SRE - Earnings call transcript Q2 2023

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Operator

Good day, and welcome to Sempra's Second 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, and welcome to Sempra's Second Quarter 2023 Earnings Call. this under slide section. our of on are webcast website our Events live teleconference presentation and available A and Presentations

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

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

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

to you June XX, for review XXXX. encourage also the We XX-Q our quarter ended

These financial form morning. Please full year a this XXX% and share earnings the that results. announce will amounts the announced our per split when note we earlier in of quarter these X-for-X stock that do be XXXX not stock third reflect we updated dividend amounts

future. XXXX, the does any to that, and obligation update Jeff. please hand only to presentation X, let statements forward-looking to not assume the me contained forward-looking note of turn call With revise that that this company also I'd mention the important like or these today, in X, over August it's to statements Slide speak any of to and the in

Jeffery Martin

XXth its Sempra today. anniversary. for Earlier joining celebrated Thank this us you all summer,

to XXXXs. While the strong Gas operational bettering with that late the time, Electric routes company in others, to commitment date we've energy a and delivering San XXXX, our at communities. Over our was founded and purpose Diego back serving & SoCalGas embraced

have we to energy forward believe increasingly the what years, our the modernize markets we're next expand in to are And attractive most affordable located so platforms America. can we growth in our North deliver and X front to the in about we that and really Today, us of premium looking reliable energy network XX opportunities clean, customers. excited

Today, corporate unlock sustainable XXth report, mitigate billion business as This includes record in plan, and equity capital. risk high-quality $XX recall, capital our ability executing continue we Sempra's on confident proportionate help multiple delivering year, and shareholders. our has also to only emphasizing how we're the Sempra our we X-year growth story, practices you'll growth sustainability share and income and our earnings dividend supporting published tailwinds new our which, opportunities of continue our to

XXXX adjusted second per XXXX year-to-date per of of That this earnings to me the we Earlier brings quarter $X.XX quarter. adjusted morning, share $X.XX. earnings share reported and back

projected XXXX and results our the we're long-term strength the of to the across on rate X% the and our As X%. half XXXX in growth ranges we of year, first both guidance And based and call company's EPS discussed affirm XXXX you'll to quarter of XXXX recall, our guidance first May. on pleased our

results third reported and not quarter, X-for-X count. impact the distribution split financial our our The future approved Also, in just results split will does on second the yesterday, date note post-split Sempra's quarter, historical but August that important the for Board XX. it's stock reflect share to a with the

S&P the we've last For highest the years, XXX had stock in of prices several Utility one the Index.

it America's believe join will energy be we for North the and with on to infrastructure investors a us of trading increase to mission more split, volume premier broader our our So accessibility company. group provide planned

energy also is had Please simplifying billion roughly or with turn we value began And a the modest $X base to relatively the scale in Today, billion and size we the distribution its assets. and while transmission we've Sempra's last overall billion. we successful XXXX, of of of over of model. higher-value, rate what transforming our investment rate business lower-risk $XX on slide. believe When and an assets $XX base next across focus been portion Sempra X.X own journey decades, of the the portfolio in chain

Sempra's of region. tier economic the markets I'd in businesses that also located contiguous North really America benefit and growth across southwestern are note strong in the from

focuses facing legacy strategy generation facilities. direct on are volatility that contracted investing decoupled Our while utilities avoiding uncertainties regulated commodities infrastructure long-term commodity the with energy in exposure and and associated from the

backbone In North energy move efficiently to of proposition from other helping and our on words, core investing transmission customers. focuses America distribution the in and to producers value

our capital. return competitive T&D the benefit regulatory with of equity timely investments Finally, from constructive and on utility mechanisms returns

underpinned long-term expected flows. recurring steady world-class business cash is with provide Infrastructure's contracts by to Sempra are counterparties that

continue Taken platforms earnings energy infrastructure North aligned building in America. out overall with X high-quality, visibility our our which mission provide together, long-term great company the growth to is to premier

our the where to through you Trevor financial walk both and results. slide, next business Please will turn

Trevor Mihalik

Jeff. Thanks,

business half which the the results, we the year, our of of highlight As we're with pleased first model. financial strength close our

much more SoCalGas. of parent to and how larger us exciting For the allowed background, via SDG&E formed company was the of that and build foundation successful time. has merger companies see And over it's Sempra to a

our leading California a nearly with million Sempra of and position serve XX within $XX consumers. billion base rate platform have we Today,

load to and growth. Since trend switching of is of expansion seeing more growth economic XXXX, and As significant X%. electrification activity of business increase, has load result continues the SDG&E experienced to we're consumer This approximately the electricity.

the port are approved the all-electric San electrification first expecting an as of Diego first of opposed to kind emissions. North unveiled cruise enabling into all-electric operations. plug receive which project, San also Port further to the cranes, tugboat ships The the America. the of at while of grid unveiled example, Port support arrival emission to engines, their be diesel For is thereby their Diego reducing recently berth their to running across also reductions The X significantly to in

these As opportunities trends investment decarbonization in infrastructure continue, we see the continued for support to region. increased in

EVs to year. electric the as service and nation Another ongoing an is great of its over vehicles, territory compared almost example the in the increase first of is last now leading California electrification transportation. SDG&E XXX,XXX XX% has quarter, in of

us set have XXX employees in goal leaders electric report to also employees means an internal we increased Sempra, vehicles our have the first to electrification. At our this we one load We're been Southern Back a transportation. have making using milestone. recently in exceeded primary expect in the to reach companies this And as growth electrification to X,XXX-employee as we that pleased California increases, promoting of in service XXXX, adoption drive of and mark, customer territory.

