Southern California Gas Co

What they do

Southern California Gas Co. (SoCalGas) is a regulated natural gas distribution utility operating in Southern California. It delivers natural gas to residential, commercial, and industrial customers. The company is a separate registrant in the combined 10-K filed with Sempra and San Diego Gas & Electric Company. Its operations are subject to regulation by the California Public Utilities Commission and other state agencies.

Revenue drivers

• Natural gas distribution to residential customers — Core revenue source; customer usage and weather affect volumes, but rate-base regulation sets allowed returns.
• Natural gas distribution to commercial and industrial customers — Larger-volume usage with more price sensitivity; contributes to throughput but is subject to economic cycles.
• Transportation and storage services — Fees for moving and storing natural gas for third parties; diversified revenue beyond core sales.

Recent performance

The company's annual net income was $866 million in 2025, down from $956 million in 2024. For the quarter ended June 30, 2026, revenue was $2.80 billion, up from $2.70 billion a year earlier. As of June 30, 2026, total assets were $115.28 billion and shareholder equity was $32.69 billion, reflecting the combined Sempra filing. No standalone SoCalGas income statement was provided in the excerpts.

Strategy

SoCalGas is part of Sempra's five-year 2026-2030 capital plan of approximately $65 billion, with 95% allocated to Texas and California utilities. The strategy emphasizes safety, reliability, and affordability of energy delivery. Management highlights continuing investment in utility infrastructure to support community energy needs. The company aims to simplify its portfolio and strengthen its financial position under Sempra's leadership.

Risks

• Regulatory disallowances — Risk that California regulators disallow costs, which occurred in Q2 2025 ($25 million impact) and may recur.
• Wildfire and liability exposure — California wildfire legislation and potential liabilities could result in significant costs and affect financial condition.
• Operational safety and pipeline integrity — Pipeline accidents or failures could lead to fines, repair costs, and reputational damage.
• Market and commodity price volatility — Natural gas price fluctuations can affect customer demand and the company's procurement costs, impacting margins.

Outlook

Management's outlook is tied to the record five-year capital plan, with continued investments in California utilities. The surcharge filed by Oncor and base rate changes reflect a supportive regulatory environment for infrastructure spending. SoCalGas is expected to benefit from the same capital plan and regulatory framework as its Sempra affiliates, though specific SoCalGas guidance was not provided in the excerpts.