Sempra (SRE) 5 Aug 222022 Q2 Earnings call transcript

Company Profile

Participants

Glen Donovan	IR
Jeffrey Martin	Chairman and CEO
Trevor Mihalik	EVP and CFO
Kevin Sagara	EVP and Group President
Justin Bird	CEO of Sempra Infrastructure
Allen Nye	Chief Executive, Oncor
Peter Wall	SVP, Controller and CAO
Faisel Khan	SVP, Finance
Shar Pourreza	Guggenheim Partners
David Arcaro	Morgan Stanley
Nick Campanella	Credit Suisse
Julien Dumoulin-Smith	Bank of America
Alex Kania	Wolfe Research
Britt Sunderland	JPMorgan
Michael Lapides	Goldman Sachs
Ryan Levine	Citi
Paul Patterson	Glenrock Associates
Craig Shere	Tuohy
Anthony Crowdell	Mizuho

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Sempra Second Quarter Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Glen Donovan. Please go ahead.

Glen Donovan

Good morning, everyone. quarter call. second Sempra's to XXXX earnings Welcome A is the available of this Investors slide presentation teleconference and on live webcast section. our website under

us Executive Chairman We including President Trevor and several members Chief Officer; our other and Vice team have Kevin Financial Sagara, of Mihalik, Wall, of Chief Executive Jeff Executive Nye, President Chief and with Martin, of President; Chief Executive Vice Group Officer; management Senior President, management Infrastructure; Vice Sempra team. Justin and Bird, Chief Allen Accounting Controller senior our and Oncor; members Executive today, Peter Officer Officer of

the SEC. financial may starting, statements diluted that materially in projected to forward-looking remind XX-Q within differ Before we'll call Company's refer Securities on our from everyone statement forward-looking this and a of any discussing most today. The to results we meaning cause basis, XX-K be share are presentation materially results the the could measures. Private to discussing of reconciliation presentation Please to shown factors for accompany differ our like the actual Act that Litigation those that I'd Reform make we'll Actual non-GAAP certain per GAAP discussed in be Earnings a in are recent the measures. and with slides filed amounts XXXX.

statements that today, revise it's Jeff. forward-looking the any the let in Slide June forward-looking of XX, does ended XXXX. the call And not quarter please in X XXXX. hand speak you assume and for like to encourage obligation important the XX-Q over turn also note update that, statements any Company these also to to our that or to X, We to of mention me review future. to this With August the I'd only contained presentation

Jeffrey Martin

adjusted earnings full-year EPS and results, the $X.XX the Earlier of adjusted range, guidance per XXXX morning, adjusted full-year XXXX we're XXXX you, and now share and $X.XX. reported earnings of per Based all EPS today. of guiding for us these this you our joining strength second to of year-to-date guidance Thank XXXX on range. affirming Glenn, we're thank we our high quarter end also share

offer platforms we've me energy future. the capital also of financial our benefit hard disciplined built performance. our think more have business to of perspective we we North improve growth The allocation the markets to operate some about and largest with to let the three large America. on At day Next, in operations how worked some in model, improve safety Sempra then simplify scale

have we platforms, these Within an set. exciting opportunity

several this Trevor we announced to projected as growth earlier a States rate, quick demographic confidence well support and year. our is sustainability. more GRC In States long-term slide, and filings. of renewable In summary. to work through excited as doing across combination, Infrastructure, the by making At Here X% of clean billion components to and XXXX, and plan one the solutions, over year, there strong area. Each At continued in our we the power and capital to LNG investment Zero this our the it are for we're average end drivers we And California, key next reliability exporter $XX in couldn't continue updates. became of will business advantage United the Net call investments turn lines. Sempra our Please are turn to the expect At economic is about growth to improving Oncor resources. Texas, this growth safety, support be three business recent which capital annual the energy the provide Sempra record XXXX integration leadership global number the where continued decade EPS I'll X% of significant United these LNG. opportunities all half of the first networks. significant Sempra cleaner extend

Trevor Mihalik

Jeff. the revenue with represent right for These Thanks, California, in Beginning their support update thoughtful by filed with CPUC our striking a cases Sempra XXXX. authorized requirements to their to XXXX May through between both investment SoCalGas comprehensive maintaining customers support general rate SDG&E energy filings balance clean both effort areas the the cleaner and for the neutrality goal needed of achieving energy and systems customer more carbon making to critical by investments have XXXX. affordability necessary safeguard resilient the of and utilities Notably, safer, outlined their infrastructure systems. and states

centered technologies to is GRC mitigation, system. infrastructure filing our electrical wildfire system as As hardening, example, EV an modernize around investments, such innovative SDG&E's and

great key and to SoCalGas, and enhancing expected energy investments for investments are SDG&E applications its integrate priorities update new CPUC all final through SoCalGas to For reliability for making Support lead resiliency, of in return projects to we with cost continuity while case April, to SDG&E's during for priorities four These examples cleaner filed safety working and customers. reductions their approved renewables energy improve these grid of emissions storage their new positive We integrity the to are its provide system benefits application. XXXX, outages authorized our and decision a support capital customers. power rate rates by a and long-term is the in on will forward stakeholders a outcome. are In to respective grid look year-end. these expect XXXX micro-grid SDG&E to advance and critical of both facilities. pipeline proceedings To further

emissions, a and Sempra XXXX significant a achievement and of strong achieved by state's goal Additionally, benefit California's from expansion territory. SoCalGas Oncor the economic demographic service XX% across accelerate is continues helping to growth energy This XX% focus Texas, a SoCalGas's its demonstrates reduction to of since a of on systems. recently XXXX. Shifting the reduction, its decarbonization reduction had to that by methane announced nearing of goal state's the XX% significantly ahead fugitive XXXX and

far this premises has Oncor result, a XX,XXX As added year. another new so

premise XXXX. has XX% continues interconnections growing than maintaining growth, in peak annual approximately is average. and organic This highlights experience increase anticipate top has renewables for above of to compared near near record in weeks an to the On to new set which in more Oncor X% expected penetration of temperatures. of in Also, national second significant for service the their demand ERCOT significantly seen new transmission requests growth the continued records industry term, recent quarter territory. of continue We electrical demand. high the And Oncor

