Cover and table of contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-K

(Mark One)
☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the fiscal year ended																		December 31, 2020
			or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from																					to

Commission File No.			Exact Name of Registrants as Specified in their Charters, Address and Telephone Number												State of Incorporation			I.R.S. Employer Identification Nos.
1-14201			SEMPRA ENERGY												California			33-0732627
			488 8th Avenue
			San Diego, California 92101
			(619) 696-2000
1-03779			SAN DIEGO GAS & ELECTRIC COMPANY												California			95-1184800
			8326 Century Park Court
			San Diego, California 92123
			(619) 696-2000
1-01402			SOUTHERN CALIFORNIA GAS COMPANY												California			95-1240705
			555 West Fifth Street
			Los Angeles, California 90013
			(213) 244-1200

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class			Trading Symbol			Name of Each Exchange on Which Registered
SEMPRA ENERGY:
Common Stock, without par value			SRE			New York Stock Exchange
6.75% Mandatory Convertible Preferred Stock, Series B, $100 liquidation preference			SREPRB			New York Stock Exchange
5.75% Junior Subordinated Notes Due 2079, $25 par value			SREA			New York Stock Exchange
SAN DIEGO GAS & ELECTRIC COMPANY:
None
SOUTHERN CALIFORNIA GAS COMPANY:
None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Title of Each Class
SEMPRA ENERGY:
None
SAN DIEGO GAS & ELECTRIC COMPANY:
None
SOUTHERN CALIFORNIA GAS COMPANY:
6% Preferred Stock, $25 par value
6% Preferred Stock, Series A, $25 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Sempra Energy												Yes ☒			No ☐
San Diego Gas & Electric Company												Yes ☐			No ☒
Southern California Gas Company												Yes ☐			No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Sempra Energy												Yes ☐			No ☒
San Diego Gas & Electric Company												Yes ☐			No ☒
Southern California Gas Company												Yes ☐			No ☒
Indicate by check mark whether the registrants (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
												Yes ☒			No ☐
Indicate by check mark whether the registrants have 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 registrants were required to submit such files).
												Yes ☒			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 Company:
☐ 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 Energy						☐
San Diego Gas & Electric Company						☐
Southern California Gas Company						☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report.
Sempra Energy						☒
San Diego Gas & Electric Company						☒
Southern California Gas Company						☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Sempra Energy			Yes ☐			No ☒
San Diego Gas & Electric Company			Yes ☐			No ☒
Southern California Gas Company			Yes ☐			No ☒

Aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2020:
Sempra Energy			$34.3 billion (based on the price at which the common equity was last sold as of the last business day of the most recently completed second fiscal quarter)
San Diego Gas & Electric Company			$0
Southern California Gas Company			$0

Common Stock outstanding, without par value, as of February 22, 2021:

Sempra Energy			302,591,374 shares
San Diego Gas & Electric Company			Wholly owned by Enova Corporation, which is wholly owned by Sempra Energy
Southern California Gas Company			Wholly owned by Pacific Enterprises, which is wholly owned by Sempra Energy
SAN DIEGO GAS & ELECTRIC COMPANY MEETS THE CONDITIONS OF GENERAL INSTRUCTIONS I(1)(a) AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS REPORT WITH A REDUCED DISCLOSURE FORMAT AS PERMITTED BY GENERAL INSTRUCTION I(2).

DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Sempra Energy proxy statement to be filed for its May 2021 annual meeting of shareholders are incorporated by reference into Part III of this annual report on Form 10-K.
Portions of the Southern California Gas Company information statement to be filed for its June 2021 annual meeting of shareholders are incorporated by reference into Part III of this annual report on Form 10-K.

