and
◦$6 million at the refined products terminals due to lower capitalized cost.
In the nine months ended September 30, 2021,2022, O&M increased by $331$356 million (12%(11%) to $3.1$3.5 billion compared to the same period in 20202021 primarily due to:
▪$175172 million increase at SoCalGas primarily due to:
◦$116 million higher expenses associated with refundable programs, which costs incurred are recovered in revenue, and
◦$5956 million higher non-refundable operating costs;
▪$102104 million increase at SDG&E primarily due to:
◦$9593 million higher expenses associated with refundable programs, which costs incurred are recovered in revenue, and
◦$711 million higher non-refundable operating costs;
▪$44 million increase at Sempra Mexico primarily from the renewables business, including the acquisition of ESJ in March 2021, and expenses associated with the growth in the business; and
▪$2489 million increase at Sempra LNGInfrastructure due to:
◦$22 million due to the start of commercial operations of the Veracruz and Mexico City terminals in March and July of 2021, respectively,
◦$22 million at the transportation business due to higher pipeline and compressor station maintenance and higher administrative costs,
◦$21 million higher development costs and purchased services,
◦$19 million from the renewables business primarily due to certain non-capitalizable expensesconstruction repairs and maintenance at ECA LNG Phase 1Ventika, and
◦$11 million higher operating costs at TdM from higher purchased materials and services due to scheduled major maintenance completed in 2021, which reached a final investment decision in November 2020, and expected credit losses associated withMarch 2022, offset by
◦$14 million lower operating cost due to remeasurement of operating leases at the guarantee related to Cameron LNG JV’s SDSRA;refined products terminals; offset by
▪$189 million decrease at Parent and other primarily from lower retained operating costs offset by higher deferred compensation expense.
Aliso Canyon Litigation and Regulatory Matters
In the three months and nine months ended September 30, 2021,2022, SoCalGas recorded a chargecharges of $1,571$122 million relatedand $259 million, respectively, relating to agreements associated with civil litigation against SoCalGas and Sempraregulatory matters pertaining to the Leak, which weLeak. We describe these charges in Note 11 of the Notes to Condensed Consolidated Financial Statements. In the three months and nine months ended September 30, 2020,2021, SoCalGas recorded chargesa charge of $27$1,571 million and $127 million, respectively, relatedrelating to civil litigation and regulatory matters pertaining to the Leak.
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Other (Expense) Income, Net
As part of our central risk management function, we may enter into foreign currency derivatives to hedge Sempra Mexico parent’sSI Partners’ exposure to movements in the Mexican peso from its controlling interest in IEnova. The gains/losses associated with these derivatives are included in Other (Expense) Income, Net, as described below, and partially mitigate the transactional effects of foreign currency and inflation included in Income Tax Expense for Sempra Mexico’sSI Partners’ consolidated entities and in Equity Earnings for Sempra Mexico’sSI Partners’ equity method investments. We also utilized foreign currency derivatives in 2020 to hedge exposure to fluctuations in the Peruvian sol and Chilean peso related to the sales of our operations in Peru and Chile, respectively. We discuss policies governing our risk management in “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report.
Other expense, net, inIn the three months ended September 30, 2021 was $552022, other expense, net, decreased by $15 million (27%) to $40 million compared to other income, net, of $29 million in the same period in 2020. The change was2021 primarily due to:
▪$201 million net lossesgains in 20212022 from impacts associated with interest rate and foreign exchange instruments and foreign currency transactions compared to $20 million net gains of $34 million for the same periodlosses in 2020 primarily due to:2021, including:
◦$18 million in foreign currency losses in 2021 compared to $15 million foreign currency gains in 2020 on a Mexican peso-denominated loan to IMG, JV, which is offset in Equity Earnings, and
◦$3 million losseshigher net gains in 20212022 on other foreign currency derivatives and cross-currency swaps compared to $19 million gains for the same period in 2020 as a result of fluctuation of the Mexican peso;transactional effects;
▪$185 million higher net interest income on regulatory balancing accounts at SDG&E and SoCalGas; and
▪$4 million higher AFUDC equity at SDG&E; offset by
▪$13 million investment losses in 2022 on dedicated assets in support of our executive retirement and deferred compensation plans; and
▪$11 million higher non-service component of net periodic benefit costcost.
Other expense, net, in 2021; andthe nine months ended September 30, 2022 was $3 million compared to other income, net, of $52 million in the same period in 2021 primarily due to:
▪$1660 million lowerinvestment losses in 2022 compared to $28 million investment gains in 2021 on dedicated assets in support of our executive retirement and deferred compensation plans; and
▪$10 million in penalties at SoCalGas related to the energy efficiency and advocacy OSCs; offset by
▪$6 million fine at SDG&E in 2020 related to the Energy Efficiency Program inquiry.
Other income, net, in the nine months ended September 30, 2021 was $52 million compared to other expense, net, of $163 million in the same period in 2020. The change was primarily due to:
▪$18820 million lower net losses from impacts associated with interest rate and foreign exchange instruments and foreign currency transactions, primarily due to:including:
◦$1073 million lower foreign currencygains in 2022 on cross-currency swaps compared to $26 million losses on a Mexican peso-denominated loan to IMG JV, which is offset in Equity Earnings, and
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◦$101 million lower losses2021 on foreign currency derivatives and cross-currency swaps as a result of fluctuation of the Mexican peso;peso, and
◦$2 million lower foreign currency losses on a Mexican peso-denominated loan to IMG, which is offset in Equity Earnings, offset by
◦$227 million lowerlosses in 2022 compared to $3 million net gains in 2021 on other foreign currency transactional effects;
▪$19 million higher investment gains on dedicated assets in support of our executive retirement and deferred compensation plans;
▪$7 million higher AFUDC equity at SoCalGas; and
▪$6 million fine at SDG&E in 2020 related to the Energy Efficiency Program inquiry; offset by
▪$8 million decrease in regulatory interest at the California Utilities due to the releaselower non-service component of a regulatory liability in 2020 related to 2016-2018 forecasting differences that are not subject to tracking in the income tax expense memorandum account;net periodic benefit cost; and
▪$7 million higher non-service component of net periodic benefit costinterest income on regulatory balancing accounts at SDG&E and SoCalGas.
Interest Expense
In the three months ended September 30, 2022 interest expense increased by $23 million (9%) to $282 million compared to the same period in 2021 primarily due to:
▪$11 million increase at SoCalGas due to higher debt balances primarily due to an issuance in March 2022; and
▪$9 million increase at SDG&E due to higher debt balances due to issuances in March 2022 and August 2021.
In the nine months ended September 30, 2022, interest expense increased by $20 million (3%) to $796 million compared to the same period in 2021 primarily due to:
▪$26 million increase at SDG&E due to higher debt balances due to issuances in March 2022 and August 2021;
▪$17 million increase at SoCalGas due to higher debt balances due to an issuance in March 2022; and
▪$10 million increase at Parent and other due to higher debt balances due to issuances in March 2022 and November 2021, offset by the early redemption of debt securities in December 2021; offset by
▪$33 million decrease at Sempra Infrastructure primarily due to the early redemption of debt securities in 2021 and higher capitalized interest for ECA LNG Phase 1 offset by a debt issuance in January 2022.
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Income Taxes
The table below shows the income tax expense (benefit) expense and ETRs for Sempra, SDG&E and SoCalGas.
INCOME TAX (BENEFIT) EXPENSE AND EFFECTIVE INCOME TAX RATES
INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATESINCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)(Dollars in millions)(Dollars in millions)
Three months ended September 30,Nine months ended September 30,Three months ended September 30,Nine months ended September 30,
20212020202120202022202120222021
Sempra:Sempra:Sempra:
Income tax (benefit) expense from continuing operations$(342)$99 $(45)$60 
Income tax expense (benefit)Income tax expense (benefit)$21 $(342)$435 $(45)
(Loss) income from continuing operations before income taxes
and equity earnings
$(1,365)$201 $(316)$1,061 
Income (loss) before income taxes and equity earningsIncome (loss) before income taxes and equity earnings$165 $(1,365)$1,194 $(316)
Equity earnings, before income tax(1)
Equity earnings, before income tax(1)
137 117 457 158 
Equity earnings, before income tax(1)
134 137 436 457 
Pretax (loss) income$(1,228)$318 $141 $1,219 
Pretax income (loss)Pretax income (loss)$299 $(1,228)$1,630 $141 
Effective income tax rateEffective income tax rate28 %31 %(32)%5 %Effective income tax rate7 %28 %27 %(32)%
SDG&E:SDG&E:SDG&E:
Income tax expenseIncome tax expense$90 $33 $168 $161 Income tax expense$35 $90 $141 $168 
Income before income taxesIncome before income taxes$295 $211 $771 $794 Income before income taxes$306 $295 $822 $771 
Effective income tax rateEffective income tax rate31 %16 %22 %20 %Effective income tax rate11 %31 %17 %22 %
SoCalGas:SoCalGas:SoCalGas:
Income tax (benefit) expenseIncome tax (benefit) expense$(437)$(6)$(335)$95 Income tax (benefit) expense$(28)$(437)$75 $(335)
(Loss) income before income taxes(Loss) income before income taxes$(1,563)$(30)$(959)$521 (Loss) income before income taxes$(110)$(1,563)$415 $(959)
Effective income tax rateEffective income tax rate28 %20 %35 %18 %Effective income tax rate25 %28 %18 %35 %
(1)    We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.
Sempra
Sempra’s income tax benefitexpense in the three months ended September 30, 20212022 compared to an income tax expensebenefit in the same period in 20202021 was primarily due to:
▪$43921 million income tax benefit in 2022 compared to $439 million income tax benefit in 2021 comparedassociated with charges relating to $5litigation and regulatory matters pertaining to the Leak; and
▪$4 million income tax benefit in 2020 associated with the Aliso Canyon natural gas storage facility litigation and regulatory matters; and
▪$332022 compared to $33 million income tax benefit in 2021 compared to $44 million income tax expense in 2020 from foreign currency and inflation effects on our monetary positions in Mexico and associated derivatives; offset by
▪lower$18 million higher income tax benefitsbenefit in 2022 from the resolution of prior year income tax items at SDG&E;
▪$12 million income tax expense in 2021 from changes to a valuation allowance against certain tax credit carryforwards;
▪$8 million favorable U.S. tax impact in 2022 from converting SI Partners from a corporation to a partnership in October 2021; and
▪higher income tax benefit from flow-through items.
Sempra’s income tax benefitexpense in the nine months ended September 30, 20212022 compared to an income tax expensebenefit in the same period in 20202021 was primarily due to:
▪$43960 million income tax benefit in 2022 compared to $439 million income tax benefit in 2021 associated with charges relating to litigation and regulatory matters pertaining to the Leak;
▪$120 million deferred income tax expense associated with the change in our indefinite reinvestment assertion related to our foreign subsidiaries, which we discuss in Note 1 to Condensed Consolidated Financial Statements; and
▪$80 million income tax expense in 2022 compared to $33$8 million income tax expense in 2021 from foreign currency and inflation effects on our monetary positions in Mexico and associated derivatives; offset by
▪$30 million income tax benefit in 2020 associated with the Aliso Canyon natural gas storage facility litigation and regulatory matters;2022 compared to $12 million income tax expense in 2021 from changes to a valuation allowance against certain tax credit carryforwards;
▪$2226 million favorable U.S. tax impact in 2022 from converting SI Partners from a corporation to a partnership in October 2021;
▪$18 million higher net income tax benefit in 20212022 from the remeasurement of certain deferred income taxes;
▪$18 million higher income tax benefit in 2022 from the resolution of prior year income tax items at SDG&E; and
▪higher income tax benefitsbenefit from flow-through items; offset by
▪$8 million income tax expense in 2021 compared to $263 million income tax benefit in 2020 from foreign currency and inflation effects and associated derivatives; anditems.
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▪$11 million lower income tax benefit related to share-based compensation.
We discuss the impact of foreign currency exchange rates and inflation on income taxes below in “Impact of Foreign Currency and Inflation Rates on Results of Operations.” See Note 1 of the Notes to Condensed Consolidated Financial Statements in this report and Notes 1 and 8 of the Notes to Consolidated Financial Statements in the Annual Report for further details about our accounting for income taxes and items subject to flow-through treatment.
SDG&E
SDG&E’s income tax expense increased inIn the three months ended September 30, 20212022, SDG&E’s income tax expense decreased by $55 million compared to the same period in 20202021 primarily due to higher pretax income and lower income tax benefits from flow-through items and $18 million higher income tax benefit from the resolution of prior year income tax items.
In the nine months ended September 30, 2022, SDG&E’s income tax expense increaseddecreased by $27 million (16%) compared to the same period in 2021 primarily due to:
▪higher income tax benefits from flow-through items; and
▪$18 million higher income tax benefit from the resolution of prior year income tax items; offset by
•higher income tax expense from higher pretax income.
SoCalGas
In the three months ended September 30, 2022, SoCalGas’ income tax benefit decreased by $409 million compared to the same period in 2021 primarily due to a $21 million income tax benefit in 2022 compared to a $439 million income tax benefit in 2021 associated with charges relating to litigation and regulatory matters pertaining to the Leak.
SoCalGas’ income tax expense in the nine months ended September 30, 20212022, compared to an income tax benefit in the same period in 20202021 was primarily due to lower income tax benefits from flow-through items.
SoCalGas
SoCalGas’a $60 million income tax benefit increased in the three months ended September 30, 20212022 compared to the same period in 2020 primarily due toa $439 million income tax benefit in 2021 compared to $5 million income tax benefit in 2020 associated with the Aliso Canyon natural gas storage facilitycharges relating to litigation and regulatory matters.
SoCalGas’ income tax benefit inmatters pertaining to the nine months ended September 30, 2021 compared to an income tax expense in the same period in 2020 was primarily due to $439 million income tax benefit in 2021 compared to $33 million income tax benefit in 2020 associated with the Aliso Canyon natural gas storage facility litigation and regulatory matters.Leak.
Equity Earnings
In the three months ended September 30, 2021,2022, equity earnings increased by $65$26 million (20%(7%) to $391$417 million compared to the same period in 20202021 primarily due to:
▪$4050 million higher equity earnings at Oncor Holdings due to higher revenues from higher customer consumption attributable to weather and customer growth, rate updates to reflect increases in invested capital, and from an annual energy efficiency program performance bonus approved in the third quarter of 2022 compared to the fourth quarter of 2021, offset by higher depreciation, property taxes and interest expense attributable to invested capital and higher operation and maintenance expense; offset by
▪$21 million lower equity earnings at IMG JV, primarily due to foreign currency effects, including $18 million foreign currency gains in 2021 compared to $15 million foreign currency losses in 2020 on IMG JV’sIMG’s Mexican peso-denominated loans from its JV owners, which is fully offset in Other (Expense) Income, Net;Net, and higher income tax expense, offset by lower interest expense.
In the nine months ended September 30, 2022, equity earnings increased by $96 million (9%) to $1.1 billion compared to the same period in 2021 primarily due to:
▪$123 million higher equity earnings at Oncor Holdings due to higher revenues from rate updates to reflect increases in invested capital, higher customer consumption attributable to weather and customer growth and from an annual energy efficiency program performance bonus approved in the third quarter of 2022 compared to the fourth quarter of 2021, offset by higher depreciation, property taxes and interest expense attributable to invested capital and higher operation and maintenance expense; and
▪$2126 million higher equity earnings at Cameron LNG JV primarily due to the three-train liquefaction project achieving full commercial operations in August 2020.higher maintenance revenues;
In the nine months ended September 30, 2021, equity earnings increasedoffset by $200 million (24%) to $1.0 billion compared to the same period in 2020 primarily due to:
▪$50 million equity earnings in 2021 compared to $100 million equity losses in 2020 related to our investment in RBS Sempra Commodities to settle pending VAT matters and related legal costs;
▪$147 million higher equity earnings at Cameron LNG JV primarily due to the three-train liquefaction project achieving full commercial operations in August 2020; and
▪$23 million higher equity earnings at Oncor Holdings primarily due to higher revenues from rate updates to reflect increases in invested capital and customer growth, offset by increased operating costs and expenses attributable to invested capital, and lower revenues due to an annual energy efficiency program performance bonus recognized in 2020, but pending PUCT approval in 2021; offset by
▪$122 million lower equity earnings at Sempra Mexico, which included:
◦$1037 million lower equity earnings at IMG JV, primarily due to higher income tax expense and foreign currency effects, including $107$2 million lower foreign currency gains on IMG JV’sIMG’s Mexican peso-denominated loans from its JV owners, which is fully offset in Other (Expense) Income, Net, and
◦$15 millionoffset by lower equity earnings at TAG JV primarily due to income tax expense in 2021 compared to a benefit in 2020.interest expense.
Earnings Attributable to Noncontrolling Interests
In the three months ended September 30, 2021,2022, earnings attributable to NCI decreasedincreased by $17$60 million to $5$65 million compared to the same period in 2020 primarily2021 due to theto:
▪$77 million increase as a result of a decrease in our ownership interest in SI Partners offset by an increase in our ownership interest in IEnova asIEnova; offset by
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▪$17 million decrease due to a result of the exchange offer and subsequent cash tender offer, which we discussdecrease in Note 1 of the Notes to Condensed Consolidated Financial Statements, offset by an increase mainly from foreign currency effects as a result of fluctuation of the Mexican peso.SI Partners subsidiaries net income.
In the nine months ended September 30, 2021,2022, earnings attributable to NCI decreasedincreased by $153$139 million to $48$187 million compared to the same period in 20202021 primarily due to lower earnings at Sempra Mexico and from theto:
▪$134 million increase as a result of a decrease in our ownership interest in SI Partners offset by an increase in our ownership interest in IEnova as a result of the exchange offerIEnova; and subsequent cash tender offer.
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▪$4 million increase due to an increase in SI Partners subsidiaries net income.

