v3.25.2
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
We discuss the valuation techniques and inputs we use to measure fair value and the definition of the three levels of the fair value hierarchy in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.
RECURRING FAIR VALUE MEASURES
The tables below set forth our financial assets and liabilities, by level within the fair value hierarchy, that were accounted for at fair value on a recurring basis at June 30, 2025 and December 31, 2024. We classify financial assets and liabilities in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair-valued assets and liabilities and their placement within the fair value hierarchy. We have not changed the valuation techniques or types of inputs we use to measure recurring fair value since December 31, 2024.
The determination of fair values, shown in the tables below, incorporates various factors, including but not limited to, the credit standing of the counterparties involved and the impact of credit enhancements (such as cash deposits, letters of credit and priority interests).
Our financial assets and liabilities that were accounted for at fair value on a recurring basis in the tables below include the following:
▪Nuclear decommissioning trusts reflect the assets of SDG&E’s NDT, excluding accounts receivable and accounts payable. A third-party trustee values the trust assets using prices from a pricing service based on a market approach. We validate these prices by comparison to prices from other independent data sources. Securities are valued using quoted prices listed on nationally recognized securities exchanges or based on closing prices reported in the active market in which the identical security is traded (Level 1). Other securities are valued based on yields that are currently available for comparable securities of issuers with similar credit ratings (Level 2).
▪For commodity contracts, interest rate instruments and foreign exchange instruments, we primarily use a market or income approach with market participant assumptions to value these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable. We have exchange-traded derivatives that are valued based on quoted prices in active markets for the identical instruments (Level 1). We also may have other commodity derivatives that are valued using industry standard models that consider quoted forward prices for commodities, time value, current market and contractual prices for the underlying instruments, volatility factors, and other relevant economic measures (Level 2). Level 3 recurring items relate to CRRs at SDG&E, as we discuss below in “Level 3 Information – SDG&E.” We further discuss derivative assets and liabilities in Note 8.
▪Rabbi Trust investments include short-term investments that consist of money market and mutual funds that we value using a market approach based on closing prices reported in the active market in which the identical security is traded (Level 1).
▪As we discuss in Note 12, in July 2020, Sempra entered into a Support Agreement for the benefit of CFIN. We measure the Support Agreement, which includes a guarantee obligation, a put option and a call option, net of related guarantee fees, at fair value on a recurring basis. We use a discounted cash flow model to value the Support Agreement, net of related guarantee fees. Because some of the inputs that are significant to the valuation are less observable, the Support Agreement is classified as Level 3, as we describe below in “Level 3 Information – Other Sempra.”
RECURRING FAIR VALUE MEASURES
(Dollars in millions)
Level 1Level 2Level 3
Netting(1)
Total
Fair value at June 30, 2025
Sempra:
Assets:    
Nuclear decommissioning trusts:    
Short-term investments, primarily cash equivalents
$14 $2 $— $16 
Equity securities282 3 — 285 
Debt securities:    
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies
31 18 — 49 
Municipal bonds— 294 — 294 
Other securities— 246 — 246 
Total debt securities31 558 — 589 
Total nuclear decommissioning trusts(2)
327 563 — 890 
Short-term investments held in Rabbi Trust49 — — 49 
Support Agreement, net of related guarantee fees— — 39 39 
Interest rate instruments— 224 — $— 224 
Commodity contracts not subject to rate recovery— 33 — 52 85 
Commodity contracts subject to rate recovery9 20 3 10 42 
Total$385 $840 $42 $62 $1,329 
Liabilities:    
Foreign exchange instruments$— $7 $— $— $7 
Commodity contracts not subject to rate recovery— 73 — (28)45 
Commodity contracts subject to rate recovery13 52 — (32)33 
Total$13 $132 $— $(60)$85 
Fair value at December 31, 2024
Sempra:
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents$8 $2 $— $10 
Equity securities295 3 — 298 
Debt securities:
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies
41 26 — 67 
Municipal bonds— 287 — 287 
Other securities— 228 — 228 
Total debt securities41 541 — 582 
Total nuclear decommissioning trusts(2)
344 546 — 890 
Short-term investments held in Rabbi Trust64 — — 64 
Support Agreement, net of related guarantee fees— — 25 25 
Interest rate instruments— 293 — $— 293 
Foreign exchange instruments— 5 — — 5 
Commodity contracts not subject to rate recovery— 39 — 2 41 
Commodity contracts subject to rate recovery6 1 4 18 29 
Total$414 $884 $29 $20 $1,347 
Liabilities:
Commodity contracts not subject to rate recovery$1 $63 $— $(38)$26 
Commodity contracts subject to rate recovery20 45 — (21)44 
Total$21 $108 $— $(59)$70 
(1)    Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
(2)    Excludes receivables (payables), net.