SEMPRA ENERGY FORM 10-K
SAN DIEGO GAS & ELECTRIC COMPANY FORM 10-K
SOUTHERN CALIFORNIA GAS COMPANY FORM 10-K
TABLE OF CONTENTS
						Page
Glossary						5
Information Regarding Forward-Looking Statements						9
Summary of Risk Factors						10
PART I
Item 1.			Business			12
Item 1A.			Risk Factors			34
Item 1B.			Unresolved Staff Comments			64
Item 2.			Properties			64
Item 3.			Legal Proceedings			64
Item 4.			Mine Safety Disclosures			64
PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			65
Item 6.			Selected Financial Data			65
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			69
			Overview			69
			Results of Operations			69
			Capital Resources and Liquidity			84
			Critical Accounting Policies and Estimates			106
Item 7A.			Quantitative and Qualitative Disclosures About Market Risk			110
Item 8.			Financial Statements and Supplementary Data			113
Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			113
Item 9A.			Controls and Procedures			113
Item 9B.			Other Information			118
PART III
Item 10.			Directors, Executive Officers and Corporate Governance			118
Item 11.			Executive Compensation			118
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			118
Item 13.			Certain Relationships and Related Transactions, and Director Independence			119
Item 14.			Principal Accountant Fees and Services			120
PART IV
Item 15.			Exhibits and Financial Statement Schedules			121
Item 16.			Form 10-K Summary			133
Signatures						134
Index to Consolidated Financial Statements						F-1
Index to Condensed Financial Information of Parent						S-1

This combined Form 10-K is separately filed by Sempra Energy, 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 entity makes statements herein only as to itself and its consolidated subsidiaries and makes no statement whatsoever as to any other 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. Separate Part II – Items 6 and 8 are provided for each reporting entity, except for the Notes to Consolidated Financial Statements in Part II – Item 8. The Notes to Consolidated Financial Statements for all of the reporting entities are combined. All Items other than Part II – Items 6 and 8 are combined for the three reporting entities.

The following terms and abbreviations appearing in this report have the meanings indicated below.

GLOSSARY
2016 GRC FD			final decision in the California Utilities’ 2016 General Rate Case
2019 GRC FD			final decision in the California Utilities’ 2019 General Rate Case
AB			California Assembly Bill
AFUDC			allowance for funds used during construction
AMP			Arrearage Management Payment Plan
AOCI			accumulated other comprehensive income (loss)
ARO			asset retirement obligation
ASC			Accounting Standards Codification
ASR			accelerated share repurchase
ASU			Accounting Standards Update
Bay Gas			Bay Gas Storage Company, Ltd.
Bcf			billion cubic feet
Bechtel			Bechtel Oil, Gas and Chemicals, Inc.
Blade			Blade Energy Partners
bps			basis points
Cal PA			California Public Advocates Office
CalGEM			California Geologic Energy Management Division (formerly known as Division of Oil, Gas, and Geothermal Resources or DOGGR)
California Utilities			San Diego Gas & Electric Company and Southern California Gas Company, collectively
Cameron LNG JV			Cameron LNG Holdings, LLC
CARB			California Air Resources Board
CCA			Community Choice Aggregation
CCC			California Coastal Commission
CCM			cost of capital adjustment mechanism
CEC			California Energy Commission
CENACE			Centro Nacional de Control de Energía (Mexico’s National Center for Energy Control)
CENAGAS			Centro Nacional de Control de Gas
CFE			Comisión Federal de Electricidad (Mexico’s Federal Electricity Commission)
CFIN			Cameron LNG FINCO, LLC, a wholly owned and unconsolidated affiliate of Cameron LNG JV
Chilquinta Energía			Chilquinta Energía, S.A. and its subsidiaries
CNBV			Comisión Nacional Bancaria y de Valores (Mexico’s National Banking and Securities Commission)
COFECE			Comisión Federal de Competencia Económica (Mexico’s Competition Commission)
COVID-19			coronavirus disease 2019
CPUC			California Public Utilities Commission
CRE			Comisión Reguladora de Energía (Mexico’s Energy Regulatory Commission)
CRR			congestion revenue right
DA			Direct Access
DEN			Ductos y Energéticos del Norte, S. de R.L. de C.V.
DOE			U.S. Department of Energy
DOT			U.S. Department of Transportation
DWR			California Department of Water Resources
ECA LNG			ECA LNG Phase 1 and ECA LNG Phase 2, collectively
ECA LNG Phase 1			ECA LNG Holdings B.V.
ECA LNG Phase 2			ECA LNG II Holdings B.V.
ECA Regas Facility			Energía Costa Azul, S. de R.L. de C.V. LNG regasification facility
Ecogas			Ecogas México, S. de R.L. de C.V.
Edison			Southern California Edison Company, a subsidiary of Edison International
EFH			Energy Future Holdings Corp. (renamed Sempra Texas Holdings Corp.)
Eletrans			Eletrans S.A., Eletrans II S.A. and Eletrans III S.A., collectively
EMA			energy management agreement
Enova			Enova Corporation
EPA			U.S. Environmental Protection Agency
EPC			engineering, procurement and construction
EPS			earnings per common share

