- EPS Guidance Affirmed: Sempra confirmed 2025 adjusted EPS of $4.30–$4.70 and 2026 of $4.80–$5.30, aligning with Q2 2025 results of $0.89.
- UTM Impact on Oncor: The Unified Tracker Mechanism (UTM) could boost Oncor’s ROE by 50–100 bps, with first filings expected in early 2026.
- California Cost Savings: SDG&E targets $300M in savings via program phase-outs and $200M in federal tax credits passed to customers.
- Infrastructure Equity Sale: Sempra Infrastructure’s potential 15–30% equity sale to KKR aims to be accretive to EPS and credit, closing by mid-2026.
- LNG & Wind Progress: ECA LNG Phase 1 and Cimarron Wind will drive 2026 earnings, while Port Arthur LNG Phase 2 secured a 20-yr $1.5MTPA SPA with JERA.
Texas Operations: On Track for Growth
Oncor, Sempra's Texas utility, is experiencing significant growth, with a projected $12 billion increase in capital expenditure beyond the existing $36 billion plan. This growth is fueled by robust demand for interconnection from data centers, continued development of the data center sector in Texas, and expansion of transmission infrastructure. The recently passed HB5247, which enables a Unified Tracker Mechanism (UTM), is expected to improve Oncor's return on equity by 50 to 100 basis points over time.
California: Balancing Growth and Affordability
In California, SDG&E secured $600 million in transmission projects and is actively pursuing cost reductions through program refinements. The company is aiming for $300 million in savings, complemented by $200 million in federal tax credits that will be passed on to customers. Sempra California officials emphasized the company's commitment to addressing affordability concerns while continuing to invest in grid modernization and wildfire mitigation programs.
Sempra Infrastructure: Capitalizing on Global LNG Demand
Sempra Infrastructure continues to make progress on key liquefied natural gas (LNG) projects, including ECA LNG Phase 1, Cimarron Wind, and Port Arthur LNG Phase 1. The company recently signed a 20-year Sales and Purchase Agreement (SPA) with JERA for 1.5 million metric tons per annum (MTPA) of offtake capacity at Port Arthur LNG Phase 2. This, coupled with strong global LNG demand, positions Sempra Infrastructure for significant growth in the coming years.
Capital Recycling and Financial Strength
Sempra is actively pursuing strategic capital recycling initiatives. Discussions with KKR regarding a potential equity sale of 15% to 30% in Sempra Infrastructure are progressing well, with a definitive agreement anticipated soon. The company is also advancing the sale of its Ecogas assets, attracting substantial interest from both strategic and financial buyers. The proceeds from these transactions are expected to strengthen Sempra's balance sheet, unlock value for shareholders, and provide capital for growth in regulated utilities.