Earnings call transcript Q1 2023

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Operator

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

Glen Donovan

Good morning, everyone. Quarter Call. First Sempra's to XXXX Earnings Welcome A are the available of this Investors slide presentation teleconference and on live webcast section. our website under

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

Securities may that those starting, be meaning today. statements any discussing Litigation SEC. like differ in projected are factors of The forward-looking that we Private the could company's materially Reform XX-Q the Actual with XXXX. statement materially remind most Before Act and in I'd our differ from discussed results results everyone XX-K we'll filed forward-looking within the to make to actual cause recent the of

in this share reconciliation GAAP non-GAAP refer our financial measures. the Please are that a diluted shown amounts a basis. discussing And measures. per Earnings to slides presentation certain call on for we'll accompany be presentation to

of today, not our forward-looking in contained XXXX. or assume statements X, We the March forward-looking also speak review in like does that to any the May that future. encourage important to this you quarter XX-Q of any ended the update only also for company the statements mention to And revise XX, XXXX. note to presentation obligation it's these I'd

hand X, over Slide to Jeff. call turn the to please and let that, me With

Jeffrey Martin

that report the today. for our of for advance future company We're X Thank objectives success. business accomplished we've excited us months you several and strategy the that significant joining position through to this year, first all

a to this for great off We're start year.

over growth the key will and time and your our at and reserve Justin we'll next of on and do growth EPS call, provide walk So you XXXX half platforms. guidance Trevor opportunities business to developments, through what I'd that business our today's end updates questions. for the decade for for us several is like After three And XXXX. achievements financial the

that's to now of review across an needed outcome and updated month business its constructive developments. equity to support base occur its service Turning XX.X%. existing a growth and strong last This spending layer rate for of to Oncor of completed the that's ROE its meet continuing provides capital with territory. expanded credit continuation ratings Oncor's strong X.X% the

Board and improving in view and ending roll-forward again new will capital also It's management $XX a which reliability. Just increasing Oncor additional on the that with important plan its met Oncor safety continue refresh X-year long-term the company's transmission, technology future capital in updated last $XX week, Oncor's system X-year need and billion. billion roughly from to to strong see demand to plan, to investments expect in for XXXX. reviewed distribution period the note continues the to make it toward we growth and increased capital their

end for I'm that milestone Infrastructure pleased of an It's value how of highlights positive is the like franchise Arthur Port decade. growth to Sempra with positioned continued that at through Next, LNG. the recent well I'd decision investment important platform that mention growing final the and the

its the successful decade execution end management help leadership of structure positioned and note of a about for respect double-digit is Their U.S. have capital area. will their that strong the capacity well clip would through that expect to alignment future of in with the I and LNG this team. us Infrastructure grow ConocoPhillips opportunities the and also extend as at a the bullish the for LNG Sempra offtake position U.S. lot project. in annually well creates We and participation we're

capital plan three proportionate this our only these Note, updated of Infrastructure, view Port $XX across ownership spending too, Oncor to newly the all and capital LNG. being of XXXX Sempra's a growth number developments billion. Sempra's Sempra share includes platforms, and capital that allocated Arthur With planned of new we're XXXX including to announcing

This celebrating Sempra's year, we're XXth anniversary.

Our that growing to average. on increasing And the and competitive North energy company's to our guides dividend to and strategy. continue mission over while that to per growth are long our of rates commitment aim leading XX,XXX term above at trend employees disciplined innovation, leadership the build provide a it's a company. sustainability America's investment also earnings industry share infrastructure We the

growth that we're for affirming our issuing plan today. also rate, of Together, updated XXXX $X.XX full guidance EPS and $X.XX to and our to EPS affirming year full our foundation our $X.XX $X.XX. range this adjusted we're annual capital of With solid compounded EPS provide backdrop, XXXX to guidance which projected range X% new X% a year guidance long-term

results. turn I'll more to provide business over the call plan in our Trevor and X-year and our Now of financial discuss capital detail summary a to

Trevor Mihalik

Thanks, Jeff.