plan doing XXXX. weather executing billion also events, operator, XXXX been As these a extreme its reliability against grid for during through part help, while record Oncor $XX capital grid has maintain to a

growth expect this again CapEx its fall. we territory, across significant program Oncor service Given will their be adjusted

forecast rapid positive is rates requirement As need done its a Utility Commission achieve Oncor working expected first of forward to revenue Texas go it to past, updated support X.X% five-year for meeting. to and quarter in adjusted filed to in the current rolling of present growth into Board October May, will The their the at XXXX. new a its its rate Texas's with trends outcome. rate effect continued stakeholders the reliability. Oncor the looks requesting in capital increase partnership In has case to Public Oncor with over

milestones Justin we've updates Infrastructure Now, Sempra this call to to over at I a where reached will quarter. the successfully important number discuss turn commercial of

Justin Bird

$XX the KKR Infrastructure. But next Please has in time turn Jeff development in the a our ADIA and grade pleased I Sempra platform the Sempra Trevor. would to is close recent growth formed business for three year, made developments to approximately Infrastructure's KKR Infrastructure strategy leading investment U.S. be the ADIA we with us U.S. with standalone growing collaboratively significant on our providing focus Last We we XX% and with billion. global billion, enabled of This investment sheet. to working North to American infrastructure June, Sempra and equity at with earlier advance attract portfolio to thought highlighting sale close equity slide. forward were partners more that to together LNG. we're Thanks, ADIA value to strides. of a seeing to while balance strategic to my talked the lines an look also customers. be secure are all helpful implied business. like partnership cleaner what of energy we In $X.X strong value has LNG to about

Cameron As in we with outlined of we Phase X FERC customers. and and the that hard ongoing completion to key worked our have economic LNG our last at include those amendment, of interests Cameron, our our pending streams marketing. regard work commercial to our quarterly FEED arrangements earnings call, process commercial recently announced align With competitive the

back-to-back under offtake to our will recall XX% share long-term of and purchase sale that agreements. sell to plan the and take counterparties global it we trained for You

Oil with to volumes which substantially have we of that confirm and & Gas goal, to INEOS, Company and a move HOAs Cameron this pleased X Polish result optionality the the as LNG. are We Port Phase Arthur achieved LNG marketing the between includes

engineering, to we Bechtel completed to expect to would the in summer process which This competitive joint time, JGC-Zachry and XXXX. running to FEED of be are Turning FID. we with a is expected venture. move At

approach Next, let focus environment, supply U.S. we This me European in disciplined in given of the of us on with Cameron, well natural Europe. production LNG. to linking the strategy discuss Port have served gas leading has a some Arthur maintained buyers with a LNG. marketing Similar current disruptions

we in into we highly hand Oil XX% reminder, would under work make the definitive are a the INEOS Phase The Gas volumes X order our the and offtake a tolling have FERC XX-year which remaining with QX and key the for X. offtake permit and strategic involve include roughly under & to of announced half type as RWE, potentially and Conoco arrangement in Bechtel project. ConocoPhillips, earnings permitting and initial DOE contract updated a finalizing and of framework or advanced Mtpa have partnership EPC arrangements. with signing call, work expert Polish Since a with the investment pricing equity a the Just receive phase company and of design a streams HOAs entered

substantial phase this the these Importantly, progress mark marketing in of announcements project.

call. interest work of credit continue and We our is great you including customers, equity third look agencies. advancing. rating debt have probability The coalescing around on the we contractors, from As holders, November will continue quarter from investors European it moves we and in this, to positive forward that on to forward, progress future greatest see stakeholders, are buyers takeaway with projects updating volumes to

results. in next the to one exporter slide, Please of to allies Jeff geographic also we our can to where facilitate quality global the to development the our business Europe security the the has turn U.S. turn advance discuss help Sempra's positioning earlier, this Trevor become on position Based Asia, energy financial call their transition. of leadership sites helping and As believe providing global mentioned area, I'll and recently LNG. number to back and our while America's the energy relative

Trevor Mihalik

Justin. Thanks,

refer Sempra's XXXX year-to-date $X,XXX per adjusted were per earnings our On $X.XX XXXX million $X.XX to morning compares million share, $X.XX million XXXX Turning of per growth $X.XX same in million $X,XXX share. which share, This earnings XXXX were quarter this the Utilities, Sempra million can of $XXX following. be quarter $X.XX an GAAP earnings by million to operating primarily There last higher earnings higher higher next The a Infrastructure. the turn driving period $XX turn net at in of are please this Please summarized share. $X.XX XXXX second per year-to-date $X.XX compares quarter compared increase to adjusted $XXX Texas share. and for to million per which to or well CPUC invested XXXX or customer quarter the at of as $XX reported higher of or $XXX Sempra share. $XX $X,XXX year-to-date so basis, adjusted items $X,XXX and the consumption were of earnings year This share. compares XXXX of variance a financial GAAP operating to million FERC we detail. slide. earnings Please to next And of earnings million Adjusted capital. variance, number earnings $X.XX second to per or results, SDG&E the equity million year-to-date or earnings adjusted On second further earnings base of XXXX or second appendix earnings at to due compares $XXX our basis, as GAAP million share. margin, of earlier per margin quarter SoCalGas, to expenses per GAAP SDG&E. at or or of the slide. and first XXXX

couple As we prepared let me our you close takeaways. remarks, give of a key

of in the this comparing It's results First, have earnings to interest same XX% accomplished sale of first the XX% a of posted to results X%. equally period these growth Infrastructure. that we the adjusted the note even Sempra half with and minority important adjusted financial XXXX, growth from of in we year EPS

and came execute space. Second, improved a exciting in capital development opportunities, strengthen we've time, the particularly us of steps put opportune structure LNG to SI's have diversify on taken at position and new an an to in the set

Third, focused Oncor grid California, progressing safety on works towards going customers at excellence. pipeline that, on Texas, extending Infrastructure. finalize its remarks. our prepared stakeholders forward, in we overall this a and and in with concludes case resiliency which milestones remain executing development improving our outcomes rate our includes strategy, at Sempra operational its achieving and highly electric constructive base GRC while to further And constructive Sempra for with By

questions. open line and we stop to your take now I So, can will the

Operator

Instructions] with And we'll go Please [Operator Partners. ahead. first our Shar take question Guggenheim from Pourreza Thank you.