Preferred Dividends
In the three months ended September 30, 2021, preferred dividends decreased by $37 million to $11 million compared to the same period in 2020 primarily due to the mandatory conversion of all series A preferred stock and series B preferred stock in January 2021 and July 2021, respectively.
In the nine months ended September 30, 2021,2022, preferred dividends decreased by $69$19 million to $52$33 million compared to the same period in 2020 primarily2021 due to the mandatory conversion of all series A preferred stock and series B preferred stock in January 2021 and July 2021, respectively, offset by the issuance of series C preferred stock in June 2020.2021.

IMPACT OF FOREIGN CURRENCY AND INFLATION RATES ON RESULTS OF OPERATIONS
Because our natural gas distribution utility in Mexico, Ecogas, uses its local currency as its functional currency, revenues and expenses are translated into U.S. dollars at average exchange rates for the period for consolidation in Sempra’s results of operations. Prior to the sales of our South American businesses in 2020, our operations in South America used their local currency as their functional currency. We discuss further the impact of foreign currency and inflation rates on results of operations, including impacts on income taxes and related hedging activity, in “Part II – Item 7. MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations” in the Annual Report.
Foreign Currency Translation
Any difference in average exchange rates used for the translation of income statement activity from year to year can cause a variance in Sempra’s comparative results of operations. In the three months and nine months ended September 30, 2021,2022, the change in our earnings as a result of foreign currency translation rates was not materialnegligible compared to the same period in 2020.2021.
Transactional Impacts
Income statement activities at our foreignMexico operations and their JVs are also impacted by transactional gains and losses, a summary of which is shown in the table below:
TRANSACTIONAL (LOSSES) GAINS FROM FOREIGN CURRENCY AND INFLATION EFFECTS AND ASSOCIATED DERIVATIVES
(Dollars in millions)
 Total reported amountsTransactional (losses) gains included in reported amounts
 Three months ended September 30,
 2021202020212020
Other (expense) income, net$(55)$29 $(20)$34 
Income tax benefit (expense)342 (99)33 (44)
Equity earnings391 326 16 (23)
(Loss) income from continuing operations, net of income tax(632)428 29 (33)
(Loss) income from discontinued operations, net of income tax— (7)— — 
Earnings attributable to noncontrolling interests(5)(22)(1)15 
(Losses) earnings attributable to common shares(648)351 28 (18)
 Nine months ended September 30,
 2021202020212020
Other (expense) income, net$52 $(163)$(36)$(224)
Income tax benefit (expense)45 (60)(8)263 
Equity earnings1,022 822 — 141 
(Loss) income from continuing operations, net of income tax751 1,823 (44)180 
(Loss) income from discontinued operations, net of income tax— 1,850 — 15 
Earnings attributable to noncontrolling interests(48)(201)3 (84)
(Losses) earnings attributable to common shares650 3,350 (41)111 
TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION EFFECTS AND ASSOCIATED DERIVATIVES
(Dollars in millions)
 Total reported amountsTransactional gains (losses) included in reported amounts
 Three months ended September 30,
 2022202120222021
Other (expense) income, net$(40)$(55)$1 $(20)
Income tax (expense) benefit(21)342 4 33 
Equity earnings417 391 (2)16 
Net income (loss)561 (632)3 29 
Earnings attributable to noncontrolling interests(65)(5)(1)(1)
Earnings (losses) attributable to common shares485 (648)2 28 
 Nine months ended September 30,
 2022202120222021
Other (expense) income, net$(3)$52 $(16)$(36)
Income tax (expense) benefit(435)45 (80)(8)
Equity earnings1,118 1,022 (14)— 
Net income (loss)1,877 751 (110)(44)
Earnings attributable to noncontrolling interests(187)(48)21 3 
Earnings (losses) attributable to common shares1,656 650 (89)(41)
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CAPITAL RESOURCES AND LIQUIDITY
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OVERVIEW
Sempra
Impact of the COVID-19 Pandemic
Our businesses that invest in, develop and operate energy infrastructure and provide electric and gas services to customers have been identified as critical or essential services in the U.S. and Mexico and have continued to operate throughout the COVID-19 pandemic. As our businesses continue to operate, our priority is the safety of our employees, customers, partners and the communities we serve. We and other companies, including our partners, are taking steps to try to protect the health and well-being of our employees and other stakeholders. We continue to work closely with local, state and federal authorities in an effort to provide essential services with minimum interruption to customers and in accordance with applicable orders, including potential vaccination mandates.orders.
For a further discussion of risks and uncertainties related to the COVID-19 pandemic, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7. MD&A – Capital Resources and Liquidity” in the Annual Report.
Sempra Infrastructure PartnersInflation Reduction Act
As we discuss in Note 1The IRA was signed into law on August 16, 2022. The IRA includes tax credits and other incentives for energy and climate initiatives and introduces a 15% corporate alternative minimum tax on adjusted financial statement income for tax years beginning after December 31, 2022. We will continue to assess the impacts of the Notes to Condensed Consolidated Financial Statements, on October 1, 2021, we completedIRA as the sale of a 20% equity interest in Sempra Infrastructure Partners, which generally represents the combined businesses of Sempra LNG and IEnova, to KKR for cash proceeds of $3.37 billion, subject to post-closing adjustments. On October 1, 2021, Sempra Infrastructure Partners paid $149 million to KKR for reimbursement of certain expenses that KKR incurred in connection with closing the transaction. We intend to use the proceeds from the sale to fund capital investments in support of additional growth opportunities and strengthen our balance sheet by reducing debt, which we discuss below in “Long-Term Debt Activities.”
We have also entered into an accommodation and support agreement under which KKR has the ability to borrow from Sempra up to $300 million plus reimbursement of certain fees related to such borrowing, which we fully funded on November 1, 2021. This loan is due to be repaid in full no later than October 1, 2029 and bears compound interest at 5% per annum.
The completionU.S. Department of the sale of NCI in Sempra Infrastructure Partners reduced our ownership interest in Sempra Infrastructure PartnersTreasury and requires usthe U.S. Internal Revenue Service issue guidance. We do not expect the IRA to share control over certain business decisions with our minority partner, which introduceshave a number of risks similar to those associated with sharing business control. Moreover, the decrease in our ownership of Sempra Infrastructure Partners will also decrease our share of the cash flows, profits and other benefits these businesses currentlymaterial adverse impact on Sempra’s, SDG&E’s or may in the future produce, which could materially adversely affect ourSoCalGas’ results of operations, cash flows, financial condition and/or prospects. We discuss these risks and uncertainties further in “Part I – Item 1A. Risk Factors” in the Annual Report.cash flows.
Liquidity
We expect to meet our cash requirements through cash flows from operations, unrestricted cash and cash equivalents, borrowings under or supported by our credit facilities, other incurrences of debt including issuing debt securities and obtaining term loans, distributions from our equity method investments, issuances of debt, project financing and funding from minority interest owners. We believe that these cash flow sources, combined with available funds, will be adequate to fund our current operations in both the short-term and long-term, including to:
▪finance capital expenditures
▪repay debt
▪fund dividends
▪meet liquidity requirements
▪fund dividendscapital contribution requirements
▪fund expenditures related to the Leak
▪repurchase shares of our common stock
▪fund new business or asset acquisitions or start-ups
▪fund capital contribution requirements
▪repay long-term debt
▪fund expenditures related to the natural gas leak at SoCalGas’ Aliso Canyon natural gas storage facility
Sempra, SDG&E and the California UtilitiesSoCalGas currently have reasonable access to the money markets and capital markets and are not currently constrained in their ability to borrow money at reasonablemarket rates from commercial banks, under existing revolving credit facilities, or through public offerings registered with the SEC.SEC, or through private placements of debt supported by our revolving credit facilities in the case of commercial paper. However, our ability to access the money markets and capital markets or obtain credit from commercial banks outside of our committed revolving credit facilities could become materially constrained if changing economic conditions andor disruptions to or volatility in the money markets and capital markets worsen. These sources of funding also have become less attractive due to the COVID-19 pandemic or otherwise, worsen.recent rise in both short-term and long-term interest rates. In addition, our financing activities and actions by credit rating agencies, as well as many other factors, could negatively affect the availability and cost of both short-term and long-term financing. Also, cash flows from operations may be impacted by the timing of commencement and completion, and potentially cost overruns, of large projects and
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other material events, such as significant outflows resulting from the agreements expected to resolve certainsettlement of material litigationlitigation. As of October 31, 2022, SoCalGas had paid $1.79 billion related to the Leak.settlement of the Individual Plaintiff Litigation, which we describe in Note 11 of the Notes to Condensed Consolidated Financial Statements. If cash flows from operations were to be significantly reduced or we were unable to borrow under acceptable terms, we would likely first reduce or postpone discretionary
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capital expenditures (not related to safety) and investments in new businesses. We monitor our ability to finance the needs of our operating, investing and financing activities in a manner consistent with our intentiongoal to maintain our investment-grade credit ratings and capital structure.
We have significant investments in several trusts to provide for future payments of pensions and other postretirement benefits and nuclear decommissioning. Changes in asset values, which are dependent on activity in the equity and fixed income markets, have not materially and adversely affected the trust funds’ abilities to make required payments. However, changes in asset values or other factors in future periods, such as changes to discount rates, assumed rates of return, mortality tables and regulations, may impact funding requirements for pension and other postretirement benefits plans. Funding requirements for SDG&E’s NDT could also be impacted by the timing and amount of SONGS decommissioning costs. At the California Utilities, funding requirements are generally recoverable in rates. We discuss our employee benefit plans and SDG&E’s NDT, including our investment allocation strategies for assets in these trusts, in Notes 9 and 15, respectively, of the Notes to Consolidated Financial Statements in the Annual Report.ratings.
Available Funds
Our committed lines of credit provide liquidity and support commercial paper. As we discuss in Note 7 of the Notes to Condensed Consolidated Financial Statements,At September 30, 2022, Sempra, SDG&E and SoCalGas each havehad five-year credit agreements set to expire in 2024, SI Partners has a three-year credit agreement expiring in 2024. In addition, Sempra Mexico2024 and IEnova has committed lines of credit that expire in 2023 and 20242024. In addition, IEnova and ECA LNG Phase 1 have uncommitted revolving credit facilities that expire in 2022 and 2023. Sempra Infrastructure Partners intends to enter into its own revolving credit facility, although such a credit facility and its timing remain uncertain.
The table below shows the amount of available funds at September 30, 2021, including available unused credit on these primary U.S. and foreign lines of credit.
AVAILABLE FUNDS AT SEPTEMBER 30, 2021
AVAILABLE FUNDS AT SEPTEMBER 30, 2022AVAILABLE FUNDS AT SEPTEMBER 30, 2022
(Dollars in millions)(Dollars in millions)(Dollars in millions)
SempraSDG&ESoCalGas SempraSDG&ESoCalGas
Unrestricted cash and cash equivalents(1)
Unrestricted cash and cash equivalents(1)
$873 $239 $226 
Unrestricted cash and cash equivalents(1)
$685 $219 $53 
Available unused credit(3)(2)
Available unused credit(3)(2)
6,312 1,500 750 
Available unused credit(3)(2)
8,905 1,500 323 
(1)    Amounts at Sempra include $138 million$102 held in non-U.S. jurisdictions. We discuss repatriation in Note 1 of the Notes to Condensed Consolidated Financial Statements in this report and Note 8 of the Notes to Consolidated Financial Statements in the Annual Report.
(2)    Available unused credit is the total available on Sempra’s, SDG&E’s, SoCalGas’, Sempra Mexico’scommitted and Sempra LNG’suncommitted lines of credit facilities that we discuss in Note 7 of the Notes to Condensed Consolidated Financial Statements.
(3) Because our commercial paper programs are supported by these lines, we reflect the amount of commercial paper outstanding as a reduction to the available unused credit.