GLOSSARY (CONTINUED)
ERCOT			Electric Reliability Council of Texas, Inc., the independent system operator and the regional coordinator of various electricity systems within Texas
ERR			eligible renewable energy resource
ESJ			Energía Sierra Juárez, S. de R.L. de C.V.
ETR			effective income tax rate
Exchange Act			Securities Exchange Act of 1934, as amended
FERC			Federal Energy Regulatory Commission
Fitch			Fitch Ratings
FTA			Free Trade Agreement
Gazprom			Gazprom Marketing & Trading Mexico S. de R.L. de C.V.
GCIM			Gas Cost Incentive Mechanism
GHG			greenhouse gas
GRC			General Rate Case
HMRC			United Kingdom’s Revenue and Customs Department
IEnova			Infraestructura Energética Nova, S.A.B. de C.V.
IEnova Pipelines			IEnova Pipelines, S. de R.L. de C.V.
IMG JV			Infraestructura Marina del Golfo
InfraREIT			InfraREIT, Inc.
IOU			investor-owned utility
IRC			U.S. Internal Revenue Code of 1986 (as amended)
IRS			Internal Revenue Service
ISFSI			independent spent fuel storage installation
ISO			Independent System Operator
JV			joint venture
kV			kilovolt
kW			kilowatt
kWh			kilowatt hour
LA Storage			LA Storage, LLC
LA Superior Court			Los Angeles County Superior Court
Leak			the leak at the SoCalGas Aliso Canyon natural gas storage facility injection-and-withdrawal well, SS25, discovered by SoCalGas on October 23, 2015
LIBOR			London Interbank Offered Rate
LNG			liquefied natural gas
LPG			liquid petroleum gas
LTIP			long-term incentive plan
Luz del Sur			Luz del Sur S.A.A. and its subsidiaries
MD&A			Management’s Discussion and Analysis of Financial Condition and Results of Operations
Mexican Stock Exchange			Bolsa Mexicana de Valores, S.A.B. de C.V., or BMV
Mississippi Hub			Mississippi Hub, LLC
MMBtu			million British thermal units (of natural gas)
MMcf			million cubic feet
Moody’s			Moody’s Investors Service, Inc.
MOU			Memorandum of Understanding
Mtpa			million tonnes per annum
MW			megawatt
MWh			megawatt hour
NAV			net asset value
NCI			noncontrolling interest(s)
NDT			nuclear decommissioning trusts
NEIL			Nuclear Electric Insurance Limited
NEM			net energy metering
NOL			net operating loss
NRC			Nuclear Regulatory Commission
NYSE			New York Stock Exchange