Shar Pourreza

Good guys. Hi morning.

Jeffrey Martin

Good morning, Shar.

Shar Pourreza

obviously the of the higher with rest year? you any appears you take tracking some top updates are maybe of update 'XX upside. how 'XX other to the plan a you're think the importantly, 'XX optimization you I of it we about the sort thinking anticipate of you and further 'XX some benefits into more optimizations? especially now well as - on recurring bridging now O&M guiding the as is about of How just that forward there And ahead pull guess, you're we're of thinking base commodity are Just like or then cadence about, especially to

Jeffrey Martin

that would this Shar. year, reflecting the that our questions, grown earnings by decade, over per on the an mentioned just prepared roughly this in share I start remarks we've appreciate sets excited in results six at into the we very income plus annual fact I we continue growth the Well, strength Shar, the CAGR. last the X% range we've I our would end X%. of my to we plan given adjusted that XXXX. to expect rate some prepared of our up note, got is the And in a And for fairly think And us guidance. the fifth EPS of ahead the remarks, end itemized that very, of for range growth for high about obviously strong think, be half We're we're opportunities we our that's story. I guided years long-term the being of increased characterization. average the I the the to high continued range of think to first X% in in time the in right the or certainly

feel will So give a head position we you definitive call, we into QX some pull through as update. be we there to our better more in And like be in should XXXX. a

Shar Pourreza

I be X, maybe agreements in feasible is Cameron That given with relatively stage - guess, done, what you Perfect. time, now hurdles helps it like would just short bridging. expansion Okay. the to Port Port mid-'XX if putting then finalize X? oversubscribed, we're timeline Arthur optically And along to are a us? the as just Like FID advanced Arthur is did of the for EPC in commercial and

Jeffrey Martin

ball. sports ways you use of padres last metaphor, Yes. one I our Shar, us, days. our have tell of talk in would couple to there I smaller thinking we're people is a may that FID the playing Diego a And San decision, know, interest of lot about about over followed you the some

the and Moving are LNG in basis Justin runners and around what business. Faisel our exactly team doing the and that's

question. expansion refer and heart me Arthur X, to at get by of where of as to or your start get Port with just we're we right at I'll and what the to kind Cameron Let characterize Phase

continuing our Cameron, agreements We're to definitive with at partners, move forward and we're to continued works. namely move competitive advanced permitting on FEED the SPAs. on commercial we're into progress First making

as series to steps you using yet, expected the The some exciting streams developments, at confirm of of We an make their We've could where half times expect an FID correctly sure HOAs. occur we're A in for I can of we as a X are know, you summer next fall lot optically and in buyers through but an subscribed secure thereafter. had is convert scenarios in those to an and interest we to kind think set even work of date in SPA and those FID thereafter. Phase next least Port decision FID middle us not I the to to SPAs. in HOA noted the XXXX of XXXX. with assess prepared At complete there Arthur, quickly first facility want move

conversations they'll already we're it's thirdly, with We've development important Secondly, Then started with very process. Bechtel. underway work financing we our our that think evaluate us, helpful partnership optimize ConocoPhillips. activities. another as have and with very very, FEED We be advancing we

from is So our an perspective, exciting question is project. no Shar, there that

manage the in the described at will Our the to goal this a point to November and a call on just position it that in projects be better our update. for is I you shareholders give value a definitive work way maximizes more streams,

Shar Pourreza

Perfect. it. last obviously in one is there projects that quick one are multiple parallel Then Got Jeff, path. just, is advancing

the maybe to that, as you've Just ways given build get being this reiteration your as the want just out, LNG these business? been capacity you an free incremental that growth equity to able see some opportunities you finance projects, go debt at through the

Jeffrey Martin

months XX also the of not balance Infrastructure, and But the Sandeep that you took flexibility. capital steps because lot the I structure. tell this. Yes. and Sempra with spent a and Trevor team gives as you form made give Justin, strategic around series we've lot work this them only sheet a last moves diversified I And to of credit and a in have standalone Faisel will of we us followed

we outlined how you these about ideas that a projects. of we've give let So previously expect couple me

you use First, can as non-recourse we know, financing. always

on seen team this X You've on the do through X Cameron ECA. and

as Shar, down also a in off at equity project can plan Port to interest partners And comment with to we're takers. would XX% our look bring we've mention, we the Arthur. Second, level in Port This project expecting to we ConocoPhillips, the equity I done level past, in equity take our other earlier, also Justin Arthur. in may made current but sell is this

the great this was fourth flows, say sources in would third-party quite the Sempra it ADIA provides debt investment surprise grade credit, with inquiries this our know it significant Third, I to and us And with from capital gives is probably in another doesn't other with Infrastructure to as structure, markets. we're a development reverse and lot of for us capital of also routinely you to important parties rated then us inclusion and other access an third of an that projects. cash the option participate taking KKR

Port our owners. and make Arthur sure move most for X Phase So X forward sure lens through also goal as often high project really creates the Phase lens value it process and all we're the the for in of these options through our is getting development evaluating we Cameron the making quality to of

Shar Pourreza

Perfect. Thanks so Fantastic in guys. it. much. I'll queue. Appreciate back the jump

Jeffrey Martin

Shar. you, Thank

Operator

we'll And next Please Stanley. Morgan with Arcaro take David question ahead. our go

Jeffrey Martin

Good morning, David.

