[8-K] Sempra Reports Material Event

Rhea-AI Filing Summary

Sempra (SRE) announced a significant regulatory development in Texas through House Bill 5247, which introduces the "unified tracker mechanism" (UTM) for electric utilities. The law, effective June 20, 2025, creates an alternative method for qualifying utilities to recover transmission and distribution (T&D) capital expenditures through 2035.

Key impacts include:

• Oncor Electric Delivery Company (80.25% owned by Sempra) expects to qualify for UTM
• The mechanism is projected to improve Oncor's earnings by 50-100 basis points in annual return on equity
• Oncor plans its first UTM filing in H1 2026 to recover costs for eligible T&D investments placed into service after December 31, 2024
• The company will begin recognizing accrued revenues and regulatory assets immediately for eligible investments

Sempra affirmed that the UTM's financial impact falls within previously announced 2025 and 2026 EPS guidance ranges. This regulatory change represents a significant improvement in Oncor's ability to recover capital investments more efficiently through a comprehensive annual filing process.

Positive

• Texas House Bill 5247 establishes a new 'unified tracker mechanism' (UTM) expected to improve Oncor's earnings, cash flows, and credit metrics through 2035
• The UTM is projected to improve Oncor's earned annual returns on equity by 50-100 basis points compared to existing capital trackers
• Oncor (80.25% owned by Sempra) qualifies for the UTM, allowing faster cost recovery of T&D capital investments
• The new mechanism allows for temporary rate implementation if PUCT doesn't issue final order within 165 days, improving cash flow timing
• Sempra affirms its 2025 and 2026 EPS guidance ranges, with UTM benefits expected to fall within these ranges

Negative

• None.

Insights

Utility Regulatory Analyst

Texas law creates favorable rate recovery mechanism for Oncor, improving returns by 50-100 basis points and strengthening Sempra's financial outlook.

This filing announces a significant regulatory development for Sempra's Texas utility operations. Texas has enacted House Bill 5247, establishing a "unified tracker mechanism" (UTM) that streamlines capital recovery for qualifying electric utilities through 2035. The UTM allows utilities to defer costs from eligible transmission and distribution investments as regulatory assets and file for recovery once annually rather than through multiple separate applications.

The requirements to qualify for this mechanism appear specifically tailored to benefit Oncor (80.25% owned by Sempra), which must: operate solely within ERCOT, have responsibility for Permian Basin Reliability Plan transmission infrastructure, and make annual T&D capital expenditures exceeding 300% of annual depreciation.

The regulatory mechanics of the UTM provide significant improvements over the existing capital tracker system. The PUCT must review filings within 120 days, and utilities can implement temporary rates after 165 days if no final order is issued. Most importantly, the filing explicitly states this will improve Oncor's earnings, cash flows, and credit metrics, with an expected improvement in earned annual ROE of approximately 50-100 basis points compared to existing mechanisms.

Oncor plans to implement this immediately, recognizing accrued revenues and regulatory assets for eligible capital investments placed into service after December 31, 2024. The company expects to make its first comprehensive UTM filing in H1 2026. Management affirms this positive development falls within previously announced EPS guidance ranges for 2025-2026, suggesting the benefit was already factored into their projections.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

June 20, 2025

Date of Report (Date of earliest event reported)

Sempra

(Exact name of registrant as specified in its charter)

California

1-14201

33-0732627

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

488 8th Avenue, San Diego, California 92101						(619) 696-2000
(Address of principal executive offices) (Zip Code)						(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class			Trading Symbol			Name of Each Exchange on Which Registered
Sempra Common Stock, without par value			SRE			New York Stock Exchange
Sempra 5.75% Junior Subordinated Notes Due 2079, $25 par value			SREA			New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

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. ☐

Item 7.01 Regulation FD Disclosure.

Unified Tracker Mechanism

In Texas, interim rate adjustment applications for capital investments are known as “capital tracker” filings, which are intended to reduce regulatory lag associated with certain transmission and distribution (T&D) capital investments. Under current rules, each year electric utilities may file up to two such applications to reflect changes in transmission-related capital investments and up to two such applications to reflect changes in distribution-related capital investments. Investments included in a capital tracker filing remain subject to prudency review in the utility’s next base rate review before the Public Utility Commission of Texas (PUCT).