In October 2022, Sempra, SDG&E and SoCalGas each entered into a separate five-year credit facilities, all expiring in October 2027. The credit facilities permit borrowings of up to $4.0 billion by Sempra, $1.5 billion by SDG&E and $1.2 billion by SoCalGas. The credit facilities replace Sempra’s $3.19 billion credit facility and $1.25 billion credit facility, SDG&E’s $1.5 billion credit facility and SoCalGas’ $750 million credit facility, which were set to expire in 2024.
Short-Term Borrowings
We use short-term debt primarily to meet liquidity requirements, fund shareholder dividends, and temporarily finance capital expenditures, acquisitions or start-ups. Our California UtilitiesSDG&E and SoCalGas use short-term debt primarily to meet working capital needs. Revolvingneeds or to help fund event-specific costs, such as payments made by SoCalGas relating to litigation and regulatory matters pertaining to the Leak. Commercial paper, lines of credit commercial paper and a term loanloans were our primary sources of short-term debt funding in the first nine months of 2021.2022.
We discuss our short-term debt activities in Note 7 of the Notes to Condensed Consolidated Financial Statements and below in “Sources and Uses of Cash.”
Long-Term Debt Activities
IssuancesSignificant issuances of and payments on long-term debt in the first nine months of 20212022 included the following:
LONG-TERM DEBT ISSUANCES AND PAYMENTS
(Dollars in millions)
Issuances:Amount at issuanceMaturity
Sempra 3.30% fixed rate notes$750 2025
Sempra 3.70% fixed rate notes500 2029
SDG&E variable rate term loan400 2024
SDG&E 3.00% first mortgage bonds500 2032
SDG&E 3.70% first mortgage bonds500 2052
SoCalGas 2.95% fixed rate notes700 2027
Sempra Infrastructure variable rate notes178 2025
Sempra Infrastructure 3.25% fixed rate notes400 2032
Payments:PaymentsMaturity
SDG&E 1.914% amortizing first mortgage bonds17 2022
Sempra Infrastructure amortizing variable rate notes (5.13% after floating-to-fixed rate swaps)162 2022-2026
Sempra Infrastructure variable rate notes64 2025
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LONG-TERM DEBT ISSUANCES AND PAYMENTS
(Dollars in millions)
Issuances:Amount at issuanceMaturity
SDG&E 2.95% green first mortgage bonds$750 2051
Sempra LNG variable rate notes274 2025
Payments:PaymentsMaturity
Sempra variable rate notes$850 2021
SDG&E 3% first mortgage bonds350 2021
SDG&E 1.914% amortizing first mortgage bonds36 2021
SDG&E variable rate 364-day term loan200 2021
Sempra Mexico amortizing variable rate notes33 2021
Sempra Mexico amortizing variable and fixed rate loans29 2021
In October 2021,September 2022, Sempra MexicoInfrastructure used proceeds from borrowings against itsIEnova’s committed and uncommitted lines of credit to fully repay $175$141 million of outstanding principal plus accrued and unpaid interest on the ESJ fixed- and variable-rate loan prior to its scheduled maturity in 2033, and $375 million of outstanding principal plus accrued and unpaid interest on the Ventika fixed- andIEnova Pipelines variable-rate loans prior to scheduled maturity dates through 2032,2026, and recognized approximately $50$2 million ($301 million after tax and NCI) in charges associated with the write-off of acquisition-related fair value adjustments offset by a hedge termination costs and a write-off of unamortized debt issuance costs.
On November 1, 2021, Sempra issued notices to redeem, at respective make-whole redemption prices, an aggregate principal amount of $2.35 billion of senior unsecured notes prior to scheduled maturities in 2022 through 2025. Upon redemption, which is scheduled to occur in December 2021, we expect to recognize approximately $128 million ($93 million after tax) in charges associated with the make-whole premiums from the early redemptions and write-off of unamortized discount and debt issuance costs.benefit.
We discuss our long-term debt activities, including the use of proceeds on long-term debt issuances, in Note 7 of the Notes to Condensed Consolidated Financial Statements.
Credit Ratings
We provide additional information about the credit ratings of Sempra, SDG&E and SoCalGas in “Part I – Item 1A. Risk Factors” and “Part II – Item 2. MD&A – Capital Resources and Liquidity” in the Annual Report.
The credit ratings of Sempra, SDG&E and SoCalGas remained at investment grade levels in the first nine months of 2021.2022.
CREDIT RATINGS AT SEPTEMBER 30, 20212022  
 SempraSDG&ESoCalGas
Moody’sBaa2 with a stable outlookA3 with a stable outlookA2 with a stable outlook
S&PBBB+ with a negative outlookBBB+ with a stable outlookA with a negative outlook
FitchBBB+ with a stable outlookBBB+ with a stable outlookA with a stable outlook
A downgrade of Sempra’s or any of its subsidiaries’ credit ratings or rating outlooks may, depending on the severity, result in the imposition of financial and/or other burdensome covenants and a requirement for collateral to be posted in the case of certain financing arrangements and may materially and adversely affect the market prices of their equity and debt securities, the rates at which borrowings are made and commercial paper is issued, and the various fees on their outstanding credit facilities. This could make it more costly for Sempra, SDG&E, SoCalGas and Sempra’s other subsidiaries to issue debt securities, to borrow under credit facilities and to raise certain other types of financing.
Sempra has agreed that, if the credit rating of Oncor’s senior secured debt by any of the three major rating agencies falls below BBB (or the equivalent), Oncor will suspend dividends and other distributions (except for contractual tax payments), unless otherwise allowed by the PUCT. Oncor’s senior secured debt was rated A2, A+ and A at Moody’s, S&P and Fitch, respectively, at September 30, 2021.2022.
Loans with Affiliates
At September 30, 2021,2022, Sempra had $686 million in loans due from unconsolidated affiliates and $328$296 million in loans due to unconsolidated affiliates.
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In July 2022, a $626 million loan due to Sempra from an unconsolidated affiliate was paid in full, prior to its March 2023 maturity date.

