Sempra (SRE) risk factors, 2025 10-K

Operational and Structural Risks

1. 01Sempra’s ability to pay dividends and meet its obligations largely depends on the performance of its subsidiaries and entities accounted for as equity method investments
2. 02Our investments in businesses we do not control expose us to risks
3. 03Our business could be negatively affected by activist shareholders
4. 04shareholders can be costly and time-consuming and requires time and attention by our board of directors and management, diverting their attention from our business strategies
5. 40Certain ring-fencing measures, governance mechanisms and commitments limit our ability to influence the management, operations and policies of Oncor

Financial and Capital Stock-Related Risks

1. 05Successfully completing our five-year capital expenditures plan is subject to certain risks
2. 06Settlement provisions contained in the forward sale agreements we may enter into in connection with our ATM program subject us to certain risks
3. 07The 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
4. 08The dividend requirements of our preferred stock subject us to risks

Operational Risks

1. 09Our businesses are subject to risks arising from their infrastructure and systems that support this infrastructure
2. 10We face risks related to severe weather, natural disasters, physical attacks and other similar events
3. 11We face evolving cybersecurity and technology resiliency risks associated with the energy grid, pipelines, storage and other infrastructure as well as the collection of personal, sensitive and confidential information
4. 12We actively seek opportunities in the market through acquisitions, partnerships, JVs and divestitures
5. 13We face risks related to increasing activities and projects intended to advance new energy technologies
6. 14The operation of our facilities depends on good labor relations with our employees and our ability to attract and retain qualified personnel
7. 15Our businesses depend on the performance of counterparties
8. 29More and Increasingly Severe Wildfires
9. 30Cost Recovery Through Insurance or Rates
10. 31Wildfire Mitigation Efforts
11. 32The electricity industry is undergoing significant change, including increased deployment of renewable energy sources and energy storage, technological advancements, evolving procurement service standards, and political and regulatory developments
12. 33Natural gas continues to be the subject of political and public debate, including a desire by some to reduce or eliminate reliance on natural gas as an energy source
13. 34SDG&E may incur significant costs and liabilities from its partial ownership of a nuclear facility being decommissioned
14. 44Energy Infrastructure Projects
15. 45We face risks from increased competition
16. 46We may not be able to secure, maintain, extend or replace long-term supply, sales or capacity agreements
17. 47We rely on transportation assets and services, much of which we do not own or control, to deliver natural gas and electricity

Financial Risks

1. 16Our debt service obligations expose us to risks and could require additional equity securities issuances by Sempra or sales of equity interests in subsidiaries or projects under development
2. 17The availability and cost of debt or equity financing could be negatively affected by market and economic conditions and other factors
3. 18Credit rating agencies may downgrade our credit ratings or place them on negative outlook
4. 19We do not fully hedge our assets or contract positions against changes in commodity prices or interest rates, and for positions that are hedged, our hedging mechanisms may not mitigate our risk or reduce our losses as intended
5. 20Risk management procedures may not prevent or mitigate losses
6. 21An impairment of our goodwill or long-lived assets could result in a material charge to earnings
7. 22Market performance or changes in other assumptions could require unplanned contributions to pension and PBOP plans
8. 42Oncor could have liquidity needs that necessitate additional investments
9. 43Sempra could incur substantial tax liabilities if EFH’s 2016 spin-off of Vistra is deemed to be taxable
10. 48Sempra Infrastructure’s business is capital-intensive and relies on various types of financing arrangements, which may not be adequate or available in the future
11. 49Fixed-price long-term contracts for services or commodities expose our businesses to inflationary pressures
12. 50Our international businesses and operations expose us to foreign currency exchange rate and inflation risks
13. 51Our businesses are exposed to fluctuations in commodity prices

Legal and Regulatory Risks

1. 23We face risks related to failures and delays in obtaining and maintaining permits, licenses, franchises and other approvals required by our businesses
2. 24We face risks related to environmental and climate change regulation and the costs of the energy transition
3. 25Environmental and Climate Change Regulation
4. 35Rates and Other Financial Matters
5. 36CPUC Authority Over Operational Matters
6. 37Regulatory Changes and Influence of Other Organizations
7. 38From October 23, 2015 through February 11, 2016, SoCalGas experienced the Leak, which we describe in Note 15 of the Notes to Consolidated Financial Statements
8. 39Failure by the CPUC to adequately reform SDG&E’s electric rate structure could negatively impact SDG&E and Sempra
9. 52Our international businesses and operations expose us to increased legal, regulatory, tax, economic, geopolitical, credit and management oversight risks and challenges
10. 53The Mexican government exercises significant and increasing influence over the Mexican energy sector and has adopted or proposed additional changes that, in each case, could impact private investment in this sector
11. 54U.S. and Foreign Laws and International Relations
12. 55We face risks related to unsettled property rights and titles in Mexico

Other Energy Transition Risks

1. 26we further modify our GHG emissions reduction aims or there are negative views about our environmental disclosures or practices generally
2. 27We are subject to complex tax and accounting requirements that expose us to risks
3. 28We may be negatively impacted by the outcome of litigation or other proceedings in which we are involved

Industry-Related Risks

1. 41Changes in the regulation of Oncor or the regulation or operation of the electric utility industry and/or the ERCOT market could negatively affect Oncor