David Arcaro

Cruz on some news if Hi, late, help the talk one Salina morning. on taking forward so site. could project you they're the And I'm hand of that does much terminal Pacifico also question. CFE for thanks you've I now about talk was maybe good LNG curious place got just agreement you Hi, move wondering and about in incrementally? project, of the that the the how could then

give, strategic of it's in timing, be Just any size, able early to you other cetera? competitiveness might terms appeal in et stage details

Jeffrey Martin

of some understand I kind with projects. marketplaces, on we developments the that CFE, summarize referenced some views newly I your think kind our question If recent these of of Yes. correctly, of

I of have continue three does XX wonderful in country. and So the to better we benefit Ortiz Mexico relationship start in grow with President in different would I've days last to meeting very the saying, we had relationships the constructive Mexico. job serve Tania that with about that Mexico. XXX how a And times probably

us needs short SI's need energy space. the our references the in by of to Slide project you in appendix infrastructure of the Sonora way picture additional as term, recently So the investment, it's the long in There go a Yaqui be Mexican positioned energy up But of forward. development the well think issues of because government couple around indigenous pipeline they'll some There I think is big we resolve at territory. to work mentioned, projects that a particularly and new signed for help still the people. and reroute term is of commercial meet to the the network, by XX, of the list David, anybody investment country. on some to summarized done And with we think I size of we existing terms

an is we're that stage, CFE volumes land that's release, forward you think basis. X always we two make by is state also Pacifico government natural when is government you going with and can project and think that's work work have so million step. gas with And around sure type having a on interesting we secure federal accessed on your to local, to is permits. to of that Mexico we of we're annum concession, the on Vista of very that important attribute, something your ton capacity conversations It's development access project. a a build need a to do So constructive we continue nice to the to per pipelines. existing And the

kilometers about XXX Salina the interest As there. of There's in that's lot a migration an in things of to to which is width. root narrow that's the is at we the quarter kilometers part of to think create waste about the that just over of one a the estimates Cruz, of as industrial country XXX interesting Southern causes Mexico,

have Pacifico, such we Coast the would we Seaboard, similar LNG we Asian transfers on is so about reach Mexico approach days facility an the the it to is position It's cooperation it in industrial to selectively. potential Number but Because early sea objectives. a tend to could Number of one, raise the for XX two, find and side, ability taking far And to to Gulf it Vista on dollars our meeting way administrations we're the it with access an a is ECA standard three, a different we very LNG hoping Pacific. the Gulf Mexican been because today, well unique a policy to to to down country. what marketplace. goes Cruz strong that work do we living as in create also really with baseline the their X so trying they're Gulf to U.S. of Salina in geographical to do opportunity markets in think have put number President the in they have I Phase the LNG to more government, interested for opportunity people. the with zones, as various in XX Mexico facility, stated on think our try bring down David, that stage, tie to provide very natural we make sure I gas there also

David Arcaro

helpful. Very Thanks. Excellent.

Jeffrey Martin

Thank you.

David Arcaro

in here? curious, question, case rate but I on process, case, of Texas settling was any prospects Separate thoughts in the it's the terms in I know of early the that

Jeffrey Martin

regulatory outcome as just later helpful, some the you we've Oncor our outcome base perhaps additional say Allen to provide call with around would the a year. would May Texas. be with rate benefits the you But move and say forward I this a start-off, it of final I we Sure. Allen if that payers us good in let's just in color rate recall, from today California to process get application its the similar a filed view toward to got utilities, reaching on

Allen Nye

Yes.

the Thanks You for question. bet, Jeff.

on Kind As them are Jeff filed right a let we're in in May, we've of think few the September me going. asked that coming end just XXnd I'll dates direct been of testimony by XX the quite so I some responding to on important a up, due with we're phase case is it's where through discovery then we discovery where testimony we October of Jeff our now hearing proceeding, RFIs saying X. merits, month. August And get necessary on on obviously will said, are kind the of on now. be said, we're start then staff and XX. to due Intervenor September would this the only if Xnd,

right So we now. that's kind are of where

where going on or five and calls, times we're know, the these many so. you years over said I've Now last

We staff have a our strong along over state and years and reputation Austin the and with reputation is get cases. find for being very doing in strong and and our constituents of rate to years thing work solutions including that and right difficult able built and problems

that And market of have history and ERCOT finding customers good cases company. a to analysis, outcomes, they so and we and our these interveners do appropriate state It's analyze in essential in filing, our rate our benefit filing always that need important ask that rate the what it's doing we're your now. to to that's questions our the have to allow time really to cases,

case. we be work we it. or that with to It's done constant the ask, very they do all past, in few to in However, settlement something them how we serious and going our communication will not questions But easy. know are need over have us that in And negotiations, the our have and to very soon, we're next state and they benefits to the months. figure customers. hard once And in the try the out weeks we will asked engage in parties

case, we I in to engage we're good I are. in about you. in hard these good way summary back where of I we time of we feel future. to So of settlement the happen that about which so now, and And Thank our phase, our a work one the good talk suspect kind stakeholders relationship. very about the that's near manner our very that's now, in right more in we're are lot kind about discussions. a by very try where history going, or get in have these we'll we'll I the But But we October, where make the still discovery feel feel very other.

Jeffrey Martin

Allen. you, Thank

David Arcaro

Okay, Thanks the great. color. much. Appreciate so all

Jeffrey Martin

you. Thank

Operator

will question with ahead. go Nick our take Please Campanella I next from Credit Suisse.