complex conventional great clean to Further, modernization commissioning energy of and significant maintain while reliance with another increasingly on energy gas-fired utilizing is store of assets of safety to required XXX is and technology reliability. storage utility-owned example dispatch grid, plants. an megawatts reducing power SDG&E's recent

development the SDG&E SDG&E an a energy of and projects meet process projects. its May, XXXX billion California $XXX reliability initiated approved $X territory. To with help estimated comprehensive million June, can located CAISO goals, Also, new awarding CAISO clean over of to XXXX within transmission ensure in additional bidding in service plan

SDG&E record we mitigation assets long Sempra, the believe of success also North our of track operators here and At is and well The the certainly favorably. operating a wildfire compete inform will of leadership transmission quality largest of America, in in company one competitive California, we're in our nature we and owners Southern bid. positioned to credibility and believe and has

from now of Texas. to June, in in Diego more electricity Oncor sources announced the cleaner SDG&E's third-party of efficiently energy their or grid on customers are refer with focusing energy like consistent County model, to Also customers much providers. what strategy an XX% delivery to of is San as SDG&E we receiving modernizing move narrowly This supplies that

value for Turning electric the potential to resource released of generation. Clean Results the dispatchable company plan The The delivered firm, affordably the energy cleaner networks help to to contemplates electrification SoCalGas. fuels analysis, levels clean, and and expanded benefits reliability can SoCalGas' also highlight hydrogen increased and safely be Fuels how report support potentially decarbonization. new diversity and indicating account of and an need of generation. through existing

in a biosynthetic X% natural Procurement request new of of biomethane gas. California's connection RNG issued In the for SB XXXX, of Standard, XXXX, SoCalGas At new for and, of expected in proposal gas supply known the the form and/or with end adoption turn, represented RNG recently in Renewable procurement core as Gas its through deliveries mandated meet of RNG SoCalGas to customer SB at is XX% deliveries the by in state and SoCalGas, XXXX XXXX. help RNG core support goal the

a prime of safe is using state to existing its and SoCalGas manner. energy This example help is affordable a in the decarbonize network how

GRCs Finally, our California well are underway.

energy those decarbonization reliably and centered cleaner around are with in safely goals. delivering alignment and application California's Our in cases

Recently, in next hearings with manner. SDG&E and and to and a scheduled interveners the SoCalGas participated to constructive which filed in are submitted evidentiary be key process mid-August. briefs, is The advance opening milestone continues in regulatory updated testimony,

beginning in with to of second the continue to decision proposed year. expect quarter XXXX, the retroactive We a rates that of

next slide. the Please turn to

that first customers while Texas. challenging grid challenging with currently to to some want dedicated they Turning external acknowledge the are commitment excellence. of each the enduring to also maintaining Oncor's force this driving service heat under across performance are innovative the and day recognizing employees despite factors, state excessive go and the work strong electric reliable I of the the to conditions.

billion minimum acquired of in a support base had billion regulatory $XX $XX rate same same we X that years That and $X.X it nearly $XX just of as commitment made end doubled billion its to ago, to a and Oncor Sempra be spend over capital nearly over rate base, X-year plan. When XX% has XXXX. to capital billion the Oncor grew of period,

years, lines. and substantially, added has the of Over Oncor's X miles grown system X,XXX having past transmission approximately distribution

year, roll Oncor XXXX continued capital to Earlier anticipate recent the increased growth the forward we XXXX now certainly With plan when X-year and to economic capital positive upside new $XX this we strong billion. plan. its legislation,

capital investments. the long have how We Texas talked drive and to additional macroeconomic it incredible growth continues about in

Metroplex also customer the Worth new of increase put over ERCOT demand. And the base it's Dallas-Fort X XX% in this larger Since there states. To than into population X been demand. for has a years, records that XX a peak peak has set Oncor's ERCOT's noteworthy June year, alone perspective, past

months. to $XX begun roughly billion XX build-out demand the and example of infrastructure expected large of past cities this the in demand of customer and both manufacturing new manufacturing is construction significant sites Specifically grow. that C&I drive A These great communities. require are continues the for chip Oncor, have surrounding C&I and the the demand residential Sherman facilities of Taylor over to electrical incremental in

also to attracting additional growth that want the Please provide we value a update Finally, could and slide. customers for the of its Oncor by resiliency turn to outcomes positive and long-term add significant legislative an next needs. series on state's to capital meet

enhanced the utilities economic positions one regulated investment recently Several enacted country. utilities We in that with support are provide as regulatory to an ROE improved and incredible bills premier in growth. improve to regulatory for recovery mechanisms Oncor reduce bills coupled T&D and the legislation, the that believe of additional story, were Texas, facilitate Together, are these expected designed growth lag. realized to Texas'

lag distribution a the this Starting for to tracker year transmission now only investments, is should as once. more markets demand with distribution SB flows a manner. regulatory improve to capital a capital able and to investments opposed deployment. file critical existing rapid timely regulatory like mechanism XXXX, Similar This both reduce Oncor Texas, is and is requiring experiencing reflect Oncor's in earnings which in cash should and increased twice

of Of commission-approved more to XXXX. a a Moving bill mechanism to utilities to note, This investments. regulatory disruptions. harden provides and bill distribution make file designed resiliency HB potential to for resilient transmission systems the separate and to allow is recovery plan its

currently by lines is expect which end specify and we new time The be future lay expansion the year. transmission completed applications actual implementation. XX the from XXXX, X the to months. needs months the CCN the to implementation, rulemaking out will the drafting procedural time to of filings The Efficiency the Bill, address SB rules between PUCT rate actual and grids' approve to by steps helps shortening Permitting