GLOSSARY (CONTINUED)
O&M			operation and maintenance expense
OCI			other comprehensive income (loss)
OII			Order Instituting Investigation
OIR			Order Instituting a Rulemaking
OMEC			Otay Mesa Energy Center
OMEC LLC			Otay Mesa Energy Center LLC
Oncor			Oncor Electric Delivery Company LLC
Oncor Holdings			Oncor Electric Delivery Holdings Company LLC
OSC			Order to Show Cause
Otay Mesa VIE			OMEC LLC VIE
PBOP			postretirement benefits other than pension
PE			Pacific Enterprises
PEMEX			Petróleos Mexicanos (Mexican state-owned oil company)
PG&E			Pacific Gas and Electric Company
PHMSA			Pipeline and Hazardous Materials Safety Administration
PP&E			property, plant and equipment
PPA			power purchase agreement
PRP			Potentially Responsible Party
PSEP			Pipeline Safety Enhancement Plan
PUCT			Public Utility Commission of Texas
PURA			Public Utility Regulatory Act
RBS			The Royal Bank of Scotland plc
RBS SEE			RBS Sempra Energy Europe
RBS Sempra Commodities			RBS Sempra Commodities LLP
REC			renewable energy certificate
ROE			return on equity
ROU			right-of-use
RPS			Renewables Portfolio Standard
RSU			restricted stock unit
S&P			Standard & Poor’s
Saavi Energía			Saavi Energía S. de R.L. de C.V.
SB			California Senate Bill
SCAQMD			South Coast Air Quality Management District
SDG&E			San Diego Gas & Electric Company
SDTS			Sharyland Distribution & Transmission Services, L.L.C. (a subsidiary of InfraREIT)
SEC			U.S. Securities and Exchange Commission
SED			Safety and Enforcement Division of the CPUC
SEDATU			Secretaría de Desarrollo Agrario, Territorial y Urbano (Mexican agency in charge of agriculture, land and urban development)
Sempra Global			holding company for most of Sempra Energy’s subsidiaries not subject to California or Texas utility regulation
SENER			Secretaría de Energía de México (Mexico’s Ministry of Energy)
series A preferred stock			6% mandatory convertible preferred stock, series A
series B preferred stock			6.75% mandatory convertible preferred stock, series B
series C preferred stock			Sempra Energy’s 4.875% fixed-rate reset cumulative redeemable perpetual preferred stock, series C
Sharyland Holdings			Sharyland Holdings, L.P.
Sharyland Utilities			Sharyland Utilities, L.L.C.
Shell Mexico			Shell México Gas Natural, S. de R.L. de C.V.
SoCalGas			Southern California Gas Company
SONGS			San Onofre Nuclear Generating Station
SONGS OII			CPUC’s Order Instituting Investigation into the SONGS Outage
STIH			Sempra Texas Intermediate Holding Company LLC
Support Agreement			support agreement, dated July 28, 2020, between Sempra Energy and Sumitomo Mitsui Banking Corporation
TAG JV			TAG Norte Holding, S. de R.L. de C.V.
Tangguh PSC			Tangguh PSC Contractors
TC Energy			TC Energy Corporation (formerly known as TransCanada Corporation)

GLOSSARY (CONTINUED)
TCJA			Tax Cuts and Jobs Act of 2017
TdM			Termoeléctrica de Mexicali
TechnipFMC			TP Oil & Gas Mexico, S. De R.L. De C.V., an affiliate of TechnipFMC plc
Tecnored			Tecnored S.A.
Tecsur			Tecsur S.A.
TO4			Electric Transmission Owner Formula Rate, effective through December 31, 2018
TO5			Electric Transmission Owner Formula Rate, new application
TTHC			Texas Transmission Holdings Corporation
TTI			Texas Transmission Investment LLC
TURN			The Utility Reform Network
U.S. GAAP			accounting principles generally accepted in the United States of America
USMCA			United States-Mexico-Canada Agreement
VaR			value at risk
VAT			value-added tax
Ventika			Ventika, S.A.P.I. de C.V. and Ventika II, S.A.P.I. de C.V., collectively
VIE			variable interest entity
Wildfire Fund			the fund established pursuant to AB 1054
Wildfire Legislation			AB 1054 and AB 111