Sempra
California Utilities
SDG&E’s and SoCalGas’ operations have historically provided relatively stable earnings and liquidity. Their future performance and liquidity will depend primarily on the ratemaking and regulatory process, environmental regulations, economic conditions, actions by the California legislature, litigation and the changing energy marketplace, as well as other matters described in this report. SDG&E and SoCalGas expect that the available unused credit from their credit facilities described above, which also supports their commercial paper programs, cash flows from operations, and other incurrences of debt issuancesincluding issuing debt securities and obtaining term loans will continue to be adequate to fund their respective current operations and planned capital expenditures. Additionally, as we discuss below, Sempra has elected to make equity contributions to SoCalGas which beganof $800 million in September 2021, that are sufficient$150 million in June 2022 and $500 million in August 2022. These voluntary equity contributions were intended to maintain SoCalGas’assist SoCalGas in maintaining its approved capital structure in connection with the accruals related to the Leak. The California Utilitiesstructure. SDG&E and SoCalGas manage their capital structurestructures and pay dividends when appropriate and as approved by their respective boards of directors.
As we discuss in Note 4 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report, changes in balancing accounts for significant costs at SDG&E and SoCalGas, particularly a change between over- and undercollected status, may have a significant impact on cash flows. These changes generally represent the difference between when costs are incurred and when they are ultimately recovered or refunded in rates through billings to customers.
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COVID-19 Pandemic Protections
The California UtilitiesSDG&E and SoCalGas are continuing to monitor the impacts of the COVID-19 pandemic on cash flows and results of operations. Some customers have experienced and continue to experience a diminished ability to pay their electric or gas bills, leading to slower payments and higher levels of nonpayment than has been the case historically. These impacts could become significant and could require modifications to our financing plans.
In connection with the COVID-19 pandemic and at the California Utilitiesdirection of the CPUC, SDG&E and SoCalGas implemented certaina number of measures to assist customers, including suspending service disconnections due to nonpayment for all customers (except for SoCalGas’ noncore customers), waiving late payment fees, and offering flexible payment plans. Such measures ended on June 30, 2021, except for the suspension of service disconnections that ended on September 30, 2021. At the CPUC’s direction, the California Utilities have started to automatically enrollenrolling residential and small business customers with past-due balances in long-term repayment plans. The CPUC is continuing to consider the impacts
In 2021, SDG&E and SoCalGas applied, on behalf of any state or federal relief programs on customer arrearages and if further debt relief is warranted.
The CPUC authorized each of the California Utilities to track and request recovery of incremental costs associated with complying with residential customer protection measures implemented by the CPUC related to the COVID-19 pandemic, including costs associated with suspending service disconnections and uncollectible expenses that arise from customers’ failure to pay. The California Utilities expect to pursue recovery of small and medium-large commercial and industrial customers’ tracked costs in rates in a future CPUC proceeding, which recovery is not assured. Uncollectible expenses related to residentialtheir customers, are recorded in a two-way balancing account as we discuss below.
The continuation of these circumstances could result in a further reduction in payments receivedfor financial assistance from the California Utilities’ customersDepartment of Community Services and a further increase in uncollectible accounts,Development under the California Arrearage Payment Program, which could become material,provided funds of $63 million and any inability or delay in recovering all or a substantial portion of these costs could have a material adverse effect on the cash flows, financial condition and results of operations of Sempra,$79 million for SDG&E and SoCalGas. WeSoCalGas, respectively. In the first quarter of 2022, SDG&E and SoCalGas received and applied the amounts directly to eligible customer accounts to reduce past due balances. In June 2022, AB 205 was approved establishing, among other things, the 2022 California Arrearage Payment Program. SDG&E and SoCalGas have applied for funding from this program on behalf of their residential customers with past due balances and, if approved, may receive up to $51 million and $59 million, respectively, of such funding in the first quarter of 2023.
SDG&E
Authorized Cost of Capital, Subject to the CCM
As we discuss regulatory mechanisms in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Disconnection OIR
In June 2020, the CPUC issued a decision addressing residential service disconnections that, among other things, allows each of the California Utilities to establish a two-way balancing account to record the uncollectible expenses associated with residential customers’ inability to pay their electric or gas bills. This decision also directs the California Utilities to establish an AMP that provides successfully participating, income-qualified residential customers with relief from outstanding utility bill amounts and became effectiveStatements, in February 2021. The California Utilities have recorded increases in their allowances for uncollectible accounts primarily related to expected forgiveness of outstanding bill amounts for customers eligible under the AMP. The AMP could result in a further reduction in payments received from the California Utilities’ customers and a further increase to uncollectible accounts, which could become material, and any inability to recover these costs could have a material adverse effect on the cash flows, financial condition and results of operations of Sempra, SDG&E and SoCalGas.
CCM
A CPUC cost of capital proceeding determines a utility’s authorized capital structure and authorized return on rate base. In December 2019, the CPUC approved the cost of capital and rate structures for SDG&E and SoCalGas that became effective on
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January 1, 2020 and will remain in effect through December 31, 2022, subject to the CCM. The CCM considers changes in interest rates based on the applicable utility bond index published by Moody’s (the CCM benchmark rate) for each 12-month period ending September 30 (the measurement period). The CCM benchmark rate is the basis of comparison to determine if the CCM is triggered, which occurs if the change in the applicable Moody’s utility bond index relative to the CCM benchmark rate is larger than plus or minus 1.000% at the end of the measurement period. The index applicable to SDG&E and SoCalGas is based on each utility’s credit rating. 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.
Alternatively, under the CCM, each of the California Utilities is permitted to file a cost of capital application in an interim year in which an extraordinary or catastrophic event materially impacts its cost of capital. In August 2021, SDG&E filed an application with the CPUC to update its cost of capital effective January 1, 2022 due to the ongoing effects of the COVID-19 pandemic. In this application, SDG&E proposed to adjust its authorized capital structure by increasing its common equity ratio from 52% to 54%. SDG&E also proposed to increase its authorized ROE from 10.20% to 10.55% and decrease its authorized cost of debt from 4.59% to 3.84%. As a result, SDG&E’s proposed return on rate base would decrease from 7.55% to 7.46% if such application is approved by the CPUC as filed. SDG&E filed a joint motion with PG&E and Edison to consolidate all three utilities’ cost of capital applications given the overlapping issues of law and fact, which joint motion was granted in October 2021.
For the measurement period that ended September 30, 2021, the CCM would trigger for SDG&E if the CPUC determines that the CCM should be implemented because the average Moody’s Baa- utility bond index between October 1, 2020 and September 30, 2021 was 1.17% below SDG&E’s CCM benchmark rate of 4.498%. However,In August 2021, SDG&E’s&E filed an application with the CPUC to update its cost of capital effective January 1, 2022, if accepted bydue to the ongoing effects of the COVID-19 pandemic rather than have the CCM apply. In December 2021, the CPUC would supersedeestablished a proceeding to determine if SDG&E’s cost of capital was impacted by an extraordinary event such that the CCM from applying. If such application isshould not accepted,apply.
In November 2022, the CPUC approved a proposed decision that found there was an extraordinary event, the CCM wouldwill be effective January 1,suspended for 2022 and would automatically adjust SDG&E’s authorized ROE from 10.20% to 9.62% and adjust itscurrent authorized cost of debt to reflectcapital for 2022 will be preserved.
We further discuss the then current embedded cost and projected interest rate. SDG&E has requested that a final CPUC decision on its interim cost of capital application be issuedCCM in “Part I – Item 1A. Risk Factors” in the first half of 2022.
For the measurement period ended September 30, 2021, the CCM was not triggered for SoCalGas. SoCalGas expects to file its next cost of capital application in April 2022 for a January 1, 2023 effective date.
SDG&EAnnual Report.
Wildfire Fund
The carrying value of SDG&E’s Wildfire Fund asset totals $371$339 million at September 30, 2021.2022. We describe the Wildfire Legislation and related accounting treatment and SDG&E’s commitment to make annual shareholder contributions to the Wildfire Fund through 2028 in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
SDG&E is exposed to the risk that the participating California electric IOUs may incur third-party wildfire costs for which they will seek recovery from the Wildfire Fund including with respect to wildfires that have occurred since enactment of the Wildfire Legislation in July 2019. In such a situation, SDG&E may recognize a reduction of its Wildfire Fund asset and record aan impairment charge against earnings when there is a reduction of the available coverage due to recoverable claims from any of the participating IOUs. At September 30, 2021, PG&E recorded a receivable from the Wildfire Fund indicatinghas indicated that it maywill seek reimbursement in the future from the Wildfire Fund for losses associated with the Dixie Fire.Fire, which burned from July 2021 through October 2021 and was reported to be the largest single wildfire (measured by acres burned) in California history. If any California electric IOU’s equipment is determined to be a cause of a fire, it could have a material adverse effect on SDG&E’s and Sempra’s financial condition and results of operations up to the carrying value of our Wildfire Fund asset, with additional potential material exposure if SDG&E’s equipment is determined to be a cause of a fire. In addition, the Wildfire Fund could be completely exhausted due to fires in the other California electric IOUs’ service territories, by fires in SDG&E’s service territory or by a combination thereof. In the event that the Wildfire Fund is materially diminished, exhausted or terminated, SDG&E will lose the protection afforded by the Wildfire Fund, and as a consequence, a fire in SDG&E’s service territory could have a material adverse effect on SDG&E’s and Sempra’s cash flows, results of operations, and financial condition.condition, cash flows and/or prospects.
Wildfire Cost Recovery Mechanism
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In July 2021, SDG&E filed a request with the CPUC to establish an interim cost recovery mechanism that would recover in rates 50% of its wildfire mitigation plan regulatory account balance as of January 1 of each year. Such potentialcosts. The proposed recovery would be incremental to wildfire costs currently authorized in its GRC and would be subject to reasonableness review. We expectIn May 2022, the CPUC to issueissued a final decision denying SDG&E’s request and directing SDG&E to file for the review and recovery of its wildfire mitigation plan costs through its next GRC or a separate application. SDG&E expects to submit separate requests in its GRC for review and recovery of its wildfire mitigation plan costs in mid-2023 for costs incurred from 2019 through 2022 and in mid-2024 for costs incurred in 2023.
Off-Balance Sheet Arrangements
SDG&E has entered into PPAs and tolling agreements that are variable interests in unconsolidated entities. We discuss variable interests in Note 1 of the first half of 2022.Notes to Condensed Consolidated Financial Statements.
SoCalGas
SoCalGas’ future performance and liquidity willmay be impacted by the resolution of legal, regulatory and other matters concerningpertaining to the Leak, which we discuss below and in Note 11 of the Notes to Condensed Consolidated Financial Statements in this report and in “Part I – Item 1A. Risk Factors” in the Annual Report.
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Aliso Canyon Natural Gas Storage Facility Gas Leak
From October 23, 2015 through February 11, 2016, SoCalGas experienced a natural gas leak from one of the injection-and-withdrawal wells, SS25, at its Aliso Canyon natural gas storage facility located in Los Angeles County.Leak.
Cost Estimate, Insurance and Accounting Impact and Insurance.Other Impacts. At September 30, 2021,2022, SoCalGas estimates certain costs related to the Leak are $3,199$3,485 million (the cost estimate). This cost estimate may increase significantly, including $1,279 million of costs recoverable from insurance, all of which had been received by SoCalGas as more information becomes available. A portionof October 31, 2022. Other than insurance for directors’ and officers’ liability, we have exhausted all of our available insurance for this matter. At September 30, 2022, $145 million of the cost estimate has been paid, and $1,976 million is accrued asin Reserve for Aliso Canyon Costs at September 30, 2021and $4 million of the cost estimate is accrued in Deferred Credits and Other on SoCalGas’ and Sempra’s Condensed Consolidated Balance Sheets.
Sempra has elected to make equity contributions to SoCalGas that are sufficient to maintain SoCalGas’ approved capital structure in connection with the accruals related to these agreements, and Sempra does not expect to issue common equity in relation to these agreements. In connection with this election,of $800 million in September 2021, $150 million in June 2022 and $500 million in August 2022. These voluntary equity contributions were intended to assist SoCalGas in maintaining its approved capital structure. As of October 31, 2022, SoCalGas had paid $1.79 billion related to the settlement of the Individual Plaintiff Litigation. SoCalGas funded the settlement payment using a combination of equity contributions from Sempra, made an initial equity contribution of $800 million to SoCalGas.short-term debt and cash on hand.
Except for the amounts paid or estimated to settle certain legal and regulatory matters, the cost estimate does not include any amounts necessary to resolve the matters that we describe in “Civil Litigation“Litigation – Unresolved Litigation”Unresolved” and “Regulatory Proceedings”Proceedings – Unresolved” in Note 11 of the Notes to Condensed Consolidated Financial Statements, threatened litigation, other potential litigation or other costs, in each case to the extent it is not possible to predict at this time the outcome of these actions or reasonably estimate the possible costs or a range of possible costs for damages, restitution, civil or administrative fines or penalties, defense, settlement or other costs or remedies that may be imposed or incurred. The cost estimate also does not include certain other costs incurred by Sempra associated with defending against shareholder derivative lawsuits and other potential costs that we currently do not anticipate incurring or that we cannot reasonably estimate. Further, we are not able to reasonably estimate the possible loss or a range of possible losses in excess of the amounts accrued. TheseThe costs or losses not included in the cost estimate could be significant andsignificant.
An adverse outcome with respect to (i) any lawsuits by the Remaining Individual Plaintiffs, (ii) the unresolved shareholder derivative actions, (iii) threatened or other potential litigation related to the Leak, (iv) the Leak OII if approval of the negotiated settlement is not subsequently obtained, or (v) the unresolved proceeding pursuant to the SB 380 OII that we discuss below, could have a material adverse effect on SoCalGas’ and Sempra’s cash flows,results of operations, financial condition, and results of operations.
We have received insurance payments for many of the categories of costs included in the cost estimate, including temporary relocation and associated processing costs, control-of-well expenses, costs of the government-ordered response to the Leak, certain legal costs and lost gas. As of September 30, 2021, we recorded the expected recovery of the cost estimate related to the Leak of $414 million as Insurance Receivable for Aliso Canyon Costs on SoCalGas’ and Sempra’s Condensed Consolidated Balance Sheets. This amount is exclusive of insurance retentions and $865 million of insurance proceeds we received through September 30, 2021. We intend to pursue the full extent of our insurance coverage for the costs we have incurred. Other than insurance for certain future defense costs we may incur as well as directors’ and officers’ liability, we have exhausted all of our insurance in this matter. We continue to pursue other sources of insurance coverage for costs related to this matter, but we may not be successful in obtaining additional insurance recovery for any of these costs. If we are not able to secure additional insurance recovery, if any costs we have recorded as an insurance receivable are not collected, if there are delays in receiving insurance recoveries, or if the insurance recoveries are subject to income taxes while the associated costs are not tax deductible, such amounts, which could be significant, could have a material adverse effect on SoCalGas’ and Sempra’s cash flows financial condition, results of operations and/or prospects.
Natural Gas Storage Operations and Reliability. Natural gas withdrawn from storage is important for service reliability during peak demand periods, including peak electric generation needs in the summer and consumer heating needs in the winter. The Aliso Canyon natural gas storage facility is the largest SoCalGas storage facility and an important elementcomponent of SoCalGas’ delivery system. As a result of the Leak, the CPUC has issued a series of directives to SoCalGas specifying the range of working gas to be maintained in the Aliso Canyon natural gas storage facility as well as protocols for the withdrawal of gas, to support safe and reliable natural gas service. In February 2017, the CPUC opened a proceeding pursuant to the SB 380 OII to determine the feasibility of minimizing or eliminating the use of the Aliso Canyon natural gas storage facility while still maintaining energy and electric reliability for the region, including considering alternative means for meeting or avoiding the demand for the facility’s services if it were eliminated.
At September 30, 2021,2022, the Aliso Canyon natural gas storage facility had a net book value of $863$923 million. If the Aliso Canyon natural gas storage facility were to be permanently closed or if future cash flows from its operation were otherwise insufficient to recover its carrying value, we may record an impairment of the facility, which could be material, incur materially higher than
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expected operating costs and/or be required to make material additional capital expenditures (any or all of which may not be recoverable in rates), and natural gas reliability and electric generation could be jeopardized. Any such outcome could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows and/or prospects.
Labor Relations
Field, technical and most clerical employees at SoCalGas are represented by the Utility Workers Union of America or the International Chemical Workers Union Council. The collective bargaining agreement for these employees covering wages, hours, working conditions, and medical and other benefit plans expired on September 30, 2021. On October 1, 2021, SoCalGas and
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representatives of the unions reached a tentative agreement for a new collective bargaining agreement to be in effect through 2024. To allow time for ratification of the new collective bargaining agreement by the employees, it was also agreed that the terms and conditions of the existing agreement would be extended through the date the new collective bargaining agreement is ratified. We expect the new collective bargaining agreement to be ratified in November 2021.
Franchise Agreement
SoCalGas’In December 2021, the Los Angeles City Council awarded SoCalGas a new, 21-year natural gas franchise agreement withfollowing an invitation for bids, which was approved and signed by the City of Los Angeles is duemayor in January 2022. The 21-year term consists of an initial 13-year term from the effective date, followed by an 8-year term that the City of Los Angeles has the option to expire December 31, 2021. SoCalGas expects that it will participate interminate. Among other conditions, the competitive bid process for a new franchise agreement consistentwas subject to CPUC approval of the rates and surcharges therein for it to become effective, which SoCalGas received in March 2022. Consistent with its terms, the new agreement went into effect on May 1, 2022, until which time SoCalGas continued to serve customers located in the City of Los Angeles in accordance with the termsagreement that expired on December 31, 2021, by operation of the City Charter.law.
Sempra Texas Utilities
Oncor relies on external financing as a significant source of liquidity for its capital requirements. In the event that Oncor fails to meet its capital requirements or is unable to access sufficient capital to finance its ongoing needs, we may elect to make additional capital contributions to Oncor (as our commitments to the PUCT prohibit us from making loans to Oncor), which could be substantial and which would reduce the cash available to us for other purposes, could increase our indebtedness and could ultimately materially adversely affect our results of operations, liquidity, financial condition, andcash flows and/or prospects. Oncor’s ability to pay dividendsmake distributions may be limited by factors such as its credit ratings, regulatory capital requirements, increases in its capital plan, debt-to-equity ratio approved by the PUCT and other restrictions.restrictions and considerations. In addition, Oncor will not pay dividendsmake distributions if a majority of Oncor’s independent directors or any minority member director determines it is in the best interests of Oncor to retain such amounts to meet expected future requirements.
Winter Weather EventOff-Balance Sheet Arrangement
In February 2021, ERCOT required electric distribution companies, includingOur investment in Oncor to significantly reduce demand on the grid because electricity generation was insufficient to meet demand due to extreme winter weather. AsHoldings is a result of the load shedding events and state-wide power outages, the PUCT, other governmental authorities or third parties, including Oncor’s customers, have taken or could take other measures to address financial challenges experienced as a result of the event, which could adversely impact Oncor’s collections and cash flows and,variable interest in turn, could adversely impact Sempra. The Texas Legislature has passed, and the Governor of Texas has signed, various legislation affecting the ERCOT market, which addresses matters including certain weatherization requirements and fines of up to $1 million per day for failures to comply with such requirements, enabling ERCOT to finance certain amounts owed by ERCOT market participants relating to the winter weather event, creation of the Texas Energy Reliability Council, identification of gas facilities that are critical to electric-generator fuel supplies, coordination between the gas and electric industries, and changes in the composition of the PUCT and the ERCOT board of directors. In addition, various regulatory and governmental entities have also commenced investigations or indicated an intent to investigate the operation of the ERCOT grid during this extreme winter weather event and potential future actions to improve grid reliability. Any significant changes relating to the ERCOT market that impact transmission and distribution utilities as a result of such proceedings or otherwise could materially adversely impact Oncor. If Oncor does not successfully respond to these changes and any other legislative, regulatory, or market or industry developments applicable to it, Oncor could suffer a deterioration in its results of operations, financial condition, cash flows and/or prospects, which could materially adversely affect Sempra’s results of operations, financial condition, cash flows and/or prospects.
Sempra Mexico
Construction Projects
Sempra Mexico began commercial operations of its new terminals for the receipt, storage and delivery of refined fuel products in the new port of Veracruz on March 19, 2021 and in Mexico City on July 2, 2021. The two terminals have a combined storage capacity of more than 2.6 million barrels. The storage capacity for both terminals is contracted with Valero Energy Corporation. Sempra Mexico also completed construction and began commercial operations of a new solar facility (Border Solar) in Juárez, Chihuahua on March 25, 2021.
Sempra Mexico is currently constructing additional terminals for the receipt, storage, and delivery of liquid fuels in the vicinity of Puebla and Topolobampo. We expect the Puebla project to commence commercial operations in 2021 and the Topolobampo project to commence commercial operations in the first half of 2022. However, expected commencement dates could be delayed by worsening or extended disruptions of project construction caused by the COVID-19 pandemic or other factors outside our control. Sempra Mexico is continuing to monitor the impacts of the COVID-19 pandemic on cash flows and results of operations. We expect to fund these capital expenditures, investments and operations at IEnova with available funds, including credit facilities, and funds internally generated by the Sempra Mexico businesses, as well as funds from project financing, sales of
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securities, interim funding from the parent or affiliates, and partnering in JVs. Sempra Mexico is also developing terminals for the receipt, storage, and delivery of liquid fuels in the vicinity of Manzanillo, Guadalajara and Ensenada.
As part of an industrywide audit and investigative process initiated by the CRE to enforce fuel procurement laws, federal prosecutors conducted inspections at several refined products terminals, including IEnova’s refined products terminal in Puebla to confirm that the gasoline and/or diesel in storage were legally imported. During the inspection of the Puebla terminal in September 2021, a federal prosecutor took samples from all the train and storage tanks in the terminal and ordered that the facility be temporarily shut down during the pendency of the analysis of the samples and investigation, while leaving the terminal in IEnova’s custody. Although IEnova filed an amparo lawsuit against the closure and has submitted proof of the legal origin of the products to the prosecutor’s office, we are unable to predict when the investigation will be completed and whether the facility will be able to resume normal operations. If the terminal were to be shut down or commissioning operations significantly curtailed for an extended period of time, Sempra’s results of operations, financial condition, cash flows and/or prospects could be materially adversely affected.
The ability to successfully complete major construction projects is subject to a number of risks and uncertainties. For a discussion of these risks and uncertainties, see “Part I – Item 1A. Risk Factors” in the Annual Report.
Legal and Regulatory Matters
Energía Costa Azul. IEnova has been engaged in a long-running land dispute relating to property adjacent to its ECA Regas Facility that allegedly overlaps with land owned by the ECA Regas Facility (the facility, however, is not situated on the land that is the subject of this dispute). In addition, four cases involving two adjacent areas of real property on which part of the ECA Regas Facility is situated, each brought by a single plaintiff or her descendants, remain pending against the facility. Certain of these land disputes involve land on which portions of the ECA LNG liquefaction facilities, including ECA LNG Phase 1 currently under construction, are proposed to be situated or on which portions of the ECA Regas Facility that would be necessary for the operation of the proposed ECA LNG liquefaction facilities are situated.
Several administrative challenges are pending before Mexico’s Secretariat of Environment and Natural Resources (the Mexican environmental protection agency) and Federal Tax and Administrative Courts, seeking revocation of the environmental impact authorization issued to the ECA Regas Facility in 2003. These cases generally allege that the conditions and mitigation measures in the environmental impact authorization are inadequate and challenge findings that the activities of the terminal are consistent with regional development guidelines. In 2018 and 2021, three related claimants filed separate challenges in the federal district court in Ensenada, Baja California in relation to the environmental and social impact permits issued by each of ASEA and SENER to ECA LNG authorizing natural gas liquefaction activities at the ECA Regas Facility.
In May 2020, the two third-party capacity customers at the ECA Regas Facility, Shell Mexico and Gazprom, asserted that a 2019 update of the general terms and conditions for service at the facility, as approved by the CRE, resulted in a breach of contract by IEnova and a force majeure event. Citing these circumstances, the customers subsequently stopped making payments of amounts due under their respective LNG storage and regasification agreements. IEnova has rejected the customers’ assertions and has drawn on the customers’ letters of credit provided as payment security. The parties engaged in discussions under the applicable contractual dispute resolution procedures without coming to a mutually acceptable resolution. In July 2020, Shell Mexico submitted a request for arbitration of the dispute and although Gazprom has joined the proceeding, Gazprom has since replenished the amounts drawn on its letter of credit and has resumed making regular monthly payments under its LNG storage and regasification agreement. As a consequence, IEnova is not currently drawing on Gazprom’s letter of credit but expects to continue to draw on Shell Mexico’s letter of credit. IEnova intends to avail itself of its available claims, defenses, rights and remedies in the arbitration proceeding, including seeking dismissal of the customers’ claims. In addition to the arbitration proceeding, Shell Mexico also filed a constitutional challenge to the CRE’s approval of the update to the general terms and conditions and an additional constitutional claim against the issuance of the liquefaction permit. Shell Mexico’s request to stay the CRE’s approval of the general terms and conditions was denied in October 2020 and upheld on appeal. A decision on the merits is pending. The claim regarding the liquefaction permit issuance was denied in March 2021 and upheld on appeal. A hearing on the merits of the arbitration case was held in October 2021.
unconsolidated entity. We discuss these matters in further detail in Note 11 of the Notes to Condensed Consolidated Financial Statements. One or more unfavorable final decisions on these disputes or challenges could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, cash flows, financial condition, results of operations and/or prospects.
Sonora Pipeline. As we discuss in Note 11 of the Notes to Condensed Consolidated Financial Statements, the Guaymas-El Oro segment of the Sonora pipeline has been inoperable since August 2017. Under an agreement between IEnova and the CFE, the CFE will resume making payments only when the damaged section of the Guaymas-El Oro segment of the Sonora pipeline is
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repaired. If the pipeline is not repaired by March 14, 2022, and the parties do not agree on a new service start date, IEnova retains the right to terminate the contract and seek to recover its reasonable and documented costs and lost profits. At September 30, 2021, Sempra Mexico had $436 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if IEnova is unable to make such repairs (which have not commenced) or re-route the pipeline (which has not been agreed to by the parties) and resume operations in the Guaymas-El Oro segment of the Sonora pipeline or if IEnova terminates the contract and is unable to obtain recovery, which in each case could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
In June 2014, IEnova and a landowner agreed to enter into a voluntary right-of-way easement agreement for the construction and operation of a seven-mile section of the 314-mile Sasabe-Puerto Libertad-Guaymas segment of the Sonora natural gas pipeline on the landowner’s property. However, in 2015, the landowner filed a complaint demanding the easement agreement be nullified. In September 2021, a definitive and non-appealable judgment was issued declaring the easement agreement nullified and ordering the removal of the pipeline from the landowner’s property. IEnova intends to file a special judicial action whereby it will ask a civil court to acknowledge the existence of the easement and to determine the consideration the landowner should receive in exchange for the easement. The failure to stay this judgment pending the resolution of IEnova’s planned special judicial action or prevail in preserving the easement in the special judicial action could require us to modify the route of the pipeline and could require a temporary shutdown of this portion of the pipeline, which could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
Regulatory and Other Actions by the Mexican Government. As we discuss in Note 11 of the Notes to Condensed Consolidated Financial Statements, the Mexican government and certain Mexican governmental agencies have amended existing laws and rules, updated transmission rates, and issued orders, decrees and regulations that could materially impact IEnova’s participation in the country’s energy market. Those actions would, among other things, create barriers for renewable energy facilities to enter the wholesale electricity market, threaten the prospects for private-party renewable energy generation in the country, limit the ability to dispatch renewable energy and to receive or maintain operation permits and increase costs of electricity for legacy renewables and cogeneration energy contract holders. In addition, those actions (i) require that only state-owned companies may import and export hydrocarbons, refined products, petrochemicals, and biofuels through channels other than those authorized, which could adversely affect new projects that have not obtained such authorizations and projects under construction, in development or in operation, and (ii) grant SENER and the CRE additional powers to suspend and revoke permits related to the midstream and downstream sectors. Some of these newly enacted amendments, orders, rules, decrees and regulations have been challenged or temporarily suspended through litigation and judicial rulings obtained by businesses operating in the power sector, including by IEnova.
As we discuss in Note 11 of the Notes to Condensed Consolidated Financial Statements, in September 2021, the President of Mexico presented a constitutional reform initiative that introduces significant changes to the legal and economic principles underlying the country’s energy reform of 2013, generating imminent risks for private investments in this sector. Electricity generation permits and contracts for the sale of electricity to the CFE, including permits at all of IEnova’s operational power generation facilities, would be canceled. The public electricity supply service would be provided exclusively by the CFE, which may acquire up to 46% of required energy from the private sector. Only certain private power plants would be permitted to continue generating electricity and compete to offer the CFE the lowest production costs.
If the ongoing litigation to enjoin enforcement or suspend or overturn these newly enacted laws and regulations fails, if the proposed constitutional reform is passed in its current form, or if other amendments to existing laws or regulations are adopted or enacted that curb private-party involvement in the energy sector in Mexico, this could impact our ability to operate our facilities at existing levels or at all, result in increased costs for IEnova and its customers, adversely affect our ability to develop new projects, and negatively impact our ability to recover the carrying values of our investments in Mexico, any of which may have a material adverse effect on our business, financial condition, results of operations, cash flows and/or prospects.
Acquisition of ESJ
As we discuss in Note 5 of the Notes to Condensed Consolidated Financial Statements, in March 2021, IEnova increased its ownership interest in ESJ from 50% to 100% by acquiring Saavi Energía’s 50% equity interest in ESJ. ESJ owns a fully operating wind power generation facility with a nameplate capacity of 155 MW that is fully contracted by SDG&E under a long-term PPA. ESJ is constructing a second wind power generation facility with a nameplate capacity of 108 MW that we expect will be completed in the first quarter of 2022.
IEnova Exchange Offer and Cash Tender Offer
In May 2021, we acquired 381,015,194 publicly owned shares of IEnova in exchange for 12,306,777 newly issued shares of our common stock upon completion of our exchange offer launched in the U.S. and Mexico, which increased our ownership interest
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in IEnova from 70.2% to 96.4%. In September 2021, we completed a cash tender offer and acquired 51,014,545 publicly owned shares of IEnova for 4.0 billion Mexican pesos (approximately $202 million in U.S. dollars) in cash, which increased our ownership interest in IEnova from 96.4% to 99.9%. We describe these transactionsvariable interests in Note 1 of the Notes to Condensed Consolidated Financial Statements.
In addition to being traded on the New York Stock Exchange, Sempra’s common stock is also listed on the Mexican Stock Exchange under the ticker symbol SRE.MX. IEnova’s shares were delisted from the Mexican Stock Exchange effective October 15, 2021. In connection with the delisting, we are maintaining a trust for the purpose of purchasing the 1,212,981 remaining publicly owned IEnova shares for 78.97 Mexican pesos per share, the same price per share that was offered in our cash tender offer. The trust will be in place through the earlier of April 14, 2022 or the date on which we acquire all remaining publicly owned IEnova shares.
Sempra LNGInfrastructure
Sempra LNG is pursuing developmentInfrastructure expects to fund capital expenditures, investments and operations in part with available funds, including credit facilities, and cash flows from operations of additional LNG export facilities on the Gulf Coast and Pacific Coast of North America through its proposed Cameron LNG JV Phase 2 liquefaction expansion project in Louisiana, ECA LNG liquefaction export projects in Mexico, and Port Arthur LNG liquefaction export project in Texas. Sempra LNGInfrastructure businesses. We expect Sempra Infrastructure will require additional funding for the development and expansion of its portfolio of projects, which may be financed through a combination of operating cash flows, funding from the parent and minority interest owners, bank financing, issuances of debt, project financing accessing the capital markets and participatingpartnering in JVs.
On June 1, 2022, we completed the sale of a 10% NCI in SI Partners to ADIA for cash proceeds of $1.7 billion. We used a portion of the proceeds from the sale to ADIA to repay commercial paper borrowings used to repurchase $750 million in shares of our common stock ($300 million of which was completed in the fourth quarter of 2021, $200 million of which was completed in the first quarter of 2022 and $250 million of which was completed in the second quarter of 2022), and we used the remaining proceeds to help fund capital expenditures at Sempra California and Sempra Texas Utilities and to further strengthen our balance sheet.
Following the closing of the ADIA transaction, Sempra, KKR and ADIA directly or indirectly own a 70%, 20%, and 10% interest, respectively, in SI Partners. The sale of NCI in SI Partners to ADIA has reduced our ownership interest in SI Partners and requires us to involve a new minority partner in making certain business decisions. Moreover, the decrease in our ownership of SI Partners also decreases our share of the cash flows, profits and other benefits these businesses currently or may in the future produce.
In the nine months ended September 30, 2022, SI Partners distributed $146 million to its minority shareholders.
LNG and Net-Zero Solutions
In 2022 to date, Sempra Infrastructure has entered into the following non-binding HOAs for the negotiation and potential finalization of definitive SPAs with:
▪PGNiG for a 20-year term for 2 Mtpa of LNG from the proposed Cameron LNG JV liquefaction expansion project (Cameron LNG JV Phase 2 project) and 1 Mtpa from the proposed PA LNG Phase 1 project.
▪INEOS Energy Trading Ltd., a subsidiary of INEOS Ltd., for a 20-year term for approximately 1.4 Mtpa of LNG from the proposed PA LNG Phase 1 project or the proposed Cameron LNG JV Phase 2 project, with amounts to be allocated between the two projects at Sempra Infrastructure’s election.
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▪RWE Supply & Trading GmbH, a subsidiary of RWE AG, for a 15-year term for 2.25 Mtpa of LNG from the proposed PA LNG Phase 1 project.
▪ConocoPhillips for a 20-year term for 5 Mtpa of LNG from the proposed PA LNG Phase 1 project. The HOA is further discussed below.
The ultimate participation in and offtake from the proposed projects remain subject to negotiation and finalization of definitive agreements, among other factors, and the HOAs do not commit any party to enter into definitive agreements with respect to any of the applicable proposed projects.
Cameron LNG JV Liquefaction Expansion Project (Phase 2)Project. Cameron LNG JV is developing a proposed expansion project that would add one liquefaction train with an expected maximum production capacity of approximately 6.75 Mtpa and would increase the production capacity of the existing three trains by up to approximately 1 Mtpa through debottlenecking activities. The Cameron LNG JV site can accommodate additional trains beyond the proposed Cameron LNG JV Phase 2 project.
Cameron LNG JV haspreviously received the major permits and FTA and non-FTA approvals necessary to expandassociated with the current configuration of the Cameron LNG JV liquefaction project beyond Phase 1. The permits for the Phase 2 project currently includepotential expansion that included up to two additional liquefaction trains and up to two additional full containment LNG storage tanks. However,In January 2022, Cameron LNG JV plans to filefiled an amendment, subject to approval by the FERC, to modify the permits to allow the use of electric drives, instead of gas turbine drives, which would reduce overall emissions. We expectThe amendment, if approved, would also change the proposeddesign from a two-train gas turbine expansion project will initially have one trainto a one-train electric drive expansion along with offtake capacity of over 6 Mtpa, with the abilityother design enhancements that, together, are expected to increase capacity with debottlenecking,result in a more cost-effective and efficient facility, while also reducing overall greenhouse gas emissions.
Sempra Infrastructure and the site can accommodate additional trains beyond Phase 2.
Sempra has entered into MOUs with TOTALother Cameron LNG JV partners, namely affiliates of TotalEnergies SE, Mitsui & Co., Ltd. and Japan LNG Investment, LLC, a company jointly owned by Mitsubishi Corporation that provide a framework for cooperationand Nippon Yusen Kabushiki Kaisha, have entered into an HOA for the potential development of and 100% of the offtake from the potential Cameron LNG JV Phase 2 project. The HOA provides a commercial framework for the proposed project, including the contemplated allocation to Sempra Infrastructure of 50.2% of the fourth train production capacity and 25% of the debottlenecking capacity from the project under tolling agreements. The HOA contemplates the remaining capacity to be allocated equally to the existing Cameron LNG JV Phase 1 customers. Sempra Infrastructure plans to sell the LNG corresponding to its allocated capacity from the proposed Cameron LNG JV Phase 2 project under long-term SPAs prior to making a final investment decision. The HOA is a non-binding arrangement. The ultimate participation ofin and offtake by TOTALSempra Infrastructure, TotalEnergies SE, Mitsui & Co., Ltd. and Mitsubishi Corporation remainsJapan LNG Investment, LLC remain subject to negotiation and finalization of definitive agreements, among other factors, and TOTAL SE, Mitsui & Co., Ltd. and Mitsubishi Corporation have no commitmentthe HOA does not commit any party to participate in or enter into offtakedefinitive agreements with respect to the proposed Cameron LNG JV Phase 2 project.
Sempra Infrastructure, the other Cameron LNG JV partners, and Cameron LNG JV have entered into a Phase 2 Project Development Agreement under which Sempra Infrastructure, subject to certain conditions and ongoing approvals by the Cameron LNG JV board, will manage and lead the Cameron LNG JV Phase 2 project development work up to a final investment decision by Cameron LNG JV.
Cameron LNG JV, upon the unanimous approval of the Cameron LNG JV board, awarded two FEED contracts, one to Bechtel and the other to a joint venture between JGC America Inc. and Zachry Industrial Inc. At the conclusion of the resulting competitive FEED process, we expect to select one contractor to be the EPC contractor for the proposed Cameron LNG JV Phase 2 project.
In connection with the execution of the Phase 2 project until such definitive agreements are established.Project Development Agreement and the award of the FEED contracts, the Cameron LNG JV board unanimously approved an expansion development budget to fund, subject to the terms of the Phase 2 Project Development Agreement, development work necessary to prepare for a potential final investment decision.
Expansion of the Cameron LNG JV liquefaction facility beyond the first three trains is subject to certain restrictions and conditions under the JV project financing agreements, including among others, timingscope restrictions on expansion of the project unless appropriate prior consent is obtained from the Phase 1existing project lenders. Under the Cameron LNG JV equity agreements, the expansion of the project requires the unanimous consent of all the partners, including with respect to the equity investment obligation of each partner. Discussions among allWorking under the Cameron LNG JV partners have been taking place regarding how an expansion mayframework established in the Phase 2 Project Development Agreement, Sempra Infrastructure is targeting completing the FEED work in the summer of 2023 and expects to be structured, includingin a facility design utilizing electric drives, and we expect that discussions will continue. Although we are working towards makingposition to make a final investment decision around the end of 2022, theshortly thereafter. The timing of when or if Cameron LNG JV will receive approval from the FERC to amend its permits and from the permitsexisting project lenders to conduct the expansion under its financing agreements is uncertain, and there is no assurance that Sempra Infrastructure will complete the necessary development work or that the Cameron LNG JV members will unanimously agree in a timely manner or at all on an expansion structure,making a final investment decision, which, if not accomplished, would materially and adversely impact the development of the Cameron LNG JV Phase 2 project.
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The development of the potentialproposed Cameron LNG JV Phase 2 project is subject to numerous other risks and uncertainties, including securing binding customer commitments; reaching unanimous agreement with our partners to proceed; obtaining and maintaining a number of permits and regulatory approvals;approvals, including approval from the FERC for amendments to existing permits; securing certain consents under the existing financing agreements and securing sufficient new financing; negotiating and completing suitable commercial agreements, including a definitive EPC contract equity acquisitionand definitive Cameron LNG JV tolling and governance agreements; reaching a positive final investment decision; and other factors associated with this potential investment. For a discussion of these risks, see “Part I – Item 1A. Risk Factors” in the Annual Report.
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ECA LNG Liquefaction Export Projects
Projects.Sempra LNG and IEnova areInfrastructure is developing two separate natural gas liquefaction export projects at IEnova’sits existing ECA Regas Facility. The liquefaction export projects, which are planned for development in two phases (a mid-scale project by ECA LNG Phase 1 that is under construction and a proposed large-scale project by ECA LNG Phase 2), are being developed to provide buyers with direct access to North American west coast LNG supplies. We do not expect the construction or operation of the ECA LNG Phase 1 project to disrupt operations at the ECA Regas Facility. However, construction of the proposed ECA LNG Phase 2 project would conflict with the current operations at the ECA Regas Facility, which currently has long-term regasification contracts for 100% of the regasification facility’s capacity through 2028, making the decisions on whether and how to pursue the ECA LNG Phase 2 project dependent in part on whether the investment in a large-scale liquefaction facility would, over the long term, be more beneficial financially than continuing to supply regasification services under our existing contracts. We have planned measures to limit disruption of operations at the ECA Regas Facility with the construction of the ECA LNG Phase 1 project.
In March 2019, ECA LNG received two authorizations from the DOE to export U.S.-produced natural gas to Mexico and to re-export LNG to non-FTA countries from its ECA LNG Phase 1 project, which is a one-train natural gas liquefaction facility with a nameplate capacity of 3.25 Mtpa and initial offtake capacity of approximately 2.5 Mtpa that is under construction, and its proposed ECA LNG Phase 2 project that is inunder development.
In April 2020, ECA LNG Phase 1 executed definitive 20-year LNG sale and purchase agreementsSPAs with Mitsui & Co., Ltd. for approximately 0.8 Mtpa of LNG and with an affiliate of TOTALTotalEnergies SE for approximately 1.7 Mtpa of LNG. In December 2020, an affiliate of TOTALTotalEnergies SE acquired a 16.6% ownership interest in ECA LNG Phase 1, with Sempra LNG and IEnova eachInfrastructure retaining a 41.7%an 83.4% ownership interest. Our MOUMOUs and/or HOAs with Mitsui & Co., Ltd. provides, TotalEnergies SE, and ConocoPhillips, which we describe below, provide a framework for Mitsui & Co., Ltd.’stheir potential offtake of LNG from, and potential acquisition of an equity interest in, ECA LNG Phase 2.
In February 2020, we entered into an EPC contract with Technip Energies for the engineering, procurement and construction of the ECA LNG Phase 1 project. Since reaching a positive final investment decision with respect to the project in November 2020, we released Technip Energies to commence workhas been working to construct the ECA LNG Phase 1 project. The total price of the EPC contract is estimated at approximately $1.5 billion. We estimate that capital expenditures will approximate $2.0 billion, including capitalized interest and project contingency. The actual cost of the EPC contract and the actual amount of these capital expenditures may differ perhaps substantially from our estimates. We expectanticipate ECA LNG Phase 1 to begin producing LNG byin time to commence commercial operations, which we expect to occur in the endmiddle of 2024.2025.
In December 2020, ECA LNG Phase 1 entered intohas a five-year loan agreement with a syndicate of seven external lenders that matures in December 2025 for an aggregate principal amount of up to $1.6$1.3 billion, of which $291$455 million was outstanding at September 30, 2021.2022. Proceeds from the loan are being used to finance the cost of construction of the ECA LNG Phase 1 project. We discuss the details of this loan in Note 7 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 7 of the Notes to Consolidated Financial Statements in the Annual Report.
We do not expect the construction or operation of the ECA LNG Phase 1 project to disrupt operations at the ECA Regas Facility, and have planned measures to limit disruption of operations should any arise. However, construction of the proposed ECA LNG Phase 2 project would conflict with the current operations at the ECA Regas Facility, which currently has long-term regasification contracts for 100% of the regasification facility’s capacity through 2028, making the decisions on whether, when and how to pursue the ECA LNG Phase 2 project dependent in part on whether the investment in a large-scale liquefaction facility would, over the long term, be more beneficial financially than continuing to supply regasification services under our existing contracts.
The construction of the ECA LNG Phase 1 project and the development of the potential ECA LNG Phase 2 project are subject to numerous risks and uncertainties. For Phase 1, these include maintaining permits and regulatory approvals; construction delays; securing and maintaining commercial arrangements, such as gas supply and transportation agreements; the impact of recent and proposed changes to the law in Mexico; and other factors associated with the project and its construction. For the ECA LNG Phase 2 project, these include obtaining binding customer commitments; the receipt of a number of permits and regulatory approvals; obtaining financing; negotiating and completing suitable commercial agreements, including a definitive EPC contract, equity acquisition and governance agreements, LNG sales agreements and gas supply and transportation agreements; reaching a positive final investment decision; the impact of recent and proposed changes to the law in Mexico; and other factors associated with this potential investment. In addition, as we discuss in Note 11 of the Notes to Condensed Consolidated Financial Statements, an unfavorable decision on certain property disputes or permit challenges an unfavorable judgment that does not allow IEnova to secure new or renew existing LDA authorizations, or an extended dispute with existing customers at the ECA Regas Facility, could materially adversely affect the development and construction of these projects and Sempra’s financial condition, results of operations, financial condition, cash flows andand/or prospects, including the impairment of all or a substantial portion of the capital costs invested in the projects to date. For a discussion of these risks, see “Part I – Item 1A. Risk Factors” in the Annual Report.
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Port Arthur LNG Liquefaction Export Project
. Sempra LNGInfrastructure is developing a proposed natural gas liquefaction export project, to be developed in two phases, on a greenfield site that it owns in the vicinity of Port Arthur, Texas, located along the Sabine-Neches waterway. Sempra LNGInfrastructure received authorizations from the DOE in August 2015 and May 2019 that collectively permit the LNG to be produced from the proposed Port ArthurPA LNG Phase 1 project to be exported to all current and future FTA and non-FTA countries.
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 In February 2020, Sempra Infrastructure filed an application with the DOE to permit LNG produced from the proposed PA LNG Phase 2 project to be exported to all current and future FTA and non-FTA countries.
In April 2019, the FERC approved the siting, construction and operation of the proposed Port ArthurPA LNG liquefaction facility,Phase 1 project facilities, along with certain natural gas pipelines, including the Louisiana Connector and Texas Connector Pipelines,pipelines, that could be used to supply feed gas to the liquefaction facility assumingif and when the project is completed. In February 2020, Sempra LNGInfrastructure filed aan application, subject to approval by the FERC, application for the siting, construction and operation of a second phase at the proposed Port ArthurPA LNG facility,Phase 2 project, including the potential addition of up to two liquefaction trains.
In February 2020, we entered into an EPC contract with Bechtel for the proposed Port ArthurPA LNG liquefactionPhase 1 project. The EPC contract contemplates the construction of two liquefaction trains with a nameplate capacitycapable of producing, under optimal conditions, up to approximately 13.5 Mtpa, two LNG storage tanks, a marine berth and associated loading facilities and related infrastructure necessary to provide liquefaction services. We have no obligation to move forward onunder the EPC contract, and we may release Bechtel to perform portions of the work pursuant to limited notices to proceed. We have the option to fully release Bechtel to perform all of the work to construct the Port Arthur LNG liquefaction export project only after we reach a positive final investment decision with respect to the project and after certain other conditions are met, including obtaining project financing. In December 2020,October 2022, we amended and restated the EPC contract to reflect an estimated price of approximately $8.7 billion. Since we did not issue a$10.5 billion, subject to adjustments. The contract price is valid until May 8, 2023, subject to certain conditions, including timely issuances of limited notices to proceed. While the agreement contemplates issuance of the full notice to proceed by July 15, 2021,February 8, 2023, the agreement by both partiesalso includes mechanisms that allow us to delay issuance of the full notice to proceed until up to May 8, 2023, subject to certain conditions including a price escalation of up to a maximum of $149 million. Sempra Infrastructure and Bechtel must mutually agree to an adjustment to the contract price if the full notice to proceed is issued after May 8, 2023. Any agreement on such an amendment to the EPC contract is necessary. Such amendment may adjust the EPC contract price and the EPC schedule and could potentially include other changes to the work and terms and conditions of the EPC contract prior to Port Arthur LNG having the right to issue a full notice to proceed thereunder. Any agreement on such an amendment by both parties or on favorable terms to Sempra Infrastructure cannot be assured. Either party may terminate the EPC contract if the full notice to proceed is not issued by May 8, 2024.
In December 2018, Polish Oil & Gas Company (PGNiG)July 2022, Sempra Infrastructure and Port Arthur LNGConocoPhillips entered into a definitive 20-year agreement fornon-binding HOA to develop Sempra Infrastructure’s proposed PA LNG Phase 1 project and jointly participate in other related energy infrastructure in Southeast Texas and the sale and purchasePacific Coast of 2 MtpaMexico, including ECA LNG Phase 2. In addition to potential offtake of LNG per year from the Port Arthur LNG liquefaction export project. In July 2021, the agreement was terminated and PGNiG and Sempra LNG entered into an MOU to collaborate to transition the 2 Mtpa to Sempra LNG’s portfolio of projects.
In May 2019, Aramco Services Company and Sempra LNG signed a Heads of Agreement for the negotiation of a definitive 20-year LNG sale and purchase agreement for 5 Mtpa of LNG offtake from the Port Arthurproposed PA LNG liquefaction export project. The Heads of AgreementPhase 1 project, the HOA also included the negotiation ofcontemplates a potential 25%30% equity investment in the project. In January 2020, Aramco Services Companyproposed PA LNG Phase 1 project by ConocoPhillips and Sempra LNG signed an Interim Project Participation Agreement relatedthe potential for ConocoPhillips to supply additional natural gas to the proposed project. In June 2021, Aramco Services Company and Sempra LNG agreed to allow the Heads of Agreement and Interim Project Participation Agreement to expire.
In November 2019, Port Arthur LNG commenced the relocation and upgrade of approximately three miles of highway where the Port Arthur LNG liquefaction export project would be located.facility.
We continue work to progressare progressing the development of the proposed Port ArthurPA LNG liquefaction exportPhase 1 project, and are evaluatingtargeting a final investment decision in the first quarter of 2023 taking into account market demands given the current geopolitical environment, executing definitive agreements for LNG offtake and equity investments, and obtaining financing. We also continue to evaluate overall opportunities to develop the entirety of the Port Arthur site as well as potential design changes that could reduce overall emissions, including a facility design utilizing electric drives, renewable power sourcing and other technological solutions. Given uncertainties in the energy markets, including real-time developments of new technologies that could impact the design, scale and structure of the project, we continuesolutions, which may apply to evaluate the timing of a final investment decision; however, we will not make a final investment decision in 2021.any future expansions.
Development of the Port Arthur LNG liquefaction export project is subject to a number of risks and uncertainties, including obtaining binding customer commitments; identifying suitable project and equity partners; completing the required commercial agreements, such as equity acquisitionsacquisition and governance agreements, LNG sales agreements and gas supply and transportation agreements; completing construction contracts; securing and maintaining all necessary permits and approvals;approvals, including approval from the FERC; obtaining financing and incentives;incentives, such as obtaining property tax abatement; reaching a positive final investment decision; and other factors associated with the potential investment. An unfavorable outcome with respect to any of these factors could have a material adverse effect on Sempra’s financial condition, results of operations, andfinancial condition, cash flows and/or prospects, including the impairment of all or a substantial portion of the capital costs invested in the project to date. For a discussion of these risks, see “Part I – Item 1A. Risk Factors” in the Annual Report.