to business. briefly each continue in X-year which, as plan, billion and approximately spending in We than billion capital higher mentioned, $X Jeff opportunities utilities previous plan. summarize $XX robust invest our a at see to the the is I'll resulting infrastructure expected businesses,

that sustainability demographic $XX billion affordability. capital include plan mitigation $XX.X reliability, state. At share the occurring priorities, state's proportionate is to the focus Oncor's of in safety, across Sempra a aligned plan. capital spending At Expected which their plan includes X-year billion California, Texas, the our on Sempra with billion economic response and wildfire is is $XX.X growth with and customer robust

upward plan the we likely in capital revised mentioned, Jeff expect be future. will this As

line this of is operating in utilities its debt billion our Port Sempra's our raising Infrastructure's $X.X with now Sempra At capital fund capital Arthur our of level. To structures. XX% growth, by authorized includes customary Infrastructure, cash share start Sempra at flows proportionate new Phase approach LNG to assuming X, reinvesting ownership plan financing regulated and targeted

equity where issuing common with various before of lowest sales capital. raised We This also financing the and equity asset debt our evaluate parent, asset the approach as at sales of solving we've of goal efficient convention, stake with other and the Port financing X. project-level is financing through equity past options, Phase all cost and and minority our LNG such Arthur consistent for

strong this deliver strong takeaways capital Overall, as opportunities of while to this of financial investments cost flexibility The across this decade. CFO to visibility is has time dividend, sourcing we the improved capture an sheet lowest key portfolio all maintain have exciting for the approach our of me to continue balance And capital is return for a strong growing Sempra. infrastructure providing that a support and performance. us to allowed and growth to through

to the turn Please next slide.

to positive increase in an the core X with our markets rate reflects macroeconomic average environments. over base our and is rate Over growth of growth years, dedicated to XX% attractive tailwinds This at regulatory X% the expected annual electric next infrastructure.

to capital I'll a with In the the SoCalGas accomplishments doing directed hydrogen recall state Beginning federal be partner its to Please than in the next its for Link funding. support which Angeles more other Texas' honored their plans. with to work DOE XXX account, so, speak to application application. also issued with memorandum SoCalGas this CPUC and entities and the is hub to SoCalGas, XXXX, where in California's turn the decision California's you'll updated slide, quarter to for Sempra Sempra that late

hubs consumers clean to accelerate infrastructure a a DOE, and energy clean are connected expected to its source. hydrogen as local network According to create of implementation producers, scalable

new forward critical advancing to infrastructure SoCalGas is fuels and the cleaner development application of benefit customers. looks excited to to state's for the support its the support of

That's top advancing to while several SDG&E has the working bills improve safety affordability will initiatives a proactively solutions is with closely Further, and customer its continuing been why that to we is affordability of overall priority. customer SDG&E services. enhance develop reduce reliability. to believe regulators

utilities First, two with it fixed is for broader the state. more rates to joint other affordable electrification intended electric make a filed redesign A is XXXX. support investor-owned in to the proposal early encourage across decision the expected include which state electricity in the charge, recently and proposed a to large

undergrounding additional effort, $XXX approval is from funding application infrastructure for advance DOE great nations million million that CPUC. a safety would a SDG&E federal for into subject federal customers. invest within tap territory. lines submitted in this seeking to announced of to SDG&E towards tribal strategic our hardening and to an power up how and an land in federally hardening overhead the more example working funds Exploring manner a matching to options cost-efficient it the service and reliability is SDG&E near Also, in to recognized support to $XXX of

further Further, several territory important the recently and transmission overall that reliability. included issued XX-year outlook, California projects in service SDG&E's draft grid support a renewable integration ISO would which

based approximately projects with estimated both meet reliability these identified plan, and The reliability process. on draft cost an subject needs bid are competitive consistent policy, policy the the be million of for billion projects estimated Within will to projects a and which objectives. $XXX state $X

state anticipated The loads be draft electrification this plan state to with to higher that the policies. Board needed CISO the We're their outlook by to accordance the is reviewed beginning be further see month. to later encouraged expected is in incorporate decarbonize will

at the rate of meeting customers. for expect general foundation to and future cases we the the SDG&E critical ongoing SoCalGas needs Additionally, establish

a of on Importantly, beginning are proposed reliability the goals. we alignment XXXX with rates in to schedule, of with centered second energy, California's quarter the and cleaner safely in Based delivering around our expect sustainability year. the decision filings current that retroactive

the the to resources electrification the mitigation for state-of-the-art wildfire execute advancing and transportation In utility integration is SDG&E plan, meantime, sector. and a distributed supporting storage continuing of

improvements on system infrastructure For the cleaner and integrity make while focused continuing SoCalGas, in and the his its Scott preparing are delivery fuels. of team the natural for to gas of safety

the slide. turn next Please to

that Oncor year. Texas. off I'm pleased the a Moving to to to Sempra to start report strong is

layer and mentioned, its X.X%. rate to Jeff for Oncor a XX.X% its received April, ROE order base final equity Oncor's review at which constructive As preserved in updated

in commission for service, record recognized events As track its that territory. its of of part service even reliability decision, occurred the Oncor of with weather have extreme excellent its the