RECURRING FAIR VALUE MEASURES
(Dollars in millions)
Level 1Level 2Level 3
Netting(1)
Total
Fair value at June 30, 2025
SDG&E:
Assets:    
Nuclear decommissioning trusts:    
Short-term investments, primarily cash equivalents
$14 $2 $— $16 
Equity securities282 3 — 285 
Debt securities:    
Debt securities issued by the U.S. Treasury and other
U.S. government corporations and agencies
31 18 — 49 
Municipal bonds— 294 — 294 
Other securities— 246 — 246 
Total debt securities31 558 — 589 
Total nuclear decommissioning trusts(2)
327 563 — 890 
Commodity contracts subject to rate recovery8 — 3 $28 39 
Total$335 $563 $3 $28 $929 
Liabilities:    
Commodity contracts subject to rate recovery$12 $1 $— $(12)$1 
 Fair value at December 31, 2024
SDG&E:
Assets:    
Nuclear decommissioning trusts:    
Short-term investments, primarily cash equivalents
$8 $2 $— $10 
Equity securities295 3 — 298 
Debt securities:   
Debt securities issued by the U.S. Treasury and other U.S.
government corporations and agencies
41 26 — 67 
Municipal bonds— 287 — 287 
Other securities— 228 — 228 
Total debt securities41 541 — 582 
Total nuclear decommissioning trusts(2)
344 546 — 890 
Commodity contracts subject to rate recovery4 — 4 $17 25 
Total$348 $546 $4 $17 $915 
Liabilities:   
Commodity contracts subject to rate recovery$18 $1 $— $(18)$1 
(1)    Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
(2)    Excludes receivables (payables), net.
RECURRING FAIR VALUE MEASURES
(Dollars in millions)
Level 1Level 2Level 3
Netting(1)
Total
Fair value at June 30, 2025
SoCalGas:
Assets:    
Commodity contracts subject to rate recovery$1 $20 $— $(18)$3 
Liabilities:    
Commodity contracts subject to rate recovery$1 $51 $— $(20)$32 
 Fair value at December 31, 2024
SoCalGas:
Assets:    
Commodity contracts subject to rate recovery$2 $1 $— $1 $4 
Liabilities:    
Commodity contracts subject to rate recovery$2 $44 $— $(3)$43 
(1)    Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.
Level 3 Information
SDG&E
The table below sets forth reconciliations of changes in the fair value of CRRs classified as Level 3 in the fair value hierarchy for Sempra and SDG&E.
LEVEL 3 RECONCILIATIONS(1)
(Dollars in millions)
 Three months ended June 30,
 20252024
Balance at April 1$4 $9 
Realized and unrealized gains (losses), net(1)(2)
Allocated transmission instruments1 — 
Settlements(1)(1)
Balance at June 30$3 $6 
Change in unrealized losses relating to instruments still held at June 30
$(1)$(1)
Six months ended June 30,
20252024
Balance at January 1$4 $10 
Realized and unrealized gains (losses), net(2)(3)
Allocated transmission instruments3 — 
Settlements(2)(1)
Balance at June 30$3 $6 
Change in unrealized losses relating to instruments still held at June 30
$(3)$(2)
(1)    Excludes the effect of the contractual ability to settle contracts under master netting agreements and cash collateral.

Realized gains and losses associated with CRRs, which are recoverable in rates, are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. Because unrealized gains and losses are recorded as regulatory assets and liabilities, they do not affect earnings. Inputs used to determine the fair value of CRRs are reviewed and compared with market conditions to determine reasonableness.
CRRs are recorded at fair value based almost entirely on the most current auction prices published by the California ISO, an objective source. Annual auction prices are published once a year, typically in the middle of November, and are the basis for valuing CRRs settling in the following year. For the CRRs settling from January 1 to December 31, the auction price inputs, at a given location, were in the following ranges for the years indicated below:
CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS
Settlement yearPrice per MWhMedian price per MWh
2025$(7.38)to$15.54 $0.01 
2024(3.69)to9.55 (0.44)
The impact associated with discounting is not significant. Because these auction prices are a less observable input, these instruments are classified as Level 3. The fair value of these instruments is derived from auction price differences between two locations. Positive values between two locations represent expected future reductions in congestion costs, whereas negative values between two locations represent expected future charges. Valuation of our CRRs is sensitive to a change in auction price. If auction prices at one location increase (decrease) relative to another location, this could result in a significantly higher (lower) fair value measurement. We summarize CRR volumes in Note 8.