Vista Pacifico LNG Liquefaction Export Project.
SOURCES AND USES OF CASH
Sempra Infrastructure is developing Vista Pacifico LNG, a potential natural gas liquefaction, storage, and mid-scale export facility proposed to be located in the vicinity of Topolobampo in Sinaloa, Mexico, under an MOU with the CFE, which was subsequently updated in July 2022, that contemplates the negotiation of definitive agreements that would cover development of Vista Pacifico LNG, as well as a separate natural gas regasification project in La Paz Baja California Sur, and the potential re-routing of a portion of the Guaymas-El Oro segment of the Sonora pipeline and resumption of its operations through mutual agreements between the CFE and the Yaqui tribe. The following tables include only significant changesproposed LNG export terminal would be supplied with U.S. natural gas and would use excess natural gas and pipeline capacity on existing pipelines in cash flow activitiesMexico with the intent of helping to meet growing demand for eachnatural gas and LNG in the Mexican and Pacific markets. In November 2020, Sempra Infrastructure filed an application with the DOE to permit the export of our registrants.natural gas to Mexico and for LNG
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CASH FLOWS FROM OPERATING ACTIVITIES
(Dollars in millions)
Nine months ended September 30,SempraSDG&ESoCalGas
2021$2,981 $1,024 $1,037 
20201,629 983 1,388 
Change$1,352 $41 $(351)
Net increase in Reserve for Aliso Canyon Costs primarily due to $1,248
higher accruals and $18 lower payments
$1,266 $1,266 
Higher dividends received from Cameron LNG JV287 
Net decrease in Insurance Receivable for Aliso Canyon primarily due to $193 lower accruals and $3 higher insurance proceeds received196 196 
Release of a regulatory liability related to 2016-2018 income tax expense forecasting differences in 2020175 $86 89 
Change in income taxes receivable/payable, net166 (134)(170)
Decrease in prepaid insurance42 39 3 
Change in accounts payable86 (32)24 
Increase in greenhouse gas allowance purchases(123)(133)
Change in accounts receivable(183)29 (96)
Change in net undercollected regulatory balancing accounts (including long-term amounts in regulatory assets)(189)(80)(109)
Change in net margin posted at Sempra LNG’s marketing operations(364)
(Lower) higher net income (loss), adjusted for noncash items included in earnings(1,103)114 (1,427)
Other45 19 6 
Cash used in discontinued operations in 2020 primarily due to $1,161 income taxes paid related to the sale of our South American businesses1,051 
$1,352 $41 $(351)
produced from the proposed Vista Pacifico LNG facility to be re-exported to all current and future FTA and non-FTA countries. In April 2021, the DOE granted Vista Pacifico’s LNG export authorization application for FTA countries.