Oncor in the capital through to has customers XXXX investments and making reliability through final plan regulatory regulatory of critical the support XXXX our benefits Having for bolstered its construct improved in view billion Texas X-year economy This toward state. the with $XX received in outcome confidence a the order, growth service. updated that

to commitment. period nearly deploying that nearly XXXX, committed time plan X.Xx commitment original the XXXX, anticipates billion to as regulatory X-year regulatory its investments, $XX of of same a Sempra's at the Oncor XXXX $X.X of for invested more Oncor reminder, the now its than Sempra's At billion X-year is end or XX% which Also, investment. its over billion part XXXX period And $XX from to had in as XXXX. agreement of we acquire

strong power; premise expected Oncor's are grid innovation reliability; which plan Increases and to primarily capital the resilience interconnections, to and related growth; generation technology on clean new advancements growing grid. renewables to and are support: and

You've market because a heard with that part, mechanisms us talk this Oncor lot its recovery lag capital from in the efficient the benefits it's of tracker attractiveness associated designed the limit to investments. are In about past.

even that of efficiency would that if SB of There DCRF is could improve for are Oncor's further. that deployment per and legislation regulatory would currently capital now of In Passage Oncor's provide one further two particular, pending support the under. capital. efficient reduce filings year lag the following bill we instead Oncor passed, operates XXXX,

in continued perspective, From increase Oncor last transmission same to March year. of retail growth XX% first the premises. had new robust and with Also, premise requests an interconnection quarter the XX,XXX a active at connected be time strong Oncor quarter, to where operational compared end the another in

next where Justin slide, turn to I on an over call the Infrastructure. to Sempra the will to update turn Please provide

Justin Bird

LNG where a of and first for Thanks, had quarter cleaner, across the need Trevor. for development. net-zero energy lines, more continued strong its accomplishments, secure strategic business strengthened Infrastructure Sempra future demand particularly has

to Coast, of critical developments amendment of transition is a the first, drives. gas several this approved I in March, in to speak development to stream The FERC the want we've highlight. Cameron On project. LNG moment. turbines had work completion But from the Gulf Arthur I'll X's positive to Phase electric Port to

in customers proposed this confident and expansion. attractive Given offered its by Asia, in we to remain upside opportunity Europe position to competitive deliver LNG the

under As that a volumes partners will of expect contracts. share will back-to-back reminder, its offtake of and take we Cameron SI their sell share

advance summer. later We feed competitive We've process been to the completion this process. continue the this of targeting

optimize approach disciplined we development, beyond extend construction and frame schedule time Cameron through reduce may expect process project take the the this process project would We to with risk, targeted Consistent to to and the cost construction partners financing. as the FID completing well after the our as project FEED COD.

way March. in project. X, debt the which financing closed agreements, of We reached advance Phase investment nonrecourse the final and LNG positive definitive At Arthur paves Port a we on decision executed to $X.X project equity billion

with to KKR We our transaction summer, pending target regulatory closing continue this approvals.

Phase common it's pleased us to expansion. in momentum facilities. SI Phase proposed on adverse note last citing expansion retained FERC, receive assessment well the sets X from development. The development important the the X on positive we And potential environmental step that to rights at work a up associated for the has continuing over development facility. And We're were another month, impact, no our and

support security transition. continuing Port Arthur with great energy this a flows, long-term execute was energy execute We're incremental a Phase to capturing investments view the and strategy, example world-class value strategic of identify to with approach creating LNG new to global contracted collaborating partners and our X to all of owners. cash of our opportunities with

interest capital project. plan. the ownership targeted on capital in Arthur including In $X X. project, LNG new share ownership is Sempra $XX the Sempra's expenditures XX% we're projected XX% Partners to our ownership billion proportionate approximately Sempra's at Port Infrastructure's Sempra target and Sempra Phase the of targeting its a Infrastructure included of in XX% Based XX% assuming billion capital have we in Infrastructure Partners plan,

As projects X, FID. we Phase opportunities not planning other our only a FID currently Cameron Phase convention taken yet. X Port or LNG therefore, include reminder, LNG Arthur our have does is to haven't plan that development include And where reached