Together, provide PUCT Finally, these to for and XXXX constructive to including incremental HB growth. Permian the projects and high-growth support areas opportunities Oncor's Oncor. electrification investment directs efforts serve and enhance system to could develop for plans ERCOT Basin, ability of serve legislative in transmission the the customers better Texas, outcomes

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

Justin Bird

was to development Thank energy and ago X and you, of operating years infrastructure decades business a formed Sempra under together expertise Infrastructure Trevor. streamline bring single our platform.

Our growth of create increased opportunities, capture synergies North markets. American support portfolio energy to new positions us scale the and

of as are us which key opportunities: a give these U.S. trend. long-term all trends of reshoring America, the reshoring security; North and X manufacturing strong and There of of continues a that Mexico decarbonization; support result confidence between our business. Trade energy to grow the to growth profile in

manufacturers capital the flowed For more last example, billion identified in Mexico that a $X than recent Reuters months. of from article X has overseas into

partner U.S. of recently, to And surpassed Mexico trading the largest the Canada become

energy are positive More we to North clean as received our across and a Given approvals our regulatory trade in growing assets American support in our Mexico, player with cross-border we energy infrastructure, Mexico. positioned power several number networks of a including position segments. well leading in recently,

projects to under Moving construction.

XX teams worked Our been without over million busy have hours a incident. accumulated lost-time with

over of Train in XXXX as continues finally, of in come second X is XXXX, targeting XX, online the and with and summer expansion and ECA to the X COD of advancing also target We projects GRO time, And operations Phase and expect 'XX commercial these half respectively. Arthur will X respectively. Train expected Port and

selected process move stage Turning to Bechtel forward we We're work. at a the feed complete to competitive LNG remaining to X. the have Cameron where development Phase at in

additional are invest aligned costs. upfront project to time We risks and our partners reduce to with construction

satisfactorily We work, FEED regulatory us project the the after expect this fall, to next through process to and additional continue any positioning securing finalizing year take financing approvals. FID required

a in to and project. Also, of Bechtel development Arthur Arthur LNG did pleased X by cost strategy Phase Chairman comments significant we the to we're are of infrastructure is recent what risk and energy LNG another reduce a for support encouraged made and implementing marketing with overall particularly to are selection deliver at needed at reliability. FERC and we Port The by projects the similar milestone Port world-class

of ownership that Infrastructure we the stake Arthur to XX% Sempra will within the Port at XX%, Looking X expecting previously ahead, KKR range to we're quarter. This also in target project-level XX%. and transaction LNG expect Partners is third finalize its the in Phase shared with close

proportionate the on be economics Sempra future to to as common project, Infrastructure's Partners anticipated estimated updated of Infrastructure this approximately requirement EBITDA $X.XX Based which forecast is for right Sempra payments $XXX be phases. equity ownership facility upside excludes to share billion, from and million, certain is its such

annum tonnes next Port XX under X Infrastructure's is already to the to At energy Sempra Please total the expertise operational expected Arthur. capabilities. Sempra turn a showcases With of of that capacity. its Phase value enhance per and flagship to we're leverage the portfolio value slide. Infrastructure developing integrated that world-class double million development can hub Port across Arthur, construction,

the an segments development footprint. region. of developing of a the Louisiana our to of infrastructure Arthur portfolio supports capture This the Carbon comprehensive Arthur Connector storage Further, proposed business by from growth approach hydrogen economics capabilities Port and help energy project we're Port Sequestration Titan integrated the early-stage us in is facility facilities, our gas larger sustained piece expected the pipeline, and the leveraging

certain FERC X, X.X our Arthur would enable worked request, incident. a more Bechtel that you with of to Phase Port likely activities, provides tasks optimization material at At expand as to aware construction construction safety Many well of are such schedules which on lost-time underway, hours be without million allows XX-hour to next-day night, shifts, work than is preparation. completed and better deliveries and recent focusing site this for include and for staffing

improve will it's We perspective. it beneficial also from believe streamline so situation our a and schedules, workflows mutually

With slide, where that, financial results. Trevor to turn please the Sempra's will discuss next

Trevor Mihalik

Justin. Thanks,

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

XXXX next offset at the interest CPUC CPUC items higher The and on margin certain the under quarter period earned SDG&E of base earnings income amounts compared higher at to incentive interest of following. mechanisms same higher turn benefits $XX Please slide. California, second be adjusted on and $XX million earned in CPUC partially Sempra summarized to SoCalGas, flow-through regulatory variance higher tax and by the higher by operating year can net balances the last regulatory expense. million At net

and growth. attributable At minority rates Sempra weather-driven Partners equity a $XX million by base Texas, consumption, of including At to XX% new sale NCI, earnings in lower million offset Infrastructure, Infrastructure ADIA development to higher expenses interest of earnings from Sempra $XX customer higher the higher of lower and and Sempra expense.