CASH FLOWS FROM INVESTING ACTIVITIES
(Dollars in millions)
Nine months ended September 30,SempraSDG&ESoCalGas
2021$(3,456)$(1,553)$(1,417)
20202,415 (1,315)(1,345)
Change$(5,871)$(238)$(72)
Distribution from Cameron LNG JV in 2020$(753)
Increase in capital expenditures(293)$(237)$(72)
Acquisition of 50% interest in ESJ in March 2021 for $79, net of $14 cash and cash equivalents acquired(65)
Lower contributions to Oncor Holdings58 
Distribution from Oncor Holdings in 2021361 
Other7 (1)
Cash provided by discontinued operations in 2020 primarily due to $5,781 proceeds, net of transaction costs paid, offset by $502 cash sold from the sale of our South American businesses(5,186)
$(5,871)$(238)$(72)
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CASH FLOWS FROM FINANCING ACTIVITIES
(Dollars in millions)
Nine months ended September 30,SempraSDG&ESoCalGas
2021$397 $506 $602 
2020(710)1,055 251 
Change$1,107 $(549)$351 
Change in borrowings and repayments of short-term debt, net$3,870 $80 $517 
Lower payments for commercial paper and other short-term debt with maturities greater than 90 days2,277 
Repurchase of common stock under ASR program in 2020500 
Lower repurchases of common stock26 
Lower advances from unconsolidated affiliates(24)
Higher purchases of NCI(43)
(Higher) lower common dividends paid(109)200 (25)
Higher payments on long-term debt and finance leases(205)(354)
Net proceeds from issuance of series C preferred stock in 2020(890)
(Lower) higher issuances of short-term debt with maturities greater than 90 days(1,296)375 
Lower issuances of long-term debt(2,646)(853)(949)
Equity contribution from Sempra800 
Other48 3 8 
Cash provided by discontinued operations in 2020 primarily from a $250 intercompany loan and $165 net increase in short term debt(401)
$1,107 $(549)$351 
Capital Expenditures, InvestmentsIn March 2022, TotalEnergies SE and Acquisitions
EXPENDITURES FOR PP&E, INVESTMENTS AND ACQUISITIONS
(Dollars in millions)
Nine months ended September 30,
 20212020
SDG&E$1,560 $1,323 
SoCalGas1,417 1,345 
Sempra Texas Utilities151 225 
Sempra Mexico325 443 
Sempra LNG362 200 
Parent and other7 6 
Total$3,822 $3,542 
Sempra Infrastructure entered into an MOU that contemplates TotalEnergies SE potentially contracting approximately one-third of the long-term export production of the proposed Vista Pacifico LNG project and potentially participating as a minority partner in the project.
The amountsMOUs related to the proposed Vista Pacifico LNG project are non-binding arrangements. The ultimate participation in and timing of capital expenditures and certain investments are generallyofftake from the proposed project remain subject to approvals by variousnegotiation and finalization of definitive agreements, among other factors, and the MOUs do not commit any party to enter into definitive agreements with respect to the project.
The development of the potential Vista Pacifico LNG project (as well as the other projects subject to the MOU with the CFE discussed above) is subject to numerous risks and uncertainties, including securing binding customer commitments; obtaining and maintaining a number of permits and regulatory approvals; securing financing; identifying suitable project partners; negotiating and completing suitable commercial agreements, including definitive EPC contracts, equity acquisition and governance agreements, LNG sales agreements and gas supply and transportation agreements; reaching a positive final investment decision; the impact of recent and proposed changes to the law in Mexico; and other governmental and environmental bodies, including the CPUC, the FERC and the PUCT, and various other factors described inassociated with this MD&A and inpotential investment. For a discussion of these risks, see “Part I – Item 1A. Risk Factors” in the Annual Report. In 2021, we expect
Hackberry Carbon Sequestration Project. Sempra Infrastructure is developing the potential Hackberry Carbon Sequestration project near Hackberry, Louisiana. This proposed project under development is designed to make capital expenditures and investments of approximately $6.1 billion, an increasepermanently sequester carbon dioxide from the $5.8 billion projected inCameron LNG JV facilities. In the third quarter of 2021, Sempra Infrastructure filed an application with the U.S. Environmental Protection Agency for a Class VI carbon injection well to advance this project.
In May 2022, Sempra Infrastructure, TotalEnergies SE, Mitsui & Co., Ltd. and Mitsubishi Corporation signed a Participation Agreement for the development of the proposed Hackberry Carbon Sequestration project. The Participation Agreement contemplates that the combined Cameron LNG JV Phase 1 and proposed Cameron LNG JV Phase 2 projects would potentially serve as the anchor source for the capture and sequestration of carbon dioxide by the proposed project. It also provides the basis for the parties to enter into a JV with Sempra Infrastructure for the Hackberry Carbon Sequestration project.
The development of the potential Hackberry Carbon Sequestration project is subject to numerous risks and uncertainties, including obtaining required consents from the Cameron LNG JV partners, securing binding customer commitments; identifying suitable project partners; obtaining and maintaining a number of permits and regulatory approvals; securing financing; negotiating and completing suitable commercial agreements, including a definitive EPC contract, and equity acquisition and governance agreements; reaching a positive final investment decision; and other factors associated with this potential investment. For a discussion of these risks, see “Part III – Item 7. MD&A – Capital Resources and Liquidity”1A. Risk Factors” in the Annual Report. The increase is primarily attributable to an increase in expected contributions to our
Off-Balance Sheet Arrangements. Our investment in Oncor Holdings and pipeline expansion projects at Sempra Mexico, offset byCameron LNG JV is a delay of capital expenditures related to ECA LNG Phase 1 at Sempra LNG.
COMMITMENTS
variable interest in an unconsolidated entity. We discuss significant changes to contractual commitmentsvariable interests in the first nine months of 2021, none of which were outside the ordinary course of our business, in Notes 7 and 11Note 1 of the Notes to Condensed Consolidated Financial Statements.
OFF-BALANCE SHEET ARRANGEMENTS
In June 2021, Sempra provided a promissory note, which constitutes a guarantee, for the benefit of Cameron LNG JV with a maximum exposure to loss of $165 million. The guarantee will terminate upon full repayment of Cameron LNG JV’s debt,
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scheduled to occur in 2039, or replenishment of the amount withdrawn by Sempra LNGInfrastructure from the SDSRA. We discuss this guarantee in Note 6 of the Notes to Condensed Consolidated Financial Statements.
In March 2021, Cameron LNG JV reached financial completion of the three-train liquefaction project and Sempra’s guarantees for a maximum aggregate amount of $4.0 billion were terminated.
In July 2020, Sempra entered into a Support Agreement, which contains a guarantee and represents a variable interest, for the benefit of CFIN with a maximum exposure to loss of $979 million. The guarantee will terminate upon full repayment of the guaranteed debt by 2039, including repayment following an event in which the guaranteed debt is put to Sempra. We discuss this guarantee in Notes 1, 6 and 9 of the Notes to Condensed Consolidated Financial Statements.
Our investments in Oncor Holdings and Cameron LNG JV and our Support AgreementEnergy Networks
Construction Projects. Sempra Infrastructure completed construction of additional terminals for the benefitreceipt, storage, and delivery of CFINliquid fuels in the vicinity of Puebla and Topolobampo. Sempra Infrastructure is also developing terminals for the receipt, storage, and delivery of liquid fuels in the vicinity of Manzanillo and Ensenada.
As part of an industrywide audit and investigative process initiated by the CRE to enforce fuel procurement laws, federal prosecutors conducted inspections at several refined products terminals, including Sempra Infrastructure's refined products terminal in Puebla, to confirm that the gasoline and/or diesel in storage were legally imported. During the inspection of the Puebla terminal in September 2021, a federal prosecutor took samples from all the train and storage tanks in the terminal and ordered that the facility be temporarily shut down during the pendency of the analysis of the samples and investigation, while leaving the terminal in Sempra Infrastructure’s custody. In November 2021, the CRE notified Sempra Infrastructure that it had started a
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process to revoke Sempra Infrastructure’s storage permit at the Puebla terminal. In December 2021, Sempra Infrastructure filed its response to the CRE. In May 2022, the CRE provided a final resolution that stopped the permit revocation process. In August 2022, the federal prosecutor concluded the investigation and lifted the order that had temporarily shut down the facility. Commissioning activities were restarted, and commercial operations commenced in October 2022.
Construction of the Topolobampo terminal was completed in May 2022, at which time commissioning activities commenced. We expect the Topolobampo terminal will commence commercial operations in the first quarter of 2023, subject to the receipt of pending permits.
Expected commencement dates could be delayed by worsening or extended disruptions of project construction caused by factors outside our control, including the COVID-19 pandemic. Sempra Infrastructure is continuing to monitor the impacts of the COVID-19 pandemic on cash flows and results of operations.
The ability to successfully complete major construction projects is subject to a number of risks and uncertainties. For a discussion of these risks and uncertainties, see “Part I – Item 1A. Risk Factors” in the Annual Report.
Clean Power
Construction Projects. ESJ completed construction and began commercial operations of a second, 108-MW wind power generation facility on January 15, 2022. This second wind power generation facility is fully contracted by SDG&E under a long-term PPA expiring in 2042.
In March 2022, TotalEnergies SE and Sempra Infrastructure entered into a non-binding MOU that provides a framework for cooperation in the development of North American renewable energy projects. The MOU includes the potential acquisition by TotalEnergies SE of a targeted 30% equity interest in certain renewable and energy storage development projects that are variable interests. Sempra’sunder development by Sempra Infrastructure in Northern Mexico. The ultimate participation of TotalEnergies SE remains subject to negotiation and finalization of definitive agreements, among other businesses may also enter into arrangements that could include variable interests. Wefactors, and TotalEnergies SE and Sempra Infrastructure have no commitment to participate in any or all these projects unless such definitive agreements are established.
Acquisition of ESJ. As we discuss variable interests in Note 15 of the Notes to Condensed Consolidated Financial Statements.Statements, in March 2021, Sempra Infrastructure increased its ownership interest in ESJ from 50% to 100% by acquiring Saavi Energía’s 50% equity interest in ESJ.
Legal and Regulatory Matters
See Note 11 of the Notes to Condensed Consolidated Financial Statements for discussions of the following legal and regulatory matters affecting our operations in Mexico:
Energía Costa Azul
▪Land Disputes
▪Environmental and Social Impact Permits
One or more unfavorable final decisions on these land disputes or environmental and social impact permit challenges could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
Sonora Pipeline
▪Guaymas-El Oro Segment
Our investment in the Guaymas-El Oro segment of the Sonora pipeline could be subject to impairment if Sempra Infrastructure is unable to make certain repairs (which have not commenced) or re-route a portion of the pipeline (which has not been agreed to by the parties, but is subject to negotiation pursuant to a non-binding MOU and a Shareholders’ Agreement that remains subject to regulatory and corporate authorizations) and resume operations or if Sempra Infrastructure terminates the contract and is unable to obtain recovery. Any such occurrence could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.
Regulatory and Other Actions by the Mexican Government
▪Offtakers of Legacy Generation Permits
▪Amendments to Mexico’s Electricity Industry Law
▪Amendments to Mexico’s Hydrocarbons Law
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Sempra Infrastructure and other parties affected by these resolutions, orders, decrees, regulations and proposed amendments to Mexican law have challenged them by filing amparo and other claims, some of which have been granted injunctive relief. The court-ordered injunctions or suspensions provide temporary relief until Mexico’s federal district court or Supreme Court ultimately resolves the amparo and other claims. An unfavorable decision on one or more of these amparo or other challenges, the potential for extended disputes, or the possibility of future reforms to the energy industry through further amendments to Mexican laws or rules may impact our ability to operate our facilities at existing levels or at all, may result in increased costs for Sempra Infrastructure and its customers, may adversely affect our ability to develop new projects, may result in decreased revenues and cash flows, and may negatively impact our ability to recover the carrying values of our investments in Mexico, any of which may have a material adverse effect on our business, results of operations, financial condition, cash flows and/or prospects.

