Sempra(US:SRE)2024-08-06 19:21Financial Data and Key Metrics Changes - The company reported adjusted EPS of $0.89 for Q2 2024 and year-to-date adjusted EPS of $2.24, affirming full-year 2024 adjusted EPS guidance [7][28] - GAAP earnings for Q2 2024 were $713 million or $1.12 per share, compared to $603 million or $0.95 per share in Q2 2023 [28] Business Line Data and Key Metrics Changes - At Sempra California, there was a $26 million increase primarily from higher CPUC base operating margin, offset by $49 million from lower income tax benefits and higher net interest expense [29] - Sempra Texas saw a $42 million increase in equity earnings due to rate updates and increased capital investment [30] - Sempra Infrastructure experienced a $48 million decrease in equity earnings and revenues in the transportation business, attributed to new tariffs in Mexico and higher operating expenses [30] Market Data and Key Metrics Changes - Oncor's annual premise growth is trending around 2%, nearly double the national average, with significant growth in various industries including manufacturing and technology [5] - Interconnection requests in Texas increased by 13% year-over-year, with a notable rise in requests from large load customers [16][70] Company Strategy and Development Direction - The company aims for a long-term EPS growth rate of 6% to 8%, focusing on safety, operational excellence, and critical infrastructure investments [4][8] - Sempra's strategy includes positioning its portfolio in attractive economic markets and focusing on transmission and distribution investments to improve earnings quality [8][9] - The company is committed to advancing decarbonization initiatives and enhancing energy security through infrastructure investments [6][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the regulatory process for the California GRC, expecting a proposed decision later this summer and a final decision by year-end [5][39] - The company anticipates higher capital spending in the future, particularly in Texas, driven by increased electricity demand and infrastructure needs [17][18] Other Important Information - The company is executing a record five-year capital plan of approximately $24 billion, with additional investments planned for system resiliency [6][11] - Sempra Infrastructure's ECA LNG Phase 1 is 85% complete, but delays in commercial operations are expected until spring 2026 due to labor retention issues [24][46] Q&A Session All Questions and Answers Question: Thoughts on ECA COD delays and 2025 guidance - Management acknowledged disappointment in the ECA schedule change but remains confident in maintaining targeted returns and reaffirming 2025 guidance [34][35] Question: Timeliness of GRC outcome and financial updates - Management expressed confidence in the GRC filing and expects to provide updates on the capital plan in Q4, with rates retroactively effective to January 1, 2024 [39][40] Question: ECA project cost tracking and overall project cost - The estimated increase in capital for Sempra's net share of the ECA project is about $300 million, with expectations to maintain targeted returns [41][42] Question: Risks to the system resiliency plan (SRP) settlement - Management highlighted the positive timing of the SRP settlement and the importance of continued investment in resiliency amid extreme weather conditions [49][50] Question: Expansion plans around mobile generation and SRP - Management emphasized the evolving growth story in Texas and the commitment to investing in reliable infrastructure, with a focus on the SRP's benefits for customers [53][58]