net was partially of Parent generation Sempra and lower by fees, a from primarily million increased net TdM offset lower higher $XX by transportation tax primarily benefits lower from revenues, offset $XX there This partially maintenance. of higher costs, Other, at and partially scheduled earnings, equity diversion investment asset primarily lower from major expense, interest driven gains. and tariffs, LNG offset At by optimization million by were

to turn Please slide. the next

financial years, of capital of and repurchases. utility significant in American return at trends. earnings overseeing stewardship, growth XX Southern to way, Along form step a intersection Over company to positioned from growth energy strong the Sempra transformed each owners the of California leading macroeconomic the and share we've has is multiple North and dividends regional past a exhibited infrastructure meaningful the

our platforms. constructive start on rate record and a our year critical reaching we're great cases, the growth advancing our had outcome ahead, infrastructure capital compelling to demonstrating plan, a financial discipline across growth story. focused Looking projects executing California We've materially our highlights that on

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

Operator

prepared concludes remarks. Shahriar the Partners. question This from [Operator Guggenheim you. Thank our And Instructions] Pourreza with first will come

Shahriar Pourreza

Oncor, clearly your had Texas you assumptions I -- is plan, the know but on legislation support. you've off in obviously commentary Starting a material for some and

just kind peer Oncor, additional opportunities. we CapEx also of yours a saw raise highlighting For of while

start how of quantify benefits us help benefits have start getting if in could just some especially you CapEx reflected, you allowed the ability plan? achieve we and seeing more when to the incremental Can When now embedded returns.

like So we approach updates update guidance as could further normal we Texas? see later your this year cycle around

Jeffery Martin

you there. ground at for a the lot This beginning And the been on his doing of to in and really an seeing a start job Thank and you. second. appreciation by a to deserve have our credit. They agree the clearly the constructive in more lot has They're Allen with system, I question. very and Shar, growth I some of growth exceptional expressing on a speak would I'll legislative had been team. cycle certainly Yes. Texas, They that Allen very

want of But future we this I perspective forward from on do our you basis, Oncor though, the current I February. providing and helpful legislation a Sempra's would it updates $XX look think may refreshing find mention, plan to million is as and falls to $XX in fall guidance. the million our thumb, to which DCRF full around improve year expected to Oncor earnings within a in estimation, rule

of reference, $X.XX $XXX approximately But is mentioned, a plant added capital in accretion our may ballpark pre-split a helpful on basis. it add Texas to on as that to be Also, of February we'll expected I for the be million updating call. incremental every to as Sempra XXXX

bit if visibility be Shar, that a system you seeing might little it just you're Allen, helpful into to growth the future on the your and But of provide expectations.

E. Nye

our continues Jeff. Yes, throughout metrics Growth all on frankly, very system track. that strong, just to very, sure, be record at and we the levels

We last up Q XX,XXX approximately new XX,XXX same premise growth XX.X% is quickly, about premise QX connected real in year. quarter-over-quarter. Just versus

generation, and interconnection a million, points total are retail points new requests the Transmission which XX last doubled over the versus strong. around retail We last our XX%, are since is up quarter incredibly -- added actually a incredibly same of down Q Broken over in increase by amount POIs, the QX requests now has or quarter based of in for XX% same the $XXX for and months, strong, and of last year. requests interconnection, generation XXXX. total Generation, up XX% year. of number transmission XX

system. So really strong growth on our transmission

West out things Texas on the And those requests But zone, more other numbers. West Far our activities, information about will the loop Texas were all Culberson increased Peak peak there, that remains XX% couple strong. work then our and project by those things year-over-year transmission numbers. -- over just 'XX some And XX.X% on in economic The team growth. aren't system up peak. ultimately new into weather way very request XX% stats development of presently their things for up the were XX%. a

growth the the pleased We're we're very continued pleased our seeing continued we're very economic in very strong So with system. expansion Texas. on with

said, If the Trevor 'XX, we -- had XXXX the transaction announced. back, in billion By as when $XX.X $XX.X with $XX.X you billion. had Sempra look billion was about of end Oncor we

year. we're already in doing said billion CapEx $X.X We've this about

We $XXX Board plan obviously then another the that. still we'll into first that for got billion . Looking going CapEx We is a new That do refresh. added meetings, capital And our forward, forward. million plan not quarter October CapEx Board pulled next X have to and $XX is we approve July. in our

rulemaking the likely be to we As if now. presently as we seeing well resiliency as right think of HB a said, that now plan see a to we're Trevor under XXXX. PUC growth the continue addition there's That's there upside

the time said, doubled from was base So the as transaction the Sempra already. we announced effectively rate Trevor

see and the market. customers, see in next ERCOT potentially we results again forward, base more to the the doubling in resilient in benefits our we things path a the resiliency all -- Looking and obviously to But years X growth a Texas in possible the to is appreciate and think question. to to rate story, benefits has manner of really we're our to rulemaking, a grid X part I are a actions. it's necessary great Board that pleased be those very continuing a All strong it, subject

Jeffery Martin

I'll incremental with kind $XX million here DCF to comment associated We the of $XXX to about the So make Texas. earnings the concluding that million accretion Shar, with the we've million just legislation. capital of guided talked of in $XX associated

And a this with our planning next Allen but work the X be than I key to done think, rate real effectively to We've their to team, of second Allen's this, a highlight, couple comments. have from more from XXXX in but base more base doubled X things think XXXX. And to years. highlighted I double opportunity fall time rate a to we there's the

that work more look the and in working about from February. his we coming to roll-forward with done. Oncor some X-year forward got be and But think Sempra's back Board how perspective we've So plan we finalizing updating and planning to capital certainly