SOURCES AND USES OF CASH
The following tables include only significant changes in cash flow activities for each of our registrants.
CASH FLOWS FROM OPERATING ACTIVITIES
(Dollars in millions)
Nine months ended September 30,SempraSDG&ESoCalGas
2022$1,455 $1,368 $(762)
20212,981 1,024 1,037 
Change$(1,526)$344 $(1,799)
Net decrease in Reserve for Aliso Canyon Costs, current and noncurrent, due to $2,052 higher payments and $1,308 lower accruals$(3,360)$(3,360)
Change in net undercollected regulatory balancing accounts (including long-term amounts in regulatory assets)(453)$67 (520)
Change in income taxes receivable/payable, net(224)12 35 
Lower distributions received from Cameron LNG JV(108)
Increase in purchases of GHG allowances(92)(31)(45)
Change in inventory(55)(109)
Change in customer deposits73 28 37 
Funds fully drawn against Gazprom’s letters of credit, net of amounts applied89 
Change in net margin posted99 
Higher GHG emission obligations110 15 97 
Change in accounts payable150 162 
Change in accounts receivable296 (32)170 
Higher proceeds received from Insurance Receivable for Aliso Canyon319 319 
Higher net income, adjusted for noncash items included in earnings1,658 131 1,544 
Other(28)(8)33 
$(1,526)$344 $(1,799)

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CASH FLOWS FROM INVESTING ACTIVITIES
(Dollars in millions)
Nine months ended September 30,SempraSDG&ESoCalGas
2022$(3,183)$(1,643)$(1,394)
2021(3,456)(1,553)(1,417)
Change$273 $(90)$23 
Repayment of note receivable from IMG$626 
Decrease (increase) in capital expenditures66 $(91)$23 
Acquisition of 50% interest in ESJ in March 2021 for $79, net of $14 of cash and cash equivalents acquired65 
Contributions to Cameron LNG JV in 2022(19)
Higher contributions to Oncor Holdings(105)
Distributions from Oncor Holdings in 2021(361)
Other1 1 
$273 $(90)$23 
CASH FLOWS FROM FINANCING ACTIVITIES
(Dollars in millions)
Nine months ended September 30,SempraSDG&ESoCalGas
2022$1,936 $469 $2,172 
2021397 506 602 
Change$1,539 $(37)$1,570 
Higher issuances of long-term debt$2,893 $650 $697 
Higher (lower) issuances of short-term debt with maturities greater than 90 days1,826 (375)800 
Proceeds from sale of NCI to ADIA in 2022, net of $12 of transaction costs1,719 
Lower payments on long-term debt and finance leases1,245 565 
Lower purchases of noncontrolling interests221 
Lower preferred dividends paid55 
Lower equity contributions from Sempra Energy(150)
(Higher) lower common dividends paid(89)(100)75 
Distributions to SI Partners’ minority shareholders in 2022(146)
Higher repurchases of common stock(439)
Higher payments for commercial paper and other short-term debt with maturities greater than 90 days(2,295)(375)
Change in borrowings and repayments of short-term debt, net(3,437)(401)155 
Other(14)(1)(7)
$1,539 $(37)$1,570 
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Capital Expenditures, Investments and Acquisitions
EXPENDITURES FOR PP&E, INVESTMENTS AND ACQUISITIONS
(Dollars in millions)
Nine months ended September 30,
 20222021
SDG&E$1,651 $1,560 
SoCalGas1,394 1,417 
Sempra Texas Utilities256 151 
Sempra Infrastructure508 687 
Parent and other6 7 
Total$3,815 $3,822 
The amounts and timing of capital expenditures and certain investments are generally subject to approvals by various regulatory and other governmental and environmental bodies, including the CPUC, the FERC and the PUCT, and various other factors described in this MD&A and in “Part I – Item 1A. Risk Factors” in the Annual Report. In 2022, we expect to make capital expenditures and investments of approximately $5.7 billion (which excludes capital expenditures that will be funded by unconsolidated entities) a decrease from the $6.2 billion projected in “Part II – Item 7. MD&A – Capital Resources and Liquidity” in the Annual Report. The decrease is primarily attributable to a delay in certain capital expenditures of approximately $400 million at SDG&E and $100 million at SoCalGas.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We viewManagement views certain accounting policiesestimates as critical because their application is the most relevant, judgmental and/or material to our financial position and results of operations, and/or because they require the use of material judgments and estimates. We discuss thesecritical accounting policiesestimates in “Part II – Item 7. MD&A” in the Annual Report.
We describe our significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report. We follow the same accounting policies for interim reporting purposes.
NEW ACCOUNTING STANDARDS
We discuss the relevantrecent accounting pronouncements that have recently been issued or become effective and have had or may have an impacta significant effect on our financial statements and/or disclosures in Note 2 of the Notes to Condensed Consolidated Financial Statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We provide disclosure regarding derivative activity in Note 8 of the Notes to Condensed Consolidated Financial Statements. We discuss our market risk and risk policies in detail in “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report.
COMMODITY PRICE RISK
Sempra Infrastructure is generally exposed to commodity price risk indirectly through its LNG, natural gas pipelines and storage, and power-generating assets. In the first nine months of 2021, there2022, a hypothetical 10% unfavorable change in commodity prices would have resulted in a change in the fair value of our commodity-based natural gas and electricity derivatives of $7 million at September 30, 2022 compared to $3 million at December 31, 2021.
The one-day value at risk for SDG&E and SoCalGas’ commodity positions were no significant changes in our exposure$6 million and negligible, respectively, at September 30, 2022 compared to commodity price risk.$5 million and $1 million, respectively, at December 31, 2021.
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INTEREST RATE RISK
The table below shows the nominal amount of our debt:
NOMINAL AMOUNT OF DEBT(1)
NOMINAL AMOUNT OF DEBT(1)
NOMINAL AMOUNT OF DEBT(1)
(Dollars in millions)(Dollars in millions)(Dollars in millions)
September 30, 2021December 31, 2020 September 30, 2022December 31, 2021
SempraSDG&ESoCalGasSempraSDG&ESoCalGas SempraSDG&ESoCalGasSempraSDG&ESoCalGas
Short-term:Short-term:Short-term:
California Utilities$375 $375 $— $113 $— $113 
Sempra CaliforniaSempra California$1,227 $— $1,227 $1,161 $776 $385 
OtherOther2,693 — — 772 — — Other523 — — 2,310 — — 
Long-term:Long-term:Long-term:
California Utilities fixed-rate$10,877 $6,418 $4,459 $10,512 $6,053 $4,459 
California Utilities variable-rate300 — 300 500 200 300 
Sempra California fixed-rateSempra California fixed-rate$12,559 $7,400 $5,159 $10,876 $6,417 $4,459 
Sempra California variable-rateSempra California variable-rate700 400 300 300 — 300 
Other fixed-rateOther fixed-rate10,456 — — 11,204 — — Other fixed-rate10,076 — — 8,591 — — 
Other variable-rateOther variable-rate339 — — 51 — — Other variable-rate455 — — 341 — — 
(1)    After the effects of interest rate swaps. Before the effects of acquisition-related fair value adjustments and reductions for unamortized discount and debt issuance costs and excluding finance lease obligations.obligations at September 30, 2022 and December 31, 2021, and before the effects of acquisition-related fair value adjustments at December 31, 2021.