Other Sempra
The table below sets forth reconciliations of changes in the fair value of Sempra’s Support Agreement for the benefit of CFIN classified as Level 3 in the fair value hierarchy.
LEVEL 3 RECONCILIATIONS
(Dollars in millions)
Three months ended June 30,
 20252024
Balance at April 1$38 $23 
Realized and unrealized gains (losses), net(1)
3 2 
Settlements(2)(2)
Balance at June 30(2)
$39 $23 
Change in unrealized gains relating to instruments still held at June 30
$3 $2 
Six months ended June 30,
20252024
Balance at January 1$25 $23 
Realized and unrealized gains (losses), net(1)
18 4 
Settlements(4)(4)
Balance at June 30(2)
$39 $23 
Change in unrealized gains relating to instruments still held at June 30
$18 $3 
(1)    Net gains are included in Interest Income and net losses are included in Interest Expense on Sempra’s Condensed Consolidated Statements of Operations.
(2)    Includes $8 in Other Current Assets and $31 in Other Long-term Assets at June 30, 2025 on Sempra’s Condensed Consolidated Balance Sheet.

The fair value of the Support Agreement, net of related guarantee fees, is based on a discounted cash flow model using a probability of default and survival methodology. Our estimate of fair value considers inputs such as third-party default rates, credit ratings, recovery rates, and risk-adjusted discount rates, which may be readily observable, market corroborated or generally unobservable inputs. Because CFIN’s credit rating and related default and survival rates are unobservable inputs that are significant to the valuation, the Support Agreement, net of related guarantee fees, is classified as Level 3. We assigned CFIN an internally developed credit rating of A2 and A3 at June 30, 2025, and 2024, respectively, and relied on default rate data published by Moody’s to assign a probability of default. A hypothetical change in the credit rating up or down one notch could result in a significant change in the fair value of the Support Agreement.
Fair Value of Financial Instruments
The fair values of certain of our financial instruments (cash, current and noncurrent accounts receivable, amounts due to/from unconsolidated affiliates with original maturities of less than 90 days, dividends and accounts payable due in one year or less, short-term debt and customer deposits) approximate their carrying amounts because of the short-term nature of these instruments. Investments in life insurance contracts that we hold in support of our Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans are carried at cash surrender values, which represent the amount of cash that could be realized under the contracts. The following table provides the carrying amounts and fair values of certain other financial instruments that are not recorded at fair value on the Condensed Consolidated Balance Sheets.
FAIR VALUE OF FINANCIAL INSTRUMENTS
(Dollars in millions)
 Carrying
amount		Fair value
 Level 1Level 2Level 3Total
June 30, 2025
Sempra:     
Long-term note receivable(1)
$359 $— $— $347 $347 
Long-term amounts due to unconsolidated affiliates359 — 341 — 341 
Total long-term debt(2)
35,409 — 32,665 — 32,665 
SDG&E:     
Total long-term debt(3)
$9,800 $— $8,652 $— $8,652 
SoCalGas:     
Total long-term debt(4)
$8,109 $— $7,691 $— $7,691 
 December 31, 2024
Sempra:     
Long-term note receivable(1)
$351 $— $— $334 $334 
Long-term amounts due to unconsolidated affiliates352 — 324 — 324 
Total long-term debt(2)
32,899 — 30,193 — 30,193 
SDG&E:     
Total long-term debt(3)
$8,950 $— $7,760 $— $7,760 
SoCalGas:     
Total long-term debt(4)
$7,359 $— $6,880 $— $6,880 
(1)    Before allowances for credit losses of $4 and $5 at June 30, 2025 and December 31, 2024, respectively. Excludes unamortized transaction costs of $3 at both June 30, 2025 and December 31, 2024.
(2)    After the effects of interest rate swaps. Before reductions of unamortized discount and debt issuance costs of $413 and $382 at June 30, 2025 and December 31, 2024, respectively, and excluding finance lease obligations of $1,312 and $1,315 at June 30, 2025 and December 31, 2024, respectively.
(3)    Before reductions of unamortized discount and debt issuance costs of $101 and $95 at June 30, 2025 and December 31, 2024, respectively, and excluding finance lease obligations of $1,188 and $1,205 at June 30, 2025 and December 31, 2024, respectively.
(4)    Before reductions of unamortized discount and debt issuance costs of $82 and $65 at June 30, 2025 and December 31, 2024, respectively, and excluding finance lease obligations of $124 and $110 at June 30, 2025 and December 31, 2024, respectively.

We provide the fair values for the securities held in the NDT related to SONGS in Note 11.