Shahriar Pourreza

eventually appreciate Perfect. the the split optimization? lastly, on strategy Obviously, could any to me it. there is the it the of more there create valuation Got And strategy obviously, hope that Jeff, other further. stock of thoughts liquidity. stock sort for and improve Are is, some

I energy has renationalize desire to industries. some Mexico mean shown some

capital considered decisions? rotation storage the terminals there has Or need? ownership and SIP as of the security does especially kind been were fuel for structure So any a on any assets, kind of interest prohibit legacy

Jeffery Martin

Shar. Thank I'll those both kind address of questions. you, Yes. of

Utility the we stock thought have the first stock price XXth highest process the is we've is split that I company. announced that S&P as behind we split stock Index the currently time a think the for in celebrate our this XXX anniversary, the

stock improve group broader of think We make to the point, a accessible volumes it will investors. to your trading certainly, and more

we think So reflects I management's a on business positive. prospects. bullish And our just future view generally as view it it really

and your Mexico. come strategy, I'll back issue to Turning of to

reviews Board our focus a our our allowed model, visibility Board our every X to meeting. improve years. it's last the business to simplify us top of growth. strategy Our at management for team And future been It's

prepared feel work think story. you business. some more income the great indicated, from as our Allen do, that just growth continue the and prospects we his I in Allen's of updates provided to When we think have with our And growth about the things about about and remarks, team to to

combining Turning to are of by what of we of is. Mexico with prioritization business kind that larger tenure Mexico. his This this to portfolio. remarks, our effectively created And in to what prepared contract XX with a assets, scale goes mentioned midstream in XX years' issue LNG, with the Justin but overall approximately

a it's high-quality flows. So portfolio of cash really

done wheelhouse. to And capital X efficiently as and our growth the prioritize our to going SI. willingness structure that look to in we've we're years. capital finance future, question we there's our down no to in And I But to past you the opportunities continue the think We've in in sell utilities. demonstrated quite a like identified that right continue to recycle, that's

to his our that that at and strategy. And to Trevor continue we'll take less a team. look are will for always with we'll So something They core hard future assets. look be

strategy appreciate our going the So we feel good and about question. forward, we

Operator

Durgesh Our ISI. comes next from Evercore from question Chopra

Durgesh Chopra

year-to-date your mean wanted just your I you've is expectations? still just wide. get performance, believe, of Just my exceeded that's tracking thoughts EPS estimates. at your pretty versus range guidance But expectations, looking clearly, Street to and maybe I the

So the year your versus is up just how guidance shaping range?

Jeffery Martin

question. the Appreciate Sure.

banner around $X.XX we a strong reporting had adjusted in You'll think, a recall very And year, this $X.XX reported is XXXX, number. really We for we year. EPS. of that

great We strong first half, a quarter. good a about we've think we had guidance. our So first feel

things the expect State X. of that we with to well California. next very finalize our team on the that the retroactive we January of we're one of we as focused that And around rate execute call management the middle in cases Honestly, a making here sure to that Kevin's is in summer, business mentioned rates in on

this very we think year. I feel at where good So we're about

also strength it think next I year. to our for guidance signals

Durgesh Chopra

Got like. sounds it. Very strongly positioned, it

Okay. current in Then Or incremental? rate that opportunity, that mentioned $XXX But maybe the just turning to is the California, the CapEx is million, and embedded cases. plan? CAISO you

billion we that steps $X line CapEx worth to Maybe into be how your highlighted as just And to are next of then projects, bid just and us competitively there. to embedded talk going the time see on. also you which plans,

Jeffery Martin

growth. appreciate actually I X%. think, story seen company the demand XXXX. We growth but that prepared since has been that to year-over-year California. the of really growth about seen We've the a reflection electrification in place that's it never of remarks, taken a our very similar We in question. I've SDG&E at Sure. of in very state. is highlighted type Texas, strong there's underlying And

whether $XXX projects million of are issue in the your our X-year of On plan. transmission incremental

current Just February. years. to next that efforts next XX for going to needed really the transmission, This through CAISO's the plan need forward remember, the We're in our is plan XXXX. lock goes the roll

most the thought, these be up to. our plan will to larger X-year and projects on and the of be current here spoke that future give your state of helpful But perspective picked Kevin, might periods. I in So just the Durgesh outside in transmission opportunities it be numbers specifically

Kevin Sagara

we're adoption with XXXX, by San the back In Jeff's it, already as seeing California, of towards clearly, across grids estimated we of you growth vehicles. move lot double the with country commensurate about that we've Diego grids. for talking load that Durgesh. as electric Thanks, need And all electric second, than mentioned, demand in more upgrades kind a investments will Stepping as significant electrification. around a more in

billion. CAISO directly billion recent mentioned, So transmission $X.X incremental This $X billion we're just to is of we're as $X Trevor of to this add for $X other those going opportunities. And has awarded $X like announcement bid about been really to billion the and to SDG&E, projects. already billion an on excited

one country of And positioned well across enhance successful California continues the we're family high-voltage and and of the companies, to California path as to the largest operators aggressive, of of electric and that in investments in transmission here really electrification. Sempra owners be note facilitate aggressive this I'd

Durgesh Chopra

Got it.