Port appendix, Arthur outlined to The highlight I strategically Gillis Connector of opportunities X As Bcf gas now Louisiana feed would the pipeline hub. the Arthur in growth Port support the we're Pipeline. look including that you per supply day would for also robust the we've located from

by are people behind FID excited at Bechtel Please on With to turn led have start approximately Arthur us, Port construction site, Bechtel, XXX quickly to teams. already now teams, and There how the slide. you and including SI mobilized to next progress provide update the the I'm on first both construction.

daily. a already We're And with the complete. strong this storage almost the As for result, a a is on both firm two and and two areas eye the changing deep safety of for is doing stabilization. project. the LNG trains Clearing site community soil maintaining culture tanks all we've started support

to to slide, turn Please the Trevor turn Sempra's I'll it back over results. next discuss where to financial

Trevor Mihalik

Justin. Thanks,

quarter of XXXX million, $X.XX per Earlier $XXX to results. were this share. reported XXXX per adjusted per to XXXX basis, On morning, per compares quarter share. earnings an $XXX quarter $X.XX first our $X.XX million, earnings $XXX This share. quarter Turning earnings of we $XXX Sempra's compares earnings financial of first million, million, first first $X.XX GAAP or or to or This XXXX share. GAAP or

income expense $XX summarized last The the following. XXXX lower be to quarter compared first base lower higher from adjusted items, interest primarily earnings operating Sempra items flow-through at year and can expense next turn CPUC the at from operating lower slide. against Please benefits in from and income net variance netted million, same SDG&E offset period to CPUC by flow-through $XX and base of partially at primarily by primarily margin higher SoCalGas. and the the SDG&E FERC tax tax SoCalGas, at California, At margin SoCalGas SDG&E, at million

revenues from Texas, by consumption, lower and equity rate Sempra million interest due decreased expense, partially earnings, to from customer At higher higher $XX depreciation and growth. revenue lower O&M offset primarily expense, updates of

tax by lower business asset interest primarily Sempra offset interest the net $XX earnings, of Infrastructure, $XX optimization higher by lower offset million Infrastructure, income driven from LNG of than and benefit. a and of higher fees, sale partially expense in At Sempra more in Mexico, million diversion minority transportation higher by the earnings,

at benefit by primarily which partially items lower other includes supporting certain offset expense. driven on benefits, costs, interest net million tax and Sempra $XX of return And investments, income higher parent, nonqualified plans higher by

the Please slide. turn next to

demonstrated And We into a leading we businesses. businesses have long-term America. contracted some infrastructure a strategy regulated have in to attractive and capital to most T&D attractive North build identify markets ability deploy and clear consistent the in of

to We simplify model have three concerted also platforms. taken growth steps into business our

and us generate risk-adjusted periods. capital our And discipline allowed investment to this our and attractive over returns for has long-term short- shareholders improved

operational favorable continue an Now disciplined we're attractive and capital to financial our positioned updated compelling believe share and macroeconomic delivering and with plan execution, with paired well growth. we earnings tailwinds, dividend per

receiving at the be our delivered next a Oncor February, priorities, including: Please On continues that on months, slide. Texas And to key very base to a turn to our just outstanding call constructive quarter view fourth X commitment in earnings outlined we've rate construction our those review, the supporting resolving we at some items. new in our EPS capital at sets taking strong anchored range. growth Infrastructure; X-year project our development record additional Arthur, and beginning plan; billion, LNG Sempra $XX billion of regulatory Sempra at environment; by $XX announcing capital and a which XXXX Oncor's for issuing Port stage plan FID guidance

creating Infrastructure infrastructure As following: of X modern focused capital this to and in our we expanded capture which next middle constructive continue our on plan; our the reliability X-year executing in development capital on other building year, investments by commitment, incremental pipeline large-scale for of for a deliver ongoing energy look by new while shareholders and networks and to strategy continuing To from the our of record our LNG ahead, receiving years rate projects. customers. California our opportunities safety, sustainability; at on underpinned supporting outcome pave of the on will growing we Sempra we're next cases way the value prioritize

in confidence of this our through create visibility in before, value strong about provides gives areas shareholders attractive in our to the our with these decade. talked ability future coupled and, for position growth us delivering meaningful enhanced end I've As markets, this highly to

now questions. we your the stop concludes line open take our prepared to that, With remarks. and this will And

Operator

first Shar will our And from Instructions]. come Guggenheim. question [Operator Pourreza from

Shahriar Pourreza

Just couple quick of ones a here.

legislation in any 'XX to any especially et filings 'XX cetera? would are a on this outcomes numbers? or items Just reduce we've framework, implement you adjust advances, resiliency -- in And the legislators, you your reflect and how any guess, plans or including build as quickly planning Texas ROE from of seek seen changes to I that lag

