REGULATORY MATTERS (Tables)

12 Months Ended

Dec. 31, 2021

We show the details of regulatory assets and liabilities in the following table and discuss them 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 generally 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.


REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	December 31,
	2021		2020		2019
SDG&E:
Fixed-price contracts and other derivatives	$	(50)	$	(53)	$	8
Deferred income taxes recoverable (refundable) in rates	125		22		(108)
Pension and other postretirement benefit plan obligations	(7)		50		103
Removal obligations	(2,251)		(2,121)		(2,056)
Environmental costs	62		56		45
Sunrise Powerlink fire mitigation	122		121		121
Regulatory balancing accounts(1)(2)
Commodity – electric	77		72		102
Gas transportation	49		35		22
Safety and reliability	67		67		77
Public purpose programs	(107)		(158)		(124)
2019 GRC retroactive impacts	—		56		111
Wildfire mitigation plan	178		93		12
Liability insurance premium	110		79		24
Other balancing accounts	207		61		70
Other regulatory assets (liabilities), net(2)	119		72		(153)
Total SDG&E	(1,299)		(1,548)		(1,746)
SoCalGas:
Deferred income taxes recoverable (refundable) in rates	44		(82)		(203)
Pension and other postretirement benefit plan obligations	51		417		400
Employee benefit costs	31		37		44
Removal obligations	(627)		(685)		(728)
Environmental costs	34		36		40
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportation	(146)		(56)		(118)
Safety and reliability	339		335		295
Public purpose programs	(183)		(253)		(273)
2019 GRC retroactive impacts	—		202		400
Liability insurance premium	16		7		4
Other balancing accounts	42		(65)		(11)
Other regulatory assets (liabilities), net(2)	142		75		(101)
Total SoCalGas	(257)		(32)		(251)
Sempra Infrastructure:
Deferred income taxes recoverable in rates	77		80		83
Other regulatory assets	—		—		6
Total Sempra	$	(1,479)	$	(1,500)	$	(1,908)

(1) At December 31, 2021, 2020 and 2019, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $358, $139 and $108, respectively, and for SoCalGas was $410, $218 and $500, respectively.

(2) Includes regulatory assets earning a return authorized by applicable regulators, which generally approximates the three-month commercial paper rate.

Schedule of Regulatory Liabilities


REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	December 31,
	2021		2020		2019
SDG&E:
Fixed-price contracts and other derivatives	$	(50)	$	(53)	$	8
Deferred income taxes recoverable (refundable) in rates	125		22		(108)
Pension and other postretirement benefit plan obligations	(7)		50		103
Removal obligations	(2,251)		(2,121)		(2,056)
Environmental costs	62		56		45
Sunrise Powerlink fire mitigation	122		121		121
Regulatory balancing accounts(1)(2)
Commodity – electric	77		72		102
Gas transportation	49		35		22
Safety and reliability	67		67		77
Public purpose programs	(107)		(158)		(124)
2019 GRC retroactive impacts	—		56		111
Wildfire mitigation plan	178		93		12
Liability insurance premium	110		79		24
Other balancing accounts	207		61		70
Other regulatory assets (liabilities), net(2)	119		72		(153)
Total SDG&E	(1,299)		(1,548)		(1,746)
SoCalGas:
Deferred income taxes recoverable (refundable) in rates	44		(82)		(203)
Pension and other postretirement benefit plan obligations	51		417		400
Employee benefit costs	31		37		44
Removal obligations	(627)		(685)		(728)
Environmental costs	34		36		40
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportation	(146)		(56)		(118)
Safety and reliability	339		335		295
Public purpose programs	(183)		(253)		(273)
2019 GRC retroactive impacts	—		202		400
Liability insurance premium	16		7		4
Other balancing accounts	42		(65)		(11)
Other regulatory assets (liabilities), net(2)	142		75		(101)
Total SoCalGas	(257)		(32)		(251)
Sempra Infrastructure:
Deferred income taxes recoverable in rates	77		80		83
Other regulatory assets	—		—		6
Total Sempra	$	(1,479)	$	(1,500)	$	(1,908)

(2) Includes regulatory assets earning a return authorized by applicable regulators, which generally approximates the three-month commercial paper rate.

Proposed Revenue Requirement

The following table summarizes the location of balances related to the Wildfire Fund on Sempra’s and SDG&E’s Consolidated Balance Sheets and Consolidated Statements of Operations.


WILDFIRE FUND
(Dollars in millions)
		December 31,
	Location	2021		2020		2019
Wildfire Fund asset:
Current	Prepaid Expenses	$	29	$	29	$	29
Noncurrent	Wildfire Fund	331		363		392
Wildfire Fund obligation:
Current	Other Current Liabilities	$	13	$	13	$	13
Noncurrent	Deferred Credits and Other	64		75		86
		Years ended December 31,
		2021		2020		2019
Amortization of Wildfire Fund asset	Operation and Maintenance	$	29	$	29	$	12
Impairment of Wildfire Fund asset	Impairment Losses(1)	3		—		—
Accretion of Wildfire Fund obligation	Operation and Maintenance	2		2		1

(1) Included in O&M for SDG&E.

The increases include separately authorized components for O&M and capital-related costs, as follows:


AUTHORIZED REVENUE REQUIREMENT INCREASES FOR 2020 AND 2021
(Dollars in millions)
	2020 increase from 2019				2021 increase from 2020
	Revenue increase		Percent increase		Revenue increase		Percent increase
SDG&E:
O&M	$	20	2.64	%	$	19	2.47	%
Capital-related costs	114		9.74		83		6.47
Total increase	$	134	6.74		$	102	4.83
SoCalGas:
O&M	$	36	2.64	%	$	34	2.40	%
Capital-related costs	184		14.36		116		7.93
Total increase	$	220	7.92		$	150	5.00

In December 2019, the CPUC approved the cost of capital and rate structures (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.


CPUC AUTHORIZED COST OF CAPITAL AND RATE STRUCTURE, SUBJECT TO THE CCM

SDG&E							SoCalGas
Authorized weighting		Return on rate base		Weighted return on rate base			Authorized weighting		Return on rate base		Weighted return on rate base
45.25	%	4.59	%	2.08	%	Long-Term Debt	45.60	%	4.23	%	1.93	%
2.75		6.22		0.17		Preferred Equity	2.40		6.00		0.14
52.00		10.20		5.30		Common Equity	52.00		10.05		5.23
100.00	%			7.55	%		100.00	%			7.30	%