SEMPRA ENERGY 8-K 2017
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Item 8.01 Other Events.
Proposed Decision Issued Regarding the Application for Authorization to Recover Costs Related to the 2007 Southern California Wildfires (2007 Wildfires)
On August 22, 2017, the California Public Utilities Commission (CPUC) issued a proposed decision (PD) denying the request of San Diego Gas & Electric Company (SDG&E) to recover costs recorded in its Wildfire Expense Memorandum Account (WEMA). If adopted as drafted, phase two of the proceeding, which was intended to evaluate SDG&E’s actions and decision-making in connection with settling legal claims in relation to the 2007 Wildfires, would be rendered moot and the proceeding would be closed.
Sempra Energy and SDG&E have recorded assets of $350 million related to CPUC-regulated operations for the 2007 Wildfires. These assets are recorded in Regulatory Assets (long-term) and Other Regulatory Assets (long-term) on the respective Consolidated Balance Sheets. We are evaluating the impact of the PD on these assets as we seek to reverse the PD from the CPUC regarding phase one in this proceeding. In the event this PD is adopted by the CPUC and not overturned on rehearing, we are also evaluating our option to appeal this decision to the Court of Appeal of California. Should we conclude that recovery in rates is no longer probable, we will record a charge against earnings at the time such conclusion is reached, which would be up to approximately $207 million on an after-tax basis. A failure to obtain substantial or full recovery of these costs from customers, or any conclusion by us that recovery is no longer probable, would likely have a material adverse effect on Sempra Energy’s and SDG&E’s results of operations and cash flows.
We provide additional information regarding the 2007 Wildfires in Note 15 of the Notes to Consolidated Financial Statements, as well as in the “Risk Factors” and “Factors Influencing Future Performance” sections in Sempra Energy’s and SDG&E’s combined Annual Report on Form 10-K for the year ended December 31, 2016; and in Note 11 of the Notes to the Condensed Consolidated Financial Statements, as well as in the “Factors Influencing Future Performance” section in Sempra Energy’s and SDG&E’s combined Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
We make statements in this report that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon assumptions with respect to the future, involve risks and uncertainties, and are not guarantees of performance. These forward-looking statements represent our estimates and assumptions only as of the filing 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 other factors.
In this report, when we use words such as “believes,” “expects,” “anticipates,” “plans,” “estimates,” “projects,” “forecasts,” “contemplates,” “assumes,” “depends,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “target,” “pursue,” “outlook,” “maintain,” or similar expressions, or when we discuss our guidance, strategy, plans, goals, opportunities, projections, initiatives, objectives or intentions, we are making forward-looking statements.
Factors, among others, that could cause our actual results and future actions to differ materially from those described in forward-looking statements include
Generating Station facility and 2007 wildfires) or regulatory agency approval for projects required to enhance safety and reliability;
We caution you not to rely unduly on any forward-looking statements. You should review and consider carefully the risks, uncertainties and other factors that affect our business as described herein and in our most recent Annual Report on Form 10-K and other reports that we file with the U.S. Securities and Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.