Jeffrey Martin

Shar. you, Thank

stick together to we in same well plan. The as plan a Our would And I XXXX been put say, those a approach update basically contemplates Street as would outcomes of the independent It has XXXX number have we of now. outcomes. to on a Texas,

Shahriar Pourreza

is But that. in to numbers, the wanted so the legislation I Texas Got not just it. confirm

Jeffrey Martin

Our to to want the we that current expectation, plan. the were currently constructive some the and to outcomes. going and don't we're is do -- we it benefit, DCRF the front-run legislature, expect And within we pass, is get if in range that

Shahriar Pourreza

seem 'XX, just Okay. rate, cost FID And guys I contributions and as Arthur trips, that have and missing? Got 'XX on plan drags tailwinds in in there in from ECA should rate then run projects, than reaching and X% a I capital Are reaching and risks you base Port we it. COD to earnings over tail on we lot X% full the are what 'XX guess, of X-year guess, more other X%. your growth rates thinking to start growth about? you be

Jeffrey Martin

question. a it's Yes, great

you about growth time the things of to expect One is growth your much your over we've internally capital over time. earnings track pretty talked would

comments make X% two other would I X% take opportunity, lot we of Shar, of to So here. to that confidence a range. that's in actually the one But have reasons the

future one of of that oftentimes our a should results good indicator we financial things our the tell are be our past performance. First, investors

we've conversation and XX-year XX- this we've been earnings our per grow just grow recently, But I the to X-year XX%. rates and I in at the think had at share and more X% growth to that recall of rates over consistently to you over even past periods, X%. of period, earnings the roughly our been you'll share an able annual before. per have able And rate

really be on to over we reaffirmed growth of to rate. growing very type EPS the or forecast. start truly It's when the X% point, clear. our X% have long particularly forward, you a And always of end We're as and your business to So through quarter-by-quarter focused, not I've you the out, term wanted the point decade. year-over-year looking

the today's us would that $XX the So that the the end opportunities tell from through And high our of I all as our the in makes that in capital would of plan think perspective is and of more disappointed even outlined of front given from you many CEO, announcement billion them, be takeaway we call confident if you the long-term us, of decade, exceed I I range. end a my forecast. are didn't

Shahriar Pourreza

was get to at. I what trying congrats and Very That's the clear Perfect. on execution cut, seriously.

Jeffrey Martin

appreciate We Shar. Thanks, it.

Operator

Steve from Our next Research. Wolfe question Fleishman comes from

Steven Fleishman

questions. of Yes, a couple

the the So guide. just your that like plan you could what's 'XX just guess, And you some in to the the additional funding it to there's Could for driving appendix talk shares specifically, talk like? that higher I CapEx? in and looks

Jeffrey Martin

be us Sure, take to. maybe, of give We've back and glad I'd could got step financing us. Trevor Trevor, plan. And with the an a you overview

Trevor Mihalik

I'd to. Yes, sure, be Jeff. happy

their back stable take of last strengthen sheet steps kind if on of businesses outlook. really credit summary and slide our taken And you the include have appendix you of X and years, we look each did we a the carrying in a metrics. balance the of credit Steve, the to deck over our So

But order source how as lowest the at these you loading cost capital efficient of when an part also to that look seeing process, of businesses. we've fund we developed

And So occurs basis. recycled we've taken process And into to concrete assets. first, investments. really we've on non-core routine then steps then and the new sell simplify business that to that a

just we Secondly, good would with debt over equity And we Port billion third-party equity. of example $XX Steve, and debt at project where be did of evaluate the that that recently Arthur circled and about a do announcement, what at we level.

companies. at And which them with we've KKR of $X allowed ADIA bringing in by capital had success And raise there, us over SI, our then third, do us saw you to has structure the also and raising billion. into that efficiently capital operating

the debt level raise parent that's we equity our of in and finally, if always interest best we at And shareholders. determine can the then

focused to plan And about us. financing excited always bottom we're so of shareholders. line And is front pretty is growth that in most our we're that's on beneficial this capital

Steven Fleishman

Okay. ATM No, plan of the or or... specifically But count that share goes helpful. something that's for really like just Is the some up. kind just 'XX, to an

Trevor Mihalik

I the got think employee are we've plan benefit in -- that that, shares No, for plans that's other the of some things and like just so...