An interest rate risk sensitivity analysis measures interest rate risk by calculating the estimated changes in earnings that would result from a hypothetical change in market interest rates. Earnings are affected by changes in interest rates on short-term debt and variable-rate long-term debt. If weighted-average interest rates on short-term debt outstanding at September 30, 20212022 increased or decreased by 10%, the change in earnings over the 12-month period ending September 30, 20222023 would be approximately $1$5 million. If interest rates increased or decreased by 10% on all variable-rate long-term debt at September 30, 2021,2022, after considering the effects of interest rate swaps, the change in earnings over the 12-month period ending September 30, 20222023 would be approximately $1$4 million.
FOREIGN CURRENCY AND INFLATION RATE RISK
We discuss our foreign currency and inflation exposureexposures in “Part I – Item 2. MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations” in this report and in “Part II – Item 7. MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations” in the Annual Report. At September 30, 2021,2022, there were no significant changes to our exposure to foreign currency rate risk since December 31, 2020.2021.
In 2022, SDG&E and SoCalGas have experienced inflationary pressures from increases in various costs, including the cost of natural gas, electric fuel and purchased power, labor, materials and supplies, as well as availability of labor and materials. Sempra Texas Utilities has experienced increased costs of labor and materials and does not have specific regulatory mechanisms that allow for recovery of higher costs due to inflation. If such costs were to continue to be subject to significant inflationary pressures and we are not able to fully recover such higher costs in rates or there is a delay in recovery, these increased costs may have a significant effect on Sempra’s, SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.
Sempra Infrastructure has experienced inflationary pressures from increases in various costs, including the cost of labor, materials and supplies. Sempra Infrastructure generally secures long-term contracts that are U.S. dollar-denominated or referenced and are periodically adjusted for market factors, including inflation, and Sempra Infrastructure generally enters into lump-sum contracts for its large construction projects in which much of the risk during construction is absorbed or hedged by the EPC contractor. If additional costs were to become subject to significant inflationary pressures, we may not be able to fully recover such higher costs through contractual adjustments for inflation, which may have a significant effect on Sempra’s results of operations, financial condition, cash flows and/or prospects.
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ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Sempra, SDG&E and SoCalGas maintain disclosure controls and procedures designed to ensure that information required to be disclosed in their respective reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and is accumulated and communicated to the management of each company, including each respective principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. In designing and evaluating these controls and procedures, the management of each company recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives; therefore, the management of each company applies judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Under the supervision and with the participation of the principal executive officers and principal financial officers of Sempra, SDG&E and SoCalGas, each such company’s management evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of September 30, 2021,2022, the end of the period covered by this report. Based on these evaluations, the principal executive officers and principal financial officers of Sempra, SDG&E and SoCalGas concluded that their respective company’s disclosure controls and procedures were effective at the reasonable assurance level as of such date.
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INTERNAL CONTROL OVER FINANCIAL REPORTING
In April 2021, SDG&E implemented a new customer information system to replace its legacy system. The system has been designed and implemented to provide customers an enhanced digital experience and enhance the overall system of internal control over financial reporting through further automation and integration of business processes, including revenue. In connection with the implementation, SDG&E performed pre-implementation planning, design and testing of internal controls that became effective in the second quarter of 2021. SDG&E continues to conduct post-implementation monitoring and process modifications in order to maintain an effective control framework.
In January 2021, IEnova implemented a new enterprise resource planning system (ERP system) to replace its legacy system. The implementation increases user access security and automation of internal controls in certain of IEnova’s business processes, including accounting, back office and financial reporting, which we consider to be material to Sempra. Management has taken steps to help ensure that controls were appropriately designed and implemented in connection with the integration of and transition to the new ERP system. In the third quarter of 2021, IEnova completed its review and enhancement of the design and related documentation of its internal control over financial reporting in connection with its implementation of the new ERP system.
Other than SDG&E’s continued monitoring and modification of its internal controls in connection with its implementation of a new customer information system and IEnova’s completion of its review and enhancement of its internal controls in connection with its implementation of a new ERP system, thereThere have been no changes in Sempra’s, SDG&E’s or SoCalGas’ internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, any such company’s internal control over financial reporting.


PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not party to, and our property is not the subject of, any material pending legal proceedings (other than ordinary routine litigation incidental to our businesses) except for the matters (1) described in Notes 10 and 11 of the Notes to Condensed Consolidated Financial Statements in this report and in Notes 15 and 16 of the Notes to Consolidated Financial Statements in the Annual Report, or (2) referred to in “Part I – Item 2. MD&A” in this report or in “Part I – Item 1A. Risk Factors” or “Part II – Item 7. MD&A” in the Annual Report.
ITEM 1A. RISK FACTORS
When evaluating our company and its subsidiaries and any investment in our or their securities, you should consider carefully the risk factors and all other information contained in this report and in the other documents we file with the SEC (including those filed subsequent to this report), including the factors discussed above in “Part I – Item 2. MD&A” in this report and those discussed in “Part I – Item 1A. Risk Factors” and “Part II – Item 7. MD&A” in the Annual Report. This section supplements the risk factors described in our Annual Report by replacing with modified and updated information the disclosure that appears under the below heading in the Annual Report in “Part I – Item 1A. Risk Factors – Risks Related to Our Businesses Other Than the California Utilities and Our Interest in Oncor – Foreign Operations Risks – Our international businesses and operations expose us to legal, tax, economic, geopolitical, management oversight, foreign currency and inflation risks and challenges.” Any of the risks and other information discussed in this report or any of the risk factors discloseddiscussed in “Part I – Item 1A. Risk Factors” or “Part II – Item 7. MD&A” in the Annual Report, as well as additional risks and uncertainties not currently known to us or that we currently deem to be immaterial, could materially adversely affect our businesses, cash flows, results of operations, financial condition, cash flows, prospects and/or the trading prices of our securities or those of our subsidiaries.
Mexican Government Influence on Economic and Energy Matters
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The Mexican government has exercised, and continues to exercise, significant and increasing influence over the Mexican economy and energy sector and is proposing additional changes that, in each case, could fundamentally impact private investment in this sector.
With respect to the electricity market, the Mexican legislature is currently considering proposed constitutional reform that would, among other things, make the CFE the only entity allowed to commercialize electric energy in Mexico, thereby eliminating the wholesale electricity market entirely. This reform would also limit the overall capacity and types of plants eligible to generate electricity for the CFE to commercialize, resulting in the cancelation of electricity generation permits and contracts for the sale of electricity to the CFE, including permits at all of IEnova’s operational power generation facilities. Recent Mexican governmental actions in the electricity market also include resolutions, orders, decrees, regulations and proposed amendments to Mexican law that could, among other things, threaten the prospects for private-party renewable energy generation in the country; limit the ability to dispatch renewable energy and receive or maintain operation permits; and increase costs of electricity for legacy renewables and cogeneration energy contract holders.
With respect to midstream and downstream activities, recent governmental actions include amendments in June 2021 to Mexico’s General Foreign Trade Rules designed to limit private parties from obtaining authorizations for the import and export of hydrocarbons, refined products, petrochemicals, and biofuels. IEnova has filed amparo claims to challenge these amendments, which would negatively impact the ability to renew the existing authorizations held by the ECA Regas Facility and the Veracruz terminal and the ability to obtain authorizations for terminals or other projects under construction or in development in the vicinity of Topolobampo, Manzanillo and Ensenada, including the proposed ECA LNG liquefaction projects. In addition, amendments to Mexico’s Hydrocarbons Law that give SENER and the CRE additional powers to suspend and revoke permits were published in May 2021. While the courts have enjoined enforcement of these amendments pending a final disposition, the amendments provide that suspension of permits will be determined by SENER or the CRE when a danger to national security, energy security, or the national economy is foreseen, and also provide new grounds for the revocation of permits under certain circumstances. Additionally, in the case of existing permits, the amendments direct authorities to revoke permits that fail to comply with the minimum storage requirements established by SENER or fail to comply with requirements or violate provisions established by the amended Hydrocarbons Law.
Finally, as part of an industrywide audit and investigative process initiated by the CRE to enforce fuel procurement laws, federal prosecutors conducted inspections at several refined products terminals, including IEnova’s refined products terminal in Puebla, to confirm that the gasoline and/or diesel in storage were legally imported. During the inspection of the Puebla terminal in September 2021, a federal prosecutor took samples from all the train and storage tanks in the terminal and ordered that the facility be temporarily shut down during the pendency of the analysis of the samples and investigation, while leaving the terminal in IEnova’s custody. We are unable to predict when the investigation will be completed and whether the facility will be able to resume normal operations.
We discuss these Mexican governmental actions further in “Part I – Item 2. MD&A – Capital Resources and Liquidity – Sempra Mexico” and Note 11 of the Notes to Condensed Consolidated Financial Statements. We cannot predict whether proposed changes like the constitutional reform to the electricity market or other similar governmental actions will ultimately be passed or otherwise become effective in their current forms, nor can we predict the nature or level of impact of this constitutional reform on non-electric segments of the energy sector. We also cannot predict whether actions to enjoin enforcement or suspend or overturn existing laws and other governmental actions will be successful. More generally, we cannot predict the impact that the political, social, and judicial landscape in Mexico will have on that country’s economy and energy sector and our business in Mexico. If any of the recent Mexican governmental actions are passed or otherwise become effective, if efforts to enjoin their enforcement or suspend or overturn them fail, or if other similar moves by the Mexican government are taken to curb private-party participation in the energy sector, including the passage of additional laws or regulations or increased investigative and enforcement activities, this could materially impact our ability to operate our facilities at existing levels or at all, may result in increased costs for IEnova and its customers, may adversely affect our ability to develop new projects, and may negatively impact our ability to recover the carrying values of our investments in Mexico, any of which may have a material adverse effect on our business, financial condition, results of operations, cash flows and/or prospects.
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ITEM 6. EXHIBITS
The exhibits listed below relate to each registrant as indicated. Unless otherwise indicated, the exhibits that are incorporated by reference herein were filed under File Number 1-14201 (Sempra Energy), File Number 1-40 (Pacific Lighting Corporation), File Number 1-03779 (San Diego Gas & Electric Company) and/or File Number 1-01402 (Southern California Gas Company).
EXHIBIT INDEX
Incorporated by Reference
Exhibit NumberExhibit DescriptionFiled or Furnished HerewithFormExhibit or AppendixFiling Date
EXHIBIT 3 -- ARTICLES OF INCORPORATION AND BYLAWS
Sempra
3.110-K3.102/27/20
3.28-K3.104/14/20
3.38-K3.101/09/18
3.48-K3.107/13/18
3.58-K3.106/15/20
San Diego Gas & Electric Company
3.610-K3.402/26/15
3.710-Q3.111/02/16
Southern California Gas Company
3.810-K3.0103/28/97
3.98-K3.101/31/17
EXHIBIT 4 -- INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
Certain instruments defining the rights of holders of long-term debt instruments are not required to be filed or incorporated by reference herein pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. Each registrant agrees to furnish a copy of such instruments to the SEC upon request.
Sempra Energy / San Diego Gas & Electric Company
4.18-K4.108/13/21
EXHIBIT 10 -- MATERIAL CONTRACTS
10.18-K10.109/27/21
EXHIBIT INDEX
Incorporated by Reference
Exhibit NumberExhibit DescriptionFiled or Furnished HerewithFormExhibit or AppendixFiling Date
EXHIBIT 3 -- ARTICLES OF INCORPORATION AND BYLAWS
Sempra Energy
3.110-K3.102/27/20
3.28-K3.104/14/20
3.38-K3.101/09/18
3.48-K3.107/13/18
3.58-K3.106/15/20
San Diego Gas & Electric Company
3.610-K3.402/26/15
3.710-Q3.111/02/16
Southern California Gas Company
3.810-K3.0103/28/97
3.98-K3.101/31/17
EXHIBIT 10 -- MATERIAL CONTRACTS
Sempra Energy / Southern California Gas Company
10.1X
10.2X
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EXHIBIT INDEX (CONTINUED)
Exhibit NumberExhibit DescriptionFiled or Furnished Herewith
EXHIBIT 31 -- SECTION 302 CERTIFICATIONS
Sempra Energy
31.1X
31.2X
San Diego Gas & Electric Company
31.3X
31.4X
Southern California Gas Company
31.5X
31.6X
EXHIBIT 32 -- SECTION 906 CERTIFICATIONS
Sempra Energy
32.1X
32.2X
San Diego Gas & Electric Company
32.3X
32.4X
Southern California Gas Company
32.5X
32.6X
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EXHIBIT INDEX (CONTINUED)
Exhibit NumberExhibit DescriptionFiled or Furnished Herewith
EXHIBIT 101 -- INTERACTIVE DATA FILE
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.X
101.SCHInline XBRL Taxonomy Extension Schema Document.X
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.X
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.X
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.X
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.X
EXHIBIT 104 -- COVER PAGE INTERACTIVE DATA FILE
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES
Sempra Energy:
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 SEMPRA ENERGY,
(Registrant)
  
Date: November 5, 20213, 2022By: /s/ Peter R. Wall
 Peter R. Wall
Senior Vice President, Controller and Chief Accounting Officer (Duly Authorized Officer)

San Diego Gas & Electric Company:
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 SAN DIEGO GAS & ELECTRIC COMPANY,
(Registrant)
  
Date: November 5, 20213, 2022By: /s/ Valerie A. Bille
 Valerie A. Bille
Vice President, Controller and Chief Accounting Officer (Duly Authorized Officer)
 
Southern California Gas Company:
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 SOUTHERN CALIFORNIA GAS COMPANY,
(Registrant)
  
Date: November 5, 20213, 2022By: /s/ Mia L. DeMontigny
 Mia L. DeMontigny
Senior Vice President, Chief Financial Officer Controller and Chief Accounting Officer (Duly Authorized Officer)

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