Jeffrey Martin

Good Nick. morning,

Nick Campanella

virtually everyone. adjacent you. their keep what I question lot that I'll territory to guess, know of afternoon, we've and seen good service Hi, folks talk needed years, meets forecast. And thinking but load - about anything of discrete with kind an of updated I up plan a year every hear for here? versus Board Nice what's the about And years from Oncor, kind when system to the Allen. capital specifically and higher of we're this the on there prior the kind is of different magnitude year,

Jeffrey Martin

a two I question. ways pass it different it's Yes, and Allen. will to you frame it great

team I the opportunity seeing might growth is want in might that current on the ahead into meet later I reason growth move the helpful, your and marketplace, be to of been Board program if on when And one. drivers with that's an $XX billion Nick, is there your think be important just capital that think has you've in I But secondly is, fall? the to decision the we gets the revisited doing it it don't Trevor number that expectation maybe I, fall, just for some talk of meeting increased. capital about just that. our and growth to how to budget get it play beyond work the an that Board Allen, that

Allen Nye

we're state relocations state. organic demographic expansions large X,XXX continues now, still XXX see with for appreciate demand just, industrial growth. like really point. I growth high strong GlobiTech like the again. seeing seeing your we're Taylor, side The services things companies to very what just here, just your question day move we to and Jeff, Nick, very our point, Sherman, Fortune and And I'll Yes, Samsung both We're on the growth, in are seeing and most any a people that. TI, corporate in And seeing start the

just his new independent kind of XX% to June, history, in earnings couple well far forecast July, say, request received there. we request Trevor two, on that's our our service new So Company's detail about very statistics, release in our them to very as I in subdivisions so And suffice into what go on path covered so our factors. and one. release which strong were of include are know, growth premises are of presentation, a a are go, not going serve - I'm press as in But as we strong. our have we for we other the in what above already largest then our to up for had In mentioned

zone premise are we incredible And need out the after continue Loop, serves peak continue peak the is then positive, Far the on that highs. our then very, very side Midland Stanton our record investment and outlook as area, to just the as at new POIs we at similar to demand on West stated our So for Texas materials and on historic basis. Culberson Stanton see Loop, see in weather growth Culberson on new very west transmission

And October. hard do So going already October Board going switching that in these those are are our in we going into point, Jeff's that with minds discuss on then our of very and CapEx, that. working from to things all back be to to to we've the you been we're and some updates know, the

talked into And on we the Texas, is growth going kind of the October of so traditional of these growth, about yes, calls. all we're things why, traditionally the load state

causing service, on now the we our other exercise different. doing what I into has our about going traditional our On need piece I think we over that the we already and to some from our period that extreme service alluded on system the one shifts this through what address we're we very just seeing to and of is, the things. pressure are that think want the year and the really a is most been of the resilient. feel ERCOT exercise, customer team plate these can we and out to harden seeing that to which weather then would have need, Yuri I some make we of of plan. real hard this to But so this. that's working years summer. potentially to reliable Jeff it's been we're And how utilities and given do extremes it we an our try same October of figure But We'll what have weather - given on kind seeing piece, going at more ensure of make look it announced we've the some is are the necessary Then we try of know system. We the to going provide things the we Boards. the best which this customers, already have growth, have can do on that some a that all and many other slightly the

be meeting of it create potentially probably on to been the for going about our investment when system. Thanks. past. October little more will expansive, yes, talk we think CapEx lot opportunities And a than our that's Board I So a in has

Nick Campanella

Thanks out realized guess six - momentum just there through is, financing the these have on of you still eight we was the of of more considerations, the beginning quarter on a great. that level you lot this put allocation outlined a fourth to a be here of same this in LNG thinking question year 'XX? lot. I business since capital and then. should to think kind buybacks That's as plan about a you've And all the

Jeffrey Martin

for question. something dividends with conversations that I've and that I One have Nick, Yes, of here. appreciate have a a is It's thought how something been capital we allocation talked takeaways lot continue buybacks a about. Trevor about couple stock part for Since of Board undervalued at is our as we'll and you our give a roughly I But foundational the value price about the owners. that would term, of of shares repurchased time. as create long $X.XX to last And been $X.XX. way a we've each roughly period an at being billion Nick, repurchases, summer, at effective and we to juncture tool of across viewed had had

I is the in investment materials call our into strategy likely particularly clear, will again the he given very horizon. of lead as the in That's toward some of shareholders. to group. where team capital Nick, overall Trevor revisiting to opportunities, peer growth repurchases why we some projects fall, evaluate believe future, trading evaluate for we've our with has to new the undervalued, go value also the opportunities but our to our capital done and in expect outlined fall today's continue is This view stock every allocation a options, will that share stock those move long-term our our we into we be exercise, on our driving maximum will today, Given relative to our

Nick Campanella

good day. Alright. Appreciate that. a Have

Jeffrey Martin

Thanks, Nick.

Operator

question We Dumoulin-Smith Please from with Julien Bank of America. next our ahead. take go

Jeffrey Martin

Good morning, Julien.

Julien Dumoulin-Smith

Pleasure, Jeff. afternoon, Good you. thank

So, Jeff, clean metaphor up another here. me of let is here, there on things least couple baseball if a at

just legislation respect If with across here, can IRA up and AMT about to taxes that Just here? as brief preliminary? the get I here, thought in you breaks how businesses any super

Jeffrey Martin

for it the the a a Yes. that in part XXQ it like bill. the variety Obviously up. companion this bills as the is may has changes. We bill, Julien EV for think like certainly the of raised the opportunity draft, of the go subsidy makes We permitting sense We separated been world. to market. there and Streamlining, all that be fact go through will certainly we think support an

issue, we're Trevor, of minimum terms the tax and of you that. just go at how kind address looking In book

Trevor Mihalik

or Julien. slight Hi, And right impact may an manageable. on a Jeff. be think cash think real from but will earnings now, the cash Hi very impact on a assessment tax impact, then the we're really there be looking standpoint. at look tax earnings we Sure, we what of non-existent initial de minimis

overall, way - think it's now, So through right easy I we work the the it's to drafted think very

Jeffrey Martin

$XX bill see we and goes billion having material forward, whether doesn't And go we a way. program it looked at, the it against Julien, capital forward, our don't impact either

Julien Dumoulin-Smith

backdrop how frame a holistic here. at about value at you to here, of being to a I again? sharpen We're sense conversations about sense back site. parties your that trying other just we're that. our do and But And again to pencil Any any for of project you it's around Port kind preliminary going proposition the updated just that all, here bit. a just cost looking And think Thank obviously clear Bechtel in of greenfield the with Excellent. inflationary little Arthur get number here?