Steven Fleishman

-- Got it's And like. That's All Port I XXXX, very -- within it it's in I year not is plan it. -- the so is Or just trained your it for stake in until know showing helpful. year? Okay. come then year, like the up you're whole of is right. Arthur, on not yet? that first mean, the it is the does But XX% and not the later the in really last

Jeffrey Martin

Steve, X about in material coming number. It the have comes would Yes, online is thought be XXXX train way you X XXXX a with on the in it train XXXX. impact would online it, -- not

Steven Fleishman

Right.

seeing really without [indiscernible] at growth this Arthur? Port seeing still the we're So

Jeffrey Martin

you're And to of the Port absolutely would -- XXXX. X correct. way the run And for rate be full would think correct. That's way that Arthur the would Phase that about be about in be think to

Steven Fleishman

it. Got

Okay, that's helpful.

Operator

question America. Dumoulin-Smith from next Bank of come Our from Julien will

Julien Dumoulin-Smith

Or in was that? 'XX maybe earnings just if years? gave growth to me X% up do X% we obviously, expect done. as of on here. higher you LNG maybe Should contributions, growth little growth think 'XX us we the should let outlook potential a And less can pick here, X% on to refresh you range, given with to later-dated expect X% lumpiness be perhaps improvement you the than than certain a this How nicely to about expand say, that, Look, be guys 'XX? you maybe

Jeffrey Martin

Yes, appreciate it.

was we The to making you that be about in two think XXXX years in our the quarters is terms of in needed California. don't It necessarily. was or the comments that's rate largely of respond to cases of things. driven will it issue outcome I One earlier big

a rate And will case included mailed know, a of have half of outcome, XXXX. year. set still a reasonable a rate in put you on the thing year a convention But out is big to have ECA they your expectations I'd guidance that don't attention people lot And We've for when case that ECA the COD expected kind pending. we're second impact with Phase XXXX. of Julien, summer X to for call or as a of forecasting

Julien Dumoulin-Smith

the of seeing on bit, Actually, plan. cryptically front, you et Yes, if elaborate of be Cameron, commented a a you little can to you the perhaps labor, a LNG get Right. able a little bit little timeline in talk the pieces on cetera, you're bit. reevaluating what inflationary lot different on little Can moving projects these about some a to done?

curious Maybe that bit to a Cameron. not extending the the any think timeline updated with that. been but if related there's opinions as I of related, on optimize DOE have challenges you here to I'm an know then you some little And on timelines. Perhaps entirely related,

Jeffrey Martin

Sure.

me come start And inflationary I'll the you're with some LNG projects talking back think, that of question. I about. to shift, Let and timing policy your the

first. your take question second I'll So

States and energy support country's United about that recall, the EU their with security. to constructive. Julien, You'll be for announcements United our series and economic the that made found last of very the We Kingdom year, a

forward was the at climate And more and updated U.S. the for energy GX recently, where meeting, and of global goals. that the security came importance LNG affirmed

and on the of is to derisked actively the track projects statements assessment highlights initial X Port value both significant recently. So was behalf United of the certainly moving ECA Arthur. that in Phase out those We're of under But more constructive putting continuing they've the I construction it here or made are our statements DOE like think States. forward,

probably projects it are not discourages that And progressing. materially

coalesce standard. and market projects, likelihood experience that sector, the the well projects And being have relative positioned around tend particular, a our are to based higher So that in our on continue the regulators confidence have we to successful. to of in that

timelines, there's of issue and expense interest industry. inflation whole no the issues and question chain On that supply impacting the are

just about future But You see on right LNG movement the some COD it would also Maybe update side. projects. in in to Justin thinking dates of be might any X. helpful two we now, of Julien's we're do to But thought a for expansion to our in Phase expect terms around I that excitement things. likewise provide you're don't happening how be about interest Port Cameron the talk seeing but short on benefit Arthur

Justin Bird

Yes. Thanks, Jeff.

with start me Cameron X. Phase Let

of I project. and advance the And importantly, lot this think partners Julien, there's at Cameron. around So to continue the we expansion a excitement

As fully approval now project. and FERC's we a have our we received of amendment noted, permitted

their our will expect -- we sell the side, on share offtake the take share basis. Cameron share. before, partners as back-to-back of we a said will On volumes And we've

competitive does process advance. The FEED to continue

the the extend FEED upfront clarify to we And think that and commercial it. committed great I on little continue accelerate project see an overall if thus expected be risk say very we're we a forth. guess, project. competitive would we willing think and cost, basis, bring would same a willing and bit are the more I this I'd partners it's a flows, the process. start the at to importantly, priority we the would advance statement my spend reducing and of most to the time be We to and It's project. opportunity to, while partners cash the way is time, I operations

