Sempra, SDG&E, and SoCalGas face risks from wildfires (liability, insurance recovery issues), regulatory decisions (permits, rate approvals, cost recovery), macroeconomic factors (capital availability, interest rates, inflation), litigation (asbestos claims, lawsuits related to the Aliso Canyon leak, franchise agreements), and energy market volatility (commodity prices, power availability). Specific risks include potential impairment of assets (e.g., natural gas storage facilities), and disruptions to operations in Mexico due to legal challenges. Uncertainties in the Mexican government's actions and reforms also pose risks.
Financial Upside
Potential increases in earnings from higher authorized cost of capital, incremental and balanced capital projects, customer growth, and rate updates. Favorable foreign currency and inflation effects on monetary positions in Mexico, and higher income tax benefits from flow-through items and resolution of prior-year items are also potential upsides. New projects (LNG, pipelines, renewables) offer potential future revenue streams, though subject to numerous risks.