On June 20, 2025, Texas House Bill 5247 (HB 5247) was signed into law and became effective. The bill establishes what is known as the “unified tracker mechanism” (UTM), which creates an alternative method, available through 2035, for qualifying electric utilities to apply for interim rate adjustments once annually using a comprehensive regulatory filing for cost recovery of certain T&D capital expenditures. Qualifying electric utilities consist of utilities that (i) operate solely inside the Electric Reliability Council of Texas, Inc. (ERCOT) market, (ii) have been identified by the PUCT as having responsibility for constructing transmission infrastructure as part of ERCOT’s Permian Basin Reliability Plan, and (iii) make annual capital expenditures in T&D that exceed 300% of annual depreciation.

Oncor Electric Delivery Company LLC (Oncor) expects to qualify for and commence using the referenced alternative capital recovery method. Sempra owns an 80.25% interest in Oncor.

A qualifying utility electing to use the UTM is permitted to defer all or a portion of the costs associated with its eligible T&D capital investments placed into service during the period covered by the UTM, including depreciation expense and carrying costs, as a regulatory asset. HB 5247 provides that the PUCT must review a UTM filing within 120 days, and if a final order is not issued by the PUCT within 165 days after the UTM filing is submitted, the utility can place the requested rates into effect on a temporary basis and refund or credit against future customer bills any difference between such temporary rates and the final approved rates.

Anticipated Financial Impact

At Oncor, use of the UTM instead of existing capital trackers is expected to improve the company’s earnings, cash flows, and credit metrics. The projected positive impact of use of the UTM by Oncor will vary depending on, among other things, Oncor’s (i) amount, type and timing of T&D capital expenditures, (ii) cost of debt, (iii) capital structure, and (iv) authorized return on equity. Taking the above factors into consideration, this alternative method as compared to existing capital trackers is expected to improve earned annual returns on equity at Oncor by approximately 50 to 100 basis points, which range may vary over time.

Oncor expects to make its first comprehensive UTM filing in the first half of 2026 with a view toward recovering the costs associated with eligible T&D investments that were placed into service after December 31, 2024 and that are not currently reflected in rates. In the interim, Oncor plans to immediately begin recognizing accrued revenues and a regulatory asset for costs associated with eligible capital investments placed into service after December 31, 2024.

The impact of Oncor’s anticipated use of the UTM instead of existing capital trackers on Sempra’s diluted earnings-per-common-share (EPS) is expected to fall within its previously announced 2025 and 2026 EPS guidance ranges, as computed in accordance with generally accepted accounting principles in the United States of America and on an adjusted basis. Sempra hereby affirms the referenced EPS guidance ranges.

The information furnished in this Item 7.01 shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, nor shall it be deemed to be incorporated by reference in any filing of Sempra, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions about the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statement. These forward-looking statements represent our estimates and assumptions only as of the 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 otherwise.

In this report, forward-looking statements can be identified by words such as “believe,” “expect,” “intend,” “anticipate,” “contemplate,” “plan,” “estimate,” “project,” “forecast,” “envision,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “construct,” “develop,” “opportunity,” “preliminary,” “initiative,” “target,” “outlook,” “optimistic,” “poised,” “positioned,” “maintain,” “continue,” “progress,” “advance,” “goal,” “aim,” “commit,” or similar expressions, or when we discuss our guidance, priorities, strategies, goals, vision, mission, projections, intentions or expectations.

Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include: California wildfires, including potential liability for damages regardless of fault and any inability to recover all or a substantial portion of costs from insurance, the wildfire fund established by California Assembly Bill 1054, rates from customers or a combination thereof; decisions, denials of cost recovery, audits, investigations, inquiries, ordered studies, regulations, denials or revocations of permits, consents, approvals or other authorizations, renewals of franchises, and other actions, including the failure to honor contracts and commitments, by the (i) California Public Utilities Commission (CPUC), Comisión Nacional de Energía, U.S. Department of Energy, U.S. Federal Energy Regulatory Commission, U.S. Internal Revenue Service, Public Utility Commission of Texas and other regulatory bodies and (ii) U.S., Mexico and states, counties, cities and other jurisdictions therein and in other countries where we do business; the success of business development efforts, construction projects, acquisitions, divestitures, and other significant transactions, including risks related to (i) being able to make a final investment decision, (ii) negotiating pricing and other terms in definitive contracts, (iii) completing construction projects or other transactions on schedule and budget, (iv) realizing anticipated benefits from any of these efforts if completed, (v) obtaining regulatory and other approvals and (vi) third parties honoring their contracts and commitments; changes to our capital expenditure plans and their potential impact on rate base or other growth; changes, due to evolving economic, political and other factors, to (i) trade and other foreign policy, including the imposition of tariffs by the U.S. and foreign countries, and (ii) laws and regulations, including those related to tax and the energy industry in the U.S. and Mexico; litigation, arbitration, property disputes and other proceedings; cybersecurity threats, including by state and state-sponsored actors, of ransomware or other attacks on our systems or the systems of third parties with which we conduct business, including the energy grid or other energy infrastructure; the availability, uses, sufficiency, and cost of capital resources and our ability to borrow money or otherwise raise capital on favorable terms and meet our obligations, which can be affected by, among other things, (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook, (ii) instability in the capital markets, and (iii) fluctuating interest rates and inflation; the impact on affordability of San Diego Gas & Electric Company’s (SDG&E) and Southern California Gas Company’s (SoCalGas) customer rates and their cost of capital and on SDG&E’s, SoCalGas’ and Sempra Infrastructure’s ability to pass through higher costs to customers due to (i) volatility in inflation, interest rates and commodity prices and the imposition of tariffs, (ii) with respect to SDG&E’s and SoCalGas’ businesses, the cost of meeting the demand for lower carbon and reliable energy in California, and (iii) with respect to Sempra Infrastructure’s business, volatility in foreign currency exchange rates; the impact of climate policies, laws, rules, regulations, trends and required disclosures, including actions to reduce or eliminate reliance on natural gas, increased uncertainty in the political or regulatory environment for California natural gas distribution companies, the risk of nonrecovery for stranded assets, and uncertainty related to emerging technologies; weather, natural disasters, pandemics, accidents, equipment failures, explosions, terrorism, information system outages or other events, such as work stoppages, that disrupt our operations, damage our facilities or systems, cause the release of harmful materials or fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through regulatory mechanisms or insurance or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of electric power, natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid or pipeline and storage systems or limitations on the injection and withdrawal of natural gas from storage facilities; Oncor Electric Delivery Company LLC’s (Oncor) ability to reduce or eliminate its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor’s independent directors or a minority member director; and other uncertainties, some of which are difficult to predict and beyond our control.

These risks and uncertainties are further discussed in the reports that Sempra has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov, and on Sempra’s website, www.sempra.com. Investors should not rely unduly on any forward-looking statements.

Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or SoCalGas, and Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.

SIGNATURE

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 hereunto duly authorized.

			SEMPRA,
			(Registrant)
Date: June 23, 2025			By: /s/ Peter R. Wall
			Peter R. Wall Senior Vice President, Controller and Chief Accounting Officer

FAQ

What is the unified tracker mechanism (UTM) announced in SRE's June 2025 8-K filing?

The unified tracker mechanism (UTM) is a new alternative method for qualifying electric utilities in Texas to apply for interim rate adjustments once annually. It allows for cost recovery of certain transmission and distribution (T&D) capital expenditures through 2035. The UTM permits qualifying utilities to defer costs associated with eligible T&D investments as a regulatory asset, including depreciation expense and carrying costs.

How will the UTM impact SRE's earnings through Oncor?

According to the 8-K, the UTM is expected to improve Oncor's earnings, cash flows, and credit metrics compared to existing capital trackers. Specifically, it is projected to improve earned annual returns on equity at Oncor by approximately 50 to 100 basis points. Sempra owns an 80.25% interest in Oncor.

When will Oncor file its first UTM application under the new Texas law?

Oncor expects to make its first comprehensive UTM filing in the first half of 2026 to recover costs associated with eligible T&D investments placed into service after December 31, 2024 that are not currently reflected in rates.

What are the qualification requirements for utilities to use the UTM in Texas?

To qualify for the UTM, utilities must: 1) operate solely inside the ERCOT market, 2) be identified by PUCT as responsible for constructing transmission infrastructure as part of ERCOT's Permian Basin Reliability Plan, and 3) make annual capital expenditures in T&D that exceed 300% of annual depreciation.

Will the UTM impact SRE's previously announced earnings guidance for 2025-2026?

No, the impact of Oncor's anticipated use of the UTM is expected to fall within Sempra's previously announced 2025 and 2026 EPS guidance ranges, both on a GAAP and adjusted basis. The company has affirmed these guidance ranges.