We in X the in of would success, start. scale say significant say, terms already seeing Gulf Phase that Coast. the I FID. successful talked in X, Arthur will we're would which had strong expansion, we've a on Phase about Port create I building interest And

would excitement the So Phase we But work once on basically on and We're we're continuing And move three business work the construction. those Port lots forward are permitting I have wrapped in and marketing. phase. general. of to and financing then to around say up Arthur commercial X we'll arrangements, continuing to

Jeffrey Martin

to comment Washington. from were issues Phase I well, would about we for Phase helpful you talking as X. coalesce been projects forward, policy X I the like made going add it's it this to When really see interest Julien,

So of time. really drawing Phase we're at I that's think X for is market thing interest a the lot really this interesting

Operator

from Chopra come will Durgesh question next Our Evercore ISI. from

Durgesh Chopra

went XXXX at Is you through advance us. could case plan, the XXXX. consolidated Trevor, that If the clarification, plan? were you plan clear to on as just your see level appreciate is sources I quick no front, responding Or one equity Steve's have no of could in that equity? equity I for through capital Just we that former that Sempra XXXX, through through question. different financing through you the the of sort the And clarify equity still just hopefully. there's you the very

Jeffrey Martin

some And are to think that is of the take the use kind really stories. as cost Durgesh, Yes. loading way stories, income-based equity And Durgesh, you have strong are the that. of order spoke I'll be to glad this source mean, in lowest we of markets, I about I to companies growth issue equity some capital. it, right, Trevor

leading I do think and one the the being as what we've space income of in utility tried stake growth is position a to out stories.

of record the So a got think our I competitive interest financing. more $X efficient options well in continue around today capital track when with and our attract higher story the corporate you We've yields, to positioned billion. just very, rates about We've today. raised all being think we're very plan investor to our

got because prior that loading to through was And order to same in where what is, dynamic, And thought solve plan. the And now might going we're issue for no go Trevor need our XXXX or we smaller. a very it's referencing what you and described robust we've where I right? XXXX were we You're going years, we there think plan we're equity. scenario telling was

issues changing Texas got You've in the legislation. in

And But see Arthur now, right cost we're of our the most drives doing plan. owners. currently values track plan now, You've got situation it, lowest a what this lens really capital. Phase dynamic to execute as capital of a is X the in And good through got and where expansion sourcing the Cameron to got we record a not Port we've of we've of the on.

that's think best the to I your respond way question. to

Durgesh Chopra

That makes clarification. a ton sense. I appreciate that of

Operator

time have for we more And question. one

question from Tonet from last Securities. will Our JPMorgan Jeremy come

Jeremy Tonet

on of these net-zero just could there interest Just for that wondering the updated the far you if as have VI customer passage post And gets pivot about wanted to in CCS, you talked what towards if of you potential services. solution zero as IRA, -- side as Louisiana wells wondering in Class kind from primacy thoughts solutions, update SIP. before, us

Jeffrey Martin

to net-zero of important some administration of one the of One $X that is I'll it relating I'll to some Yes. mention, at we're provide solutions that and Justin pass looking I projects to was for Two billion the bills Biden formation things earmarks earlier $X business. overview is the which the infrastructure overlooked most billion of passed oftentimes the really is bill, think hubs. or something hydrogen

of California. both promoting a our also Texas Basin, hubs. opportunity the We've in in excitement an hydrogen are here utilities that's prepared That's in for a big and L.A. particularly, something talked And remarks. of part Trevor's that about as lot got

the see utilities. that's from where think I you're to expect So SI to outside going business, something of leadership Sempra's

going more service system. at Relative the of and talked are incent there come wind a one, on expansion to solar That growth of it's the as to basically extending number things territory. to they in meet on SI that helpful. of in are calls for transmission to to about and what there both we really their look Number needs Oncor distribution IRA the bill,

about to also sequestration plans progress could Sempra underground maybe, at it talk green does carbon looking some But our development that we're you storage the us on a of lot of hydrogen in some also that of Justin, terms for fuel And you're infrastructure. the side. and opportunities the making and help in

Justin Bird

let bit Jeremy, do. will Yes, by a start talking little me carbon Hackberry storage. about

facilities, located really and is mentioned, for initiative And GHG own energy Jeff in in The pursuing industrial our actively Louisiana. foundational to Hackberry, we LNG net-zero solutions Hackberry. is facilities. emission as development. So enable goals are This including it's