Jeffrey Martin

haven't projects be world. will with going Yes, the I'll or about, it. to Arthur, per debottlenecking Cameron the in publicly announced bit two either project, one also because associated of brownfield built Port give things benefits but Cameron some We the you it's think calls cost a for because have to think we for lowest it unit it's

caused you relationship we're we've a structure competitive of with in things base of can here, in project, a is, need could is about Lance, work of of the good Now, region. greenfield done to news look At still obviously it's the kind project. working feel in call our we excited CEO. at ConocoPhillips the process. EPC Gulf But good yesterday, with other be at I the more comparables contract not We their Arthur, good very, about to Port are very Then cost world-class Ryan these the that the a what some get got are Gulf. both a news addition it's with.

in to get we Bechtel, bring different and partnership, think done of I an and a lot expertise world. have us opportunity to structure. and LNG value the between I they've They're to projects cost ConocoPhillips right XX the think going to our

Julien Dumoulin-Smith

Got it.

about on your you first when Trevor, part the update and of this we of leaning you that even to here if And When some to think downs kind So as when lining about ago. seems of some it SPAs to for need just alluded for a just announcement, sell equity the to I Is here and that moment also coming. maybe? have of fall you that see do together, you partners you I putting up that. this the 'XX could everything do think start mean, that half alluded then like

Trevor Mihalik

choreographed got bit I is, mean, in, yet more got more about a is, a work little year this amount make about And Arthur. just of streams creating Port extremes I underway this be We've through that No, lot not we've we've I think the in is, a I far to we Port talked comment to right. want got which we this now, ahead value. right to shareholders, Julien discrete. But excited of be series of at do those work what think utility done were for about what a probably enough at work running want we could think of what I us lens we're the we're to business saying of just streams on Arthur. And Cameron, is where fair we're

our lot investing in about risk. or space assets that risk. we won't low is expose be construction other And strategy, of a a So defined T&D opportunities that people have there commodity view LNG have type take in for

give team will execute. make of projects that cash flows of job to choreograph can investors we these Our be clear come fall, doing the very to we work utility substantially expect type to similar And make risk-adjust looks flows. in those it our sure as box, the later our the we streams the to put those a view back in and sure how cash they work is that's we

Julien Dumoulin-Smith

right. All guys. it. Got Thank you

the LNG mind. an on Just

Jeffrey Martin

You're right.

Operator

take question ahead. our And Wolfe Alex Please next from go we'll Kania with Research.

Alex Kania

the through kind that permitting just as right more may be be a benefit CCUS bit how potential? in parties thing, other kind Do more Great. onerous a off-takers, mentioned do you simplify kind more a is a bit see likely higher if think you're talking LNG, European maybe maybe elaborate about of being and Thanks think you And important of that would way but off-takers, is that you about tax Maybe could for make is that bit that just and to You just well obviously of an permitting to good credit a the thinking now, rate development? about little any discussions the little such them? - reform of there tax terminals. a potentially to petro one little to my then electrifying another as on maybe taking question. you terms a

Jeffrey Martin

our big Sempra ago, And things commodity company. first tried questions to how transition infrastructure desk. continue big it for we opportunities. pass energy continued the you carbon energy let little some a an I me strategic of And A and part Justin, to company, a infrastructure, sequestration I a investment part we Board right, we here. about in we're work of of those XX think the particularly five leader Alex network a our Alex. of back is we've to will over what question a in on is, continued will years bit Directors, address years Thank decided basics namely profile and last was your But gas of the the as the unique talk over Yes. some America's focus we the one in molecules to with of the a support go on part grid view big expansion. to think North like - to transition. electrify have that be economic lower it, we side, about green clean as grid move risk position the and to toward be a And

sale you as in our for example, we spot. right of sweet this for LNG, So is the about think approach how Europeans

top those may green world there. of So business. power Every to four a the limited helping gas government Mexico, generation the away we're kind local facilities. And from utility. tariff - of not renewables our that's renewable three natural or developer generation to move fired in In Today, around in something couple oil this from to and compressor renewable is facilities LNG our examples source be California there stations. one our unique of

somewhat sure to we So We But project an our own how expansion think of in with we going Cameron, specific the And actually the it yes, there with on basis back more for we your opportunity competitive. help make built us business. the can delayed be is does electric actually at to it's question, to Europeans. line be intrinsically the think about that drives.

over certificating fact the we're a certainly the that So like of Europeans looking at time. period longer

And operating where increasingly a that's plus. emissions facilities power from including gas. upstream get Our with standpoint, that is think an we time can if decarbonize, the electricity those we our source we over natural our

competitive be reduce period competitive profile. basis, the source United and cost actually LNG a So I on more over but able a will of the to deliver time, also States a emissions think basis being long on of leader and

second with So carbon, your approach sequester my side. prior again of talk But sequestration you our aligned part Justin, the the opportunity maybe the is on to comments. question could about

Justin Bird

has about I facility, you, the exciting in EIA about And if think will sequestration. Yes. net-zero Alex Thank reduce not excited to carbon new Hackberry, emissions you substantial get think we're Jeff. help very it equally, it's because with business. think as without that will we we an said, the part, opportunity Yes, associated Cameron

for that X quarter EPA. with permit the in third in carbon injection of 'XX, light, a Class filed well we So

and I EPA the to the do process talked are participation to projects May all early support You all signed reform, the doing make it. it's agreement are industry we process our right that jointly for sure expedient to along we this considered. about we stage In and factors help think with these to this can to of with partners and make excited LNG permitting opportunity. the year, Cameron about very develop We're consider

to doing as a Sempra QXX a higher energy referenced But SI, that at projects the in and asked are transition. the of I earlier we as part project. all admitted Jeff Europeans, we about change can I you I and level, our benefits think to SI Alex, as think to promote make think less the again that

to a our through gas, also changes mentioned, gas. sourcing projects that's reference through responsibly we're Jeff source carbon that And drives, better. will Jeff whether other and whether make As sequestration, pursuing design operational made electric

Alex Kania

you. Thank Great.