over that there mentioned, quick The time of a that a is on awarded? line you projects worth that? $X what billion to going time Just follow-up. Is frame be

Kevin Sagara

with going a early to awarded I to list be to December there's -- year. winter it's be Well, and short then going in next something think close

there's a like to said, but CAISO very here, going process follow and I'm be is competitive. I pretty to to that optimistic, more think I going we're follow. So And

Operator

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

Julien Dumoulin-Smith

But don't inflation Clearly, time first the push been, some forward, All focus articulated previously. to move I a in bit in right. today waiting side. this on for the little line when time on you mind. to senses, getting to kind side, of on moderate? about has Cameron can LNG out if are just line think as If wanted you the understand of on you the I clarity

kind that bit achieved new to parameters be your Are to precise. for Bechtel? other there narrow little also understand certain the but in with you Or to considerations? partner, Just 'XX a of milestones here are to with input waiting the shift now, more

Jeffery Martin

prepared similar Port to very maybe Sure. a this about for time, on it saying, talking the Phase an overview in leapfrog provide start felt pass we not, is make LNG But by comments. that year were about we FID call of I'll the to to estimate would were August I'll to Julien, And to few Port Cameron. progress. a best where X we larger development program. way we Arthur, make but Justin were a to the for of potential at his about it just I Arthur think good last

a to expansion brownfield our doing a Port significant Bechtel of very Arthur X, on got more work both wonderful well at close be as We're at for We're is done probably Bechtel. years excited to to point. Arthur similar in projects, but we're Port X site making selected progress. probably position been this he's and on as We've Cameron have job, today.

for So finalizing in-house us benefit you're forward Julien's could with you work. working design details on thinking about cost have maybe step LNG additional to And Justin, Bechtel maybe do the on think us about overall provide for timing. and update big and a I portfolio things, that's how X us

Justin Bird

Great. Well, thank you, Julien.

Phase where are And and are step strategy excess as think X Let both and Jeff volumes Coast. Pacific Port of volumes. is Arthur that producing the business Phase ECA X and expected schedule. proceeding of back, that mentioned, we under me infrastructure date, an are safely to you construction, And LNG its Cameron Gulf both would business. to from Phase be take customers a a LNG our X about as offers on again, XXX% and build is core in

the projects, our Jeff continue And LNG fall Arthur. conduct of we development what set We, and what partners, the us. X, at as is the we through EPC look front to as At excited at opportunity we're you finalize the mentioned, Port arrangements. as look, a very doing work similar we're with Phase about to our value engineering Bechtel in Bechtel is will Cameron did Cameron And of selection milestone. major

we that you year, is so next commercial regulatory needed timing efforts These again, to of us definitive to can structure any and to design COD. an position the arrangements should And the optimize the overall optimize for subject goal FID cost have extensions. remember and

forward about the timing, as So to press arrangements. think you on that going we're EPC

Arthur what we'll were -- said, Jeff last try would this in on And we the position guess and same I X, I we Port thing. echo year do to

very Port optimistic. at X, Looking Phase Arthur

with potential We continue discussions advance customers. commercial to

Importantly, are many of interested whom project equity. also in

significant same regulatory engineering Port on at of we as LNG think with today, and where next have X we're on the moving construction takeaway made the Phase Arthur business very and time, I key financing. is are Julien, and forward our we progress Phase I Bechtel, the And strategy both kind and X about bullish year. are think advancing Cameron

Jeffery Martin

going commercial and our costs to the conclude, We're just progress finalize and year to to going we're on continue Cameron. complete that expansion. would saying next permits by arrangements FID to I then Cameron Julien, around look take And

about produce remind returns ability and all folks really And in that. on to And project we've to is, important race. I'd great best the a investors. it's the our box a for the It's The a the always do team it. putting demonstrated most optimizing never thing got risk we've

good our and on both progress Cameron So Arthur we Phase expansion. X about Port feel

Julien Dumoulin-Smith

last I Jeff, used last the the And about time heard just this don't leapfrogging. you talking it. those talking you mind it. you in light comments, time elaborating, Got you if term of about it. hearing I'm

here, getting just you second there derisk here, PAX. confident feel good -- So pretty as dynamics. than closer Do on about you're will, feel you if to time you commercial well? inflationary incremental also announcing on then And as the not the the about phase that just the project, terms terms line

Jeffery Martin

like clarify of Phase I and to really what bit uncertainty might fair Arthur just we there's little ourselves Port there projects, I them we've assure had call opportunity No, for referring was though we of are I'm advance publicly. be said that even there this that amount around was can would both of X a around you is, still both What forward. uncertainty progressing when projects, reminding of to seems brownfield an leapfrog last these I that of indicated in a year, there both

feel to like Phase on we both expansion Arthur work forward, Port very mature of those Port of X. going same We're Cameron doing diligently good them going Arthur So with of hope were about X to just we able projects. the Phase the on both and thing

Julien Dumoulin-Smith

potentially expansion. said future you And equity still in Right. anticipated sell down the to

I of comment, backdrop the too. figured clarify you that last LNG of late, considering Just transactions just

Jeffery Martin

we've Cameron our how lot a to No. ownership overall structure flows. as before today. in flexibility to we're level several you talked I But to about operating going XX% mean maximize this Julien, to goes finance capital us got things. cash finance of We've kind I a we mean, obviously, our things. times, see in tend of back at

at in Phase now Infrastructure XX% Arthur ownership a You've Sempra X. seen Port Partners position us for

optimize we But to the is shareholders. really so capital returns have structure our the one of that things the we opportunity for improve the unique

continue. So pattern or a certainly, would you I think practice expect to us that's