Cameron in sequester Southwest potentially And dioxide industrial to carbon permanently facilities other and the Texas. joint LNG Southwest intended from venture it Louisiana was and basically

with an EPA with about Louisiana As we with application a LNG you announced we And agreement for participation is Class primacy. mentioned, working have VI. filed partners. EPA have our Cameron

And capture Port The this We're ton sequestration IRA facility. carbon at important. will also ton developing to $XX is support looking around the per Arthur look, and project. potentially per $XX

but not of region. those facilities the we our just of carbon own some to So output reduce industrial opportunities there's think potentially facilities expand in that other to

I'll and a be hub, looking hydrogen at of we're early-stage lot so On efforts. brief,

with in around applications Gulf Christi, and the is been separate another Port DOE. We that in encouraged the and Louisiana. the filed Corpus are One in hubs and have Texas others participating have of three

as one that of will looking are we think many fuel future. clean we So molecules the opportunities for the support to hydrogen

Jeremy Tonet

very kind helpful. And it. Got of... just That's

Jeffrey Martin

Go ahead.

Jeremy Tonet

Unless another you had anything else to pivot add there, question. I to was just to going

Jeffrey Martin

to ahead question. go please the No, next

Jeremy Tonet

I anything work here California unique California? pipping the about other service story IOUs? about And And affordability is here, towards we your that was income-based relative thinking be how influence should California might efforts just there SDG&E's in electric charges around to

Jeffrey Martin

I we're we moderate Part have the think two other relative investor-owned more we from obviously, currently of don't we've so. President I got bills program utilities. kind that pass -- is a Group going I climate. to benefit three-part lowest state But just that I'm the of address in to And this mean, in would the second. He's a pursuing. Kevin California. to it currently for our to

will a impacts you of consumers. you thing important X- affordability or I seen customers that I the one cost successful team. doesn't our most the of increase. impact has businesses, X-year we're tough living just that we've where This top management to it But I would Inflation tell is mind And our is when for been tell remember, period, succeeding. think are

looking our services. better hard we that to part bat the low maintain demonstrate them our need improve is we're we're affordability day to of for going to how every for ways social So working community our of compact with to and and local new and cost

three-pronged some on lot a think we you affordability. underway. kind about work the that be to of attack we pretty But I more done. summarize could have the There's programs Kevin, of excited have we're perhaps

Kevin Sagara

parties customers than cost Yes. around reform. for a our control, you Yes, focused that, attack, and rate definitely Jeff. Thank really from it's three-pronged other obtaining funding

effort, the You fixed charge mentioned Jeremy.

O&M continue controlling by various automating on the to business improving costs we efficiencies. need to front, and and be gain processes to efficiency laser-focused On streamlining

digitizing our where example for technology culture to would our A lower savings of And the significantly premiums. this mitigation wildfire embracing directly good translates in includes insurance customers translates program be everything. our of industry-leading how area, to

can from infrastructure of customers, more customers, in his like of seek programs and outside a use federal bill. funding remarks. of A of investment advocating programs years. We spread certain our as would second the like infrastructure of this tool outside around focus mentioned sourcing funds Trevor our to bill, the and the cost for other funds be tax credits sources securitization over under some

open customer affordable more third purpose for the be the advocating area program general bills would currently removing CPUC state's predictable, this at reform which is be the and proceeding and of equitable. our bills for public Examples from charge for focus would into pushing rate fund. And and our the an meaningful fixed there make the to charges of

need So currently affordability. we laser-focused on a work And streams always we of to be have underway. number

Jeffrey Martin

lowering the transportation. in this that particularly thing the charge see the higher add, a rate moving it against competitive fuels toward And to the really that get think fixed too, by you electrification, what benefit space. would levels only to in is Yes, this charge, of it issue, Jeremy, I around it wants transportation of the has more fixed for is transition the a to electricity. particularly I referenced, affordability you makes state And

are a which in where California think have programs supporting and I is place got intended you've taking And make but competitive. cost consumers electricity several there, to in variety limit we electrification. also more of So strongly Texas Sempra things to here

Operator

back time, additional That concludes session. today's conference At any Martin to Jeff turn like this closing for question-and-answer remarks. I'd the to

Jeffrey Martin

like I'd for lot of got by competing of just Sure. we've know close a this morning. a other everyone joining to through lot calls I thanking today. feedback

the any team to the our time to taking with questions. items, join our please Per follow-up additional Relations Investor call. out there any to everyone take time are custom, appreciate reach if we So

concludes our call. this So

Operator

Thank you your for participation.

You may now disconnect.

Sempra (SRE) 4 May 232023 Q1 Earnings call transcript