Jeffrey Martin

Thank you, Alex.

Operator

take we'll Please Tonet with And from ahead. next Jeremy our go JPMorgan. question

Britt Sunderland

the greater if I you Hi, that has could Circulation for state from Jeremy. I'm Britt the on up come some But legislation? federal curious Reduction today. the Thanks via follow leading time on the see for already goals. wanted Act changes in Sunderland good morning. It's to potential support California questions. any environmental

Jeffrey Martin

great California space bill news the decades. think I leader particularly about think the the Look, for that or that good I vehicles. four for support And in a is things three is the has been environmental one it IRA electric

States continue doing anything I we're So to is positive. help United to a decarbonize think the

collaboration back a of and some again bill. revisions lot look But it. I think that's a the there California will have views would and be of between it perspectives of find think lot step I positive embedded but policy in of a changes today, policymakers different and it's and that think alignment draft in lot different say, has I taken you'll on We folks a number who going forward. attributes, form

its to going evaluate it continue we're So form. current in to

Britt Sunderland

the refresh EPC appreciate ways, of the on started couple I walk should this finalizing from just separately, And of end back that there. that I Bechtel and you commentary work. different been but then end? Arthur asked that just on wanted terms Port a has to that circle of provide the just start to process process when the Can background when in and of the to

Jeffrey Martin

or book an working of Look, years. time and processes structure the on this refresh we're that a about with their something down bring with upon them. Bechtel we've is get From them number to all working based you're that's right and a time, that to been now. cost really earlier updated cost And fall. for you'll from It's ongoing talking open process is work,

Britt Sunderland

very for Thank you it. much your Got time.

Jeffrey Martin

you. Thank

Operator

Michael go And Lapides with we'll Sachs. question our from next ahead. Please take Goldman

Jeffrey Martin

Michael. afternoon, Good

Michael Lapides

couple guys you taking Hi. questions. Jeff. have for morning, Good Thank apologize. actually I a my I of,

one California rate they The of expense of cost first Z saw California. what terms SoCalGas recently and the and a O&M in those cases just utility the in both in one about how for make are the alignment. filing, Talking wage actually utility in labor escalation? had while we Texas between we Factor maybe haven't seen Can talk in to get a inflation, incremental you different, you're and seeing

Jeffrey Martin

three rate of SoCalGas, of three his lay And is, as reached union. SDG&E most in rate filed but the and they've year the Michael, I case for O&M this adjust earlier to recently labor in May the And that through you today, expectation case. try capital. five-year the is and think it out ago. important our Allen with outlined Today, or outcome we what's actually about in years what their of part a is, expects we agreement costs cases have each this ago most do get proceeding Well, we news been their us rate all is, for what year good following Edison had year. Allen good with other of participants fall and important cases two, hope. then SoCalGas this we're we our plan, marketplace, But a just

October, a in All of our California. the in structure were into November these bring I costs be it's cost going will current May. there And And here down filed in that are filing. cases think rate to

and is next really and I for apart from and thing down account of on benefit mechanisms Sempra cost, in six that XX separate think to months. this, So various tailwind the our really a of to one a is is all to the bring really

maturities given and which cost actively borrowings. our would his is which variable much managing to these been The obviously mind interest exposure related Trevor But businesses which impacts all to I have Michael, thing rate your to three debt. their is other environment question, on of how the team touch and leverage

XX% limited think sheet all and done a to are They lot So XXXX. California have a of of maturities now don't Sempra at XXXX, to Infrastructure, you the recent reduce very got maturities, mechanisms our maturities. utilities, our Since And have financings. in about near as able which today, term XX% recall this we all from term limited At we standalone debt any cap between been we've regulatory and balance an and near example. Texas. to roughly we've and are in

the with we worked raised in [$X and So last million] months business. XX ADIA KKR and that even from

will cost like great structure, think our rate Things following our updated shape you which on. pending we're rates it cases. closely, about in in as interest were think we So, be current

Allen Nye

a yes, as was just cleanup, so it XX And XX, to Jeff, XX...

Michael Lapides

this Trevor. And for Understood. maybe one

the lined coming, the may and just the in a CapEx lot CapEx in on the like curious about or have of doesn't beyond, more got as and demand already Texas. next would given Texas self-funded XXXX go of part up that phenomenal year of you've It that be ramp new subsidiary. connects up, in of parts trends thinking Just how core cases. then that which CapEx operating down And LNG seem would California at those part probably the look you're rate be been dramatically

on actually what you're do short-term $X of under-levered? the almost debt no the books. or very short-term point maturing getting At You're think cash have sitting you with billion debt you are on amount books, limited of currently

Jeffrey Martin

$XX can we as got through we've of obviously I Well, today's billion, fall. program record take the think processes a you from capital go call, this

thinking I on where next our back you was about We over. take think think our Oncor balance would managing go? forward? to call the when under, or we year. but over to about to Trevor come expect certainly if CapEx the How as maybe take I going about feel you sheet, are February I sheet balance going great you

Trevor Mihalik

of of to a that And Jeff to that since got their XX% proceeds Yes. paydown balance our their that lot in deploy said, continue cash growth as a the utilities resources are got Oncor base the areas. seeing just deployed on the to and the short-term debt that with in opportunity continue to Sure, opportunity just again, flash time, ADIA across time. bring at and Jeff. we've the businesses. systems at we to certain from we're and But And those sheet period of and lot capital Michael, regards a sale an three But the rate balance Cali that's various harden the so particular have to we sheet, of again, cash there. kind to sitting of

likely that going see CapEx be about the term feel a as deploying continue that plan. to will into most way good that And in deploying capital we CapEx so cash. we to up near continue the And

Michael Lapides

you remind can Trevor, does does the And that generally or the cash it. its to dividend me, cash up Oncor finance company to Oncor retain Sempra Got back holding growth?