References in this report to “we,” “our,” “us,” “our company” and “Sempra Energy Consolidated” are to Sempra Energy and its consolidated entities, collectively, unless otherwise 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 Consolidated Financial Statements and Notes to Consolidated Financial Statements when discussed together or collectively:

▪the Consolidated Financial Statements and related Notes of Sempra Energy and its subsidiaries and VIEs;

▪the Consolidated Financial Statements and related Notes of SDG&E and its VIE (until deconsolidation of the VIE in August 2019); and

▪the Financial Statements and related Notes of SoCalGas.

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 in any forward-looking statements. 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,” “anticipates,” “plans,” “estimates,” “projects,” “forecasts,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “under construction,” “in development,” “target,” “outlook,” “maintain,” “continue,” 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 described in any forward-looking statements 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 costs from insurance, the Wildfire Fund or in rates from customers

▪decisions, investigations, regulations, issuances or revocations of permits and other authorizations, renewals of franchises, and other actions by (i) the CFE, CPUC, DOE, PUCT, and other regulatory and governmental bodies and (ii) states, counties, cities and other jurisdictions in the U.S., Mexico and other countries in which we do business

▪the success of business development efforts, construction projects and major acquisitions and divestitures, including risks in (i) the ability to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) the ability to realize anticipated benefits from any of these efforts if completed, and (iv) obtaining the consent of partners or other third parties

▪the resolution of civil and criminal litigation, regulatory inquiries, investigations and proceedings, and arbitrations, including, among others, those related to the Leak

▪the impact of the COVID-19 pandemic on our capital projects, regulatory approval processes, supply chain, liquidity and execution of operations

▪actions by credit rating agencies to downgrade our credit ratings or to place those ratings on negative outlook and our ability to borrow on favorable terms and meet our substantial debt service obligations

▪moves to reduce or eliminate reliance on natural gas and the impact of volatility of oil prices on our businesses and development projects

▪weather, natural disasters, pandemics, accidents, equipment failures, explosions, acts of terrorism, computer system outages and other events that disrupt our operations, damage our facilities and systems, cause the release of harmful materials, cause fires and subject us to liability for property damage or personal injuries, fines and penalties, some of which may not be covered by insurance (including costs in excess of applicable policy limits), may be disputed by insurers or may otherwise not be recoverable through regulatory mechanisms or may impact our ability to obtain satisfactory levels of affordable insurance

▪the availability of electric power and natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, limitations on the withdrawal of natural gas from storage facilities, and equipment failures

▪cybersecurity threats to the energy grid, storage and pipeline infrastructure, the information and systems used to operate our businesses, and the confidentiality of our proprietary information and the personal information of our customers and employees

▪expropriation of assets, failure of foreign governments and state-owned entities to honor their contracts, and property disputes

▪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 DA and CCA, and the risk of nonrecovery for stranded assets and contractual obligations

▪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 and interest rates and commodity prices and our ability to effectively hedge these risks

▪changes in tax and trade policies, laws and regulations, including tariffs and revisions to international trade agreements that may increase our costs, reduce our competitiveness, or impair our ability to resolve trade disputes

▪other uncertainties, some of which may be difficult to predict and are beyond our control

We caution you not to rely unduly on any forward-looking statements. You should review and consider carefully the risks, uncertainties and other factors that affect our business as described herein and in other reports that we file with the SEC.