Operator

Tonet Our next Securities. Jeremy from from question comes JPMorgan

Jeremy Tonet

FERC pick expansion, and More there on the current of your of sense boat to this the lack kind what specifically, end? X. up for with was Julien see to do any Port on want And commercial timing putting the Arthur after there Just down impacting regards discussion? on you the

Jeffery Martin

month don't. that the it's think issued be FERC certificate certainly we do think to We issued. be No, next that important will X. in for We or

optimistic that. remain we about So

Jeremy Tonet

wondering seen Got a XXXX. it. And just if there. is at Or of much value lower Point fine transaction? point, maybe Cove a changing? value that we've a LNG drawing space That's in follow-up, than transacted the sign bit just a more of the then any helpful of on as did of this multiple And it thoughts a

Jeffery Martin

It a Look, interest. minority Point, saw I the take not place transaction interest. controlling at to you was was a think transaction Cove from what related

than has what's That marketplace think and taking annum. on, the will world, of in thing decade the more middle end the I when would XXX a below capacity LNG double grow place tonnes likely just XX% is back I in fall per by million of the century. global Jeremy, at the look by the today, marketplace by the you of

world to LNG. So it to need a the for way share. think out is about advantage, we market cleaner balance there look have a gas will as States the grow for think to and United We continues is natural more renewables. today we'll need competitive fuels commitment like the countries take That around their

XXXX. our regulation. depth the the in you about in gas today competitive of the We United And natural world are constructive the capital you States, markets of leader when and think price about the think

to is Point This United the This at X% or a business in is a well States Cove to will leadership this CAGR in Sempra to XXXX, strong marketplace. And is grown bigger. much from think taking We LNG expect in about NextDecade America see 'XX get the less any part position I to It's about about of growth as continue big company continue and positioned or world. be an we think it. to Sempra. North

Jeremy Tonet

buyers any or helpful Asian at this Just commercial there's to And you're point? able a more flavor of is concerns progressing Got for portfolio or very commentary between that otherwise? as as versus get discussions if European to provide wondering trying buyers how That's it. far there. kind

Jeffery Martin

on expect team. well marketing of as around place commercial the and the of type Asia our negotiations conversations. offtake some are vibrant having conversations Phase as Arthur of there's same of We're Europe by Many taking X in arrangements on market part would and lots of you Port a customers today, in very those It is expansion. Cameron

area. future in optimistic that about remain we So announcements

Jeremy Tonet

if I one, last could. quick Real it. Got

Sempra? if the I there? latest CCS that on how Arthur Or targeting and announcement. you could CCS this provide for what's Arthur wondering -- Port Just details addressable this project more just in you're Is guess, market

Jeffery Martin

Louisiana recent that very to project competitive X It's the needs we've And Arthur. we've Yes. Titan. and of in some serve space acquire. Arthur Texas I would at Phase facilities. this port is Port types future dedicated phases that say been these to to process It a and able Port have named has Titan of been

in third-party region. other We also the interest will serve it that expect

Operator

Our next question comes from Carly Davenport from Sachs. Goldman

Carly Davenport

quickly. wanted very go Just Texas to back to

You process you're timing terms of that? for the it? us give is kind a investments how in to under recover file can of Bill. to details take mentioned just able until And the from expected when Could long perspective approval you Resiliency had some to you begin

Jeffery Martin

rulemaking will about talk itself, in when over think bill the the when Commission. really you very of Sure. I participate could good will you very, it important in We think development is perhaps put Allen, But and It's first once that expect question. the a will front you'll a in the you, be set. rulemaking is And it filing you Texas. be we tell will X-year something your

E. Nye

Yes.

You Jeff. bet,

to run kind be time XXXX, I'll line -- the for Bill. rulemaking days. HB effective me a completed you bill through that Resiliency XXX we're became XX It June just within of year. of seeing The Let the this required

whatever of the free of rule this that be rulemaking. Presumably, us XX year, subject utilities statutory is to December like comes thereafter. deadline for the would So out to file

are are to by XXX modified Commission plans law that or The days. filed be with within the approved, required rejected

of second the XXXX for that to what a plan know 'XX. So we're hoping to of respect we now. to QX in have approved plan That's seek in us, with and half file

Carly Davenport

of mentioned initial has [indiscernible] just helpful. so you you -- then shifting far? if just And going the there's to process maybe about on kind there's kind how far, the of and Can California, surprised just rate really think That's that general there. that cases expectation if talk to ], so about [ Great. you anything

Jeffery Martin

in will concluded if filed make Kevin But of this the opening and with pass of briefs couple I'll comments, anything. middle the in indicated add second of and GRC he to I month, a proposed hearings I'll to quarter in XXXX. be the it wants Sure. July decisions the

most the cases. is important on is that's and how lined rate exactly safety, state think decarbonization, Carly, and reliability very the our I focused up thing, we

So the first following, we back had and the format think XXXX. rate are public that case aligned closely ramp in the This also really of what remember, policy it's is positions ramp we're a we with state.

we're add else anything So I Kevin, about how to unfolds? think this would you in good like shape.