Trevor Mihalik

are as dividends to cover payments the will cash so of distribute earnings. business, front minimum Right cash back in certain back we now, both we they a getting as do cash in into deploying lot of capital back amounts they have. with excess and quarterly to their cash, continue at on payments can but cash on a have of that the that up tax we that Oncor. LLC Oncor them, us it well do see And tax, under tax a agreement we basis us, tax from payments up No, the

Michael Lapides

Oncor is Company? Sempra largely self-funding Holding from the

Trevor Mihalik

Absolutely. is Yes, self-funding. Oncor

Michael Lapides

Got it.

Okay. appreciated. Congrats Great. a quarter. on Thank good Much you really guys.

Jeffrey Martin

Thanks, Michael.

Trevor Mihalik

Thanks, Michael.

Operator

Please Levine ahead. our take from go Ryan We'll with Citi. question next

Ryan Levine

Hi, everybody.

Jeffrey Martin

Hi, Ryan.

Ryan Levine

cargo of LNG contractual opportunity benefits if during the of and terms comment beyond? into the that impactful be quarter? on from quarters And the In day you that have to quarter, for was a that the how can have diversion you you expect future any second

Jeffrey Martin

Yes. you. question, pass to it and Thank for to Citi respond alumnus the let a Ryan, Faisel I'll you

Faisel Khan

Yes, Ryan.

talked mentioned. over about a sort So X.X our of last down I sort day bit to quite you we've the the several as years, really of exposure, contract think a comes Bcf it's by the with Tangguh

dollar price that after-tax million of up our for contract $XX earnings earnings. over just index and increase by every or move in down sort from so decrease in the in And

to you what important, Whether a come cargos it's not itself of just isn't kind that's is So contract price. the indexed the in really see. or

Ryan Levine

what that quarter? a this Give during on was sense

Faisel Khan

We on give - an annualized we disclosed you basis.

of is contract to, how that to way, I kind up of there want if kind seasonality you can the is, work but split mean, you it. So, that's

Ryan Levine

is to it enough reduction CCUS pass, there? the the to Would inflation briefly hurdles forward? reach FID project then were Hackberry's there opportunity, And extent that move the Okay. was be to cross mentioned to any mitigating that

Jeffrey Martin

a forward, Yes. it obviously, certainly We've it Cameron agreement which moves $XX the the other to with goes continuing partners. that to I made a improves the the some if we're similar $XX appreciate participation from tonne, tonne with the projects standpoint. economics. recently permitting progress metric a from some Obviously, question, there process metric

importantly, So to terms an exporter. it's thematic Cameron a project as as competitive building, it's that LNG think making about we're optimistic But about more of Ryan. just we in how

Ryan Levine

my Okay. for Thank you taking questions.

Jeffrey Martin

Thanks lot, a Ryan.

Operator

question next from our go with take We'll Paul Associates. Glenrock Patterson Please ahead.

Paul Patterson

good Hi, morning.

Jeffrey Martin

Paul. Hi,

Paul Patterson

other Senate fee. least pretty wanted terms own at sounds guys you et your I opening cetera, netting in correct positioned A. potential that just like assessment? any on your to activity in Is comments, to that's ahead operations for on stuff, a comments being in netting basically are well the you So, perhaps provision parties, It touch wondering the about of perhaps opportunity there engage I'm then lowering is California. that? any assuming their And with correct B. in

Jeffrey Martin

so thoughts, give as that. a interesting SoCalGas has have for been trying XX%, in you you to close They've since very some you states our methane of the seen it's Yes, in questions, on XXXX, which XXXX. a emissions. very I'll target thank really materials them that and future couple raising or to that the for states well XXXX, about of down that got reduce horse, may above their for targets

if gas of are about making an So to I and energy globally. how transition gas, long-term have natural be fuels issue part of natural think economy gas the imported. this is fugitive going viability Paul, that of they about your here be a the improve energy But you handicap like going United an in kind the natural And operational And as business don't emissions, technology, will I sure without States security, innovation, being is the of a get base think role to the mix. we processes. new long-term we're energy has we not in don't

lead net-zero and carbon I business half California is there of a very large that that trading. do the be footprint, this built your because least part remember by And today, around be is their a goal second reducing of in decade So there'll area. no the And XXXX. in decade others and think of carbon over is at next assist interesting. can companies question number very the a kind question has there'll -

your to lower really be many will business that's emissions, basically important. ability will the I think the it, be case And offset So evaluating. credit get people that emissions for other

Paul Patterson

a say sort I thing. a Okay, sort week gas the great. of fuel passed an plan let's of with And and electrification sort of think of then carbon dealt request San this earlier anti-fossil Diego, that

and not guys how it may what you a of it mean wondering have you Just guys what to may - guys? or you think

Jeffrey Martin

go this natural be is, infrastructure certain but an about right. purchase and a made you thoughts. a a at company gas. And California, give is beautiful in fuel I'll Yes. whether comment earlier, One couple the thing that I we'll out we're of price electricity and

highly pass without We customers will that onto cost we run system the markup. a efficient really and

we're gas, decarbonizing whether selling is financial less natural we isn't gas issue really more in, believe What California. to or a us. So natural do

be we state agnostic leader So we it's also in to green will But or to green as be a over Paul, a time as electron we've made goal molecule. a electrification. believe, whether a

States, of we're parts at on SDG&E, in look precedent L.A. established So and rather Diego, the to there where a they'd and similar focus in San other both, electrification right.

if consumers. where city But natural you and worry think might about one aligned go of we're in are and What and Again the without increase in think gas advancing sure driving in capital cost investment have financial strongly I with impact you where wants for we're unique to reduce thing the new a making investment supporting So makers is that. California, up process us. we supportive this policy the we're in that's inadvertently projects benefit we're or capital that about or not or to services electrification. and people the business, the Mexico Louisiana from to look whether they our

we don't their tend try help we these way types So, issues, to to tend on find be a to of them goals. obstructionists to meet

Paul Patterson

great. good Thanks Have Okay, a so one. much.

Jeffrey Martin

Paul. Thank you,

Operator

question Craig Shere take We ahead. can from of go Tuohy. Please our now next

Craig Shere