SUMMARY OF RISK FACTORS

There are a number of risks that you should understand before making an investment decision in our securities or the securities of our subsidiaries. This summary is not intended to be complete and should only be read together with the information set forth in “Risk Factors” in this report. If any of these risks occur, Sempra Energy’s and its subsidiaries’ businesses, cash flows, financial condition, results of operations and/or prospects could be materially and adversely affected, and the trading prices of Sempra Energy’s securities and those of its subsidiaries could substantially decline. These risks include, among others, the following:

Risks Related to Sempra Energy

▪Sempra Energy’s cash flows, ability to pay dividends and ability to meet its debt obligations largely depend on the performance of its subsidiaries and entities that are accounted for as equity method investments, such as Oncor Holdings and Cameron LNG JV.

▪The economic interest, voting rights and market value of our outstanding common and preferred stock may be adversely affected by any additional equity securities we may issue and, with respect to our common stock, by our outstanding preferred stock.

Risks Related to All Sempra Energy Businesses

▪Severe weather conditions, natural disasters, pandemics, accidents, equipment failures, explosions or acts of terrorism could materially adversely affect us.

▪The substantial debt service obligations of Sempra Energy, SDG&E and SoCalGas could have a material adverse effect on us, and with respect to Sempra Energy, could require additional equity securities issuances.

▪The availability and cost of debt or equity financing could be adversely affected by conditions in the financial markets and economic conditions generally, as well as other factors, and any such negative effects could materially adversely affect us.

▪Certain credit rating agencies may downgrade our credit ratings or place those ratings on negative outlook.

▪Our businesses are subject to complex governmental regulations and tax and accounting requirements and may be materially adversely affected by these regulations or requirements or any changes to them.

▪Our businesses require numerous permits, licenses, franchises, and other approvals and agreements from various federal, state, local and foreign governmental agencies, and the failure to obtain or maintain any of them could materially adversely affect us.

Risks Related to the California Utilities

▪Wildfires in California pose a significant risk to the California Utilities (particularly SDG&E) and Sempra Energy.

▪The electricity industry is undergoing significant change, including increased deployment of distributed energy resources, technological advancements, and political and regulatory developments.

▪Natural gas and natural gas storage have increasingly been the subject of political and public scrutiny, including a desire by some to substantially reduce or eliminate reliance on natural gas as an energy source.

▪The California Utilities are subject to extensive regulation by state, federal and local legislative and regulatory authorities, which may materially adversely affect us.

▪SoCalGas has incurred and may continue to incur significant costs, expenses and other liabilities related to the Leak, a substantial portion of which may not be recoverable through insurance.

Risks Related to Our Interest in Oncor

▪Certain ring-fencing measures, governance mechanisms and commitments limit our ability to influence the management and policies of Oncor.

▪Changes in the electric utility industry, including changes in regulation of ERCOT, could materially adversely affect Oncor, which could materially adversely affect us.

Risks Related to Our Businesses Other Than the California Utilities and Our Interest in Oncor

▪Project development activities may not be successful and projects under construction may not commence operation as scheduled, be completed within budget or operate at expected levels, which could have a material adverse effect on us.

▪Our businesses depend on the performance of counterparties, including with respect to long-term supply, sales and capacity agreements, and any failure by these parties to perform could result in substantial expenses and business disruptions and exposure to commodity price risk and volatility, any of which could materially adversely affect us.

▪Our international businesses and operations expose us to legal, tax, economic, geopolitical, management oversight, foreign currency and inflation risks and challenges.

Risks Related to Our Proposed IEnova Exchange Offer and Our Proposed Transaction Related to Sempra Infrastructure Partners

▪Our ability to complete our proposed IEnova exchange offer is subject to various conditions and other risks and uncertainties that could cause the transaction to be abandoned, delayed or restructured, which could materially adversely affect us.

▪We expect to issue shares of our common stock in the proposed exchange offer, which would dilute the voting interests and could dilute the economic interests of our current shareholders and may adversely affect the market value of our common stock and preferred stock.

▪The proposed exchange offer, if completed, would subject us to additional regulation and liability in Mexico.

▪Our proposed transaction related to Sempra Infrastructure Partners is subject to a number of risks and uncertainties.

PART I.