Kevin Sagara

medical Carly, factors, I process-wise, just updated just mean mention I would we labor inputs insurance costs and inflation from for rates, that our the also just filings like.

and -- So mid-next to we look part fall this the PD a first year, the going We're just have refile updated part for in of forward them. a year. first of

Operator

Campanella Our Barclays. will come from Nicholas next from question

Nicholas Campanella

short. it keep I'll

you good So finalize guess, Port Arthur, see I XX% here. to

And to us? that holdco? causing XX%, still then the and we we fall you outlined kind range equity what's in quarter think external in kind funding the gave about when think the what was call, plan takes the should at now of first to solidified puts of and of around you kind this no Just about that financing you've the higher

Jeffery Martin

that say ownership. of XX% targeted our just Obviously, originally goal own we had to as and between would much I Sure. XX% project can. we is the as

information out level. to notionally very are at talked about was we the high our make could range up giving that to the on land XX% to pleased in guide range. we sure Previously, goal as XX% possible. So as we had calls, along all But just the

to we're us well Infrastructure, you he of the CFO it expects and forward how I'll the your on set update over just funding to Sempra Arthur go maybe Khan, who's on Faisel Denali for and X. pass can think Phase I capital Port process financing.

Faisel Khan

Jeff. Thanks, Yes.

So we this capital flexible of as about, talked have is sort always structure.

for financing and Then as the project underway. we have partners $X our equity sort So partners, billion as first, That's at of with capital course, ConocoPhillips well. our well KKR of Port project. Arthur, now roughly in

into Partners, up capital you as moving KKR And ADIA the have also and structure, then where Infrastructure have you we Sempra get well.

-- be So maximize sort flexible for to of sort to us again, of all that capital up capital from returns of Sempra. place project plenty in enables of on partners capital our having structure drawn the to

Nicholas Campanella

through I you on Train Got everyone focused progressing? Train for of for give And it. And increase sense on is X X track X can how know is that a whether then But very to us remain before you X? just debottlenecking Cameron. capacity

Jeffery Martin

Sure.

you take that. Justin, can

Justin Bird

you just Yes. debottlenecking very And work. as we're positive. be engineering recall, binary. the of won't still say that as Yes, I'd it's Nick, doing -- some

routine do, to down during additional see So to and for what do will as volumes. expect trains activities we trains, continue likely we maintenance, we'll the debottlenecking those we'll take

is positively. debottlenecking very moving again, So forward

Operator

come Wolfe. our next will question Steve And from from Fleishman

Steven Fleishman

million back to I Oncor on back of just on that DCRF to the mentioned, sensitivity some things of and wanted the to investment. $XX -- $XX the kind and million, circle you

you much So be this in Would place for of pretty when yes. would XXXX? -- see that benefit DCRF? Or

Jeffery Martin

question. good a it's Yes,

make DCRF, filing XXXX. primarily expect DCRF We which to little September. pickup the will year, for in might our bit this second this a year in for be be And

a full run benefit rate be XXXX, in will it So Steve.

Steven Fleishman

your But guidance range I Okay. your guess. you guidance said because is falls pretty wide, it within

Jeffery Martin

the And review guidance -- financing recall, you'll with call. updating correct. the we that exercise. also Board fall February we'll course But of in ordinary and as be on our our also XXXX also issuing part we'll That's our

Steven Fleishman

normal that fall. fully just Or finalized as The you -- Or would the with I update capital will tied which the update kind maybe on? have well, reliability just will by include include been come at that said are going this that, course -- in on in you'll which won't Oncor, there? Okay. that them? mean And aspect you of to later

Jeffery Martin

Yes.

X-year of question. seen again, to well our Board will with certainly this just year-over-year, Clevenger Oncor I grow from the $XX deeply Carly's do roll-forward to planning plan we Sempra. $XX back both led normal as to and process, have obviously TTI the We as think be think goes that to involved grow going indicated. and billion obviously already ownership the by Don at Oncor. billion going capital it's we've We're

the will of be finalized be Allen not indicated, to will until, for year. this on to rulemaking, Allen XX rulemaking, Steve, at key The the earliest, coming new And the resiliency. back with which Board add-on this December you an issue related

will that in doing the finalized roll-forward is plan. X-year we're the normal that fall the So capital work be

the to Board, hustle his analysis that the that with rulemaking Allen to have lead of the filing put team Allen we second for But place, and expect from made year. appropriate in I Allen, together we will we the half have Oncor indicated, Commission. and once as feedback the to the And the the do that? Commission will in add want think, you to

E. Nye

No, Jeff.

right. exactly that's I think

Operator

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

Jeffery Martin

I Look, first of believe call, XX% quarter wanted ownership higher for that and our to close certainly year. we're Cameron make as continue and we our are the we're pleased X. I results, percentage today's financial great with both at Arthur LNG the we Arthur story, at Phase the note to pleased out half to for progress to of and X on Port at guide Port progress both making and the Phase also

can stock continued signal, our strong leading pleased X-for-X the there continues celebrate you Texas growth as our improved split. as XXth we're country. is the And we my tell And call, a one of today's the from be opinion, regulatory stories compact very announce in in to And anniversary, for investment. to finally,

join making appreciate to everyone this us We morning. time

several call, many our with team. We This and feel Wisconsin there. IR our you of Las concludes Vegas to free to see up hope IR have in this and events month and follow Thank you.

Operator

participation. your for you Thank

disconnect. You may now

Sempra (SRE) 3 Aug 232023 Q2 Earnings call transcript