Sempra’s chief financial officer Karen Sedgwick, together with CEO and Chairman Jeffrey W. Martin, announced during the 2023 year-end earnings call on Feb. 27 that the company’s capital plan will increase to $48 billion, representing a 20% increase from the previous capital plan.1
“Strong projected growth in Sempra’s core markets of California, Texas, Mexico and the global energy market is driving a substantial increase in our five-year capital plan,” Sedgwick said. “Expanding our capital campaign also supports our confidence in being able to deliver sustainable, long-term value for our owners.”
Sempra’s family of companies have a long history of investing on behalf of its customers to deliver energy to large growing markets in North America, dating back to the 1800s. The five-year capital plan comes as the company aims to stay at the forefront of its industry by making disciplined investments in new energy networks, connecting customers to new renewable power sources and pioneering smart grid technologies to advance reliability and safety. With energy essential to modern life, these investments aim to fulfill people’s changing energy needs in the years ahead.
“At Sempra, we’re a San Diego-based company with a track record of innovation and using new technology to better serve customers,” said Sedgwick, who has worked at the company since 1992. “We are proud of our progress in the energy transition and our reputation of delivering strong financial returns to our shareholders.”
In the same earnings update on Feb. 27, Sempra announced that the board of directors declared a $0.62 per share quarterly dividend on the company's common stock — or $2.48 per share on an annualized basis, representing a 4.2% increase over 2023 and the 14th consecutive year the company has raised its annualized common stock dividend.
Sempra also announced that it is narrowing its full-year 2024 earnings-per-common share (EPS) guidance range to $4.60 to $4.90 and introduced a full-year 2025 EPS guidance range of $4.90 to $5.25, which represents a 7% year-over-year increase from the midpoint of the previous year’s EPS guidance range. The company also reiterated its long-term projected EPS growth rate of approximately 6% to 8%.
New energy networks to fulfill North America’s needs
The announcements from the 2023 year-end earnings call are the result of the company’s narrow focus within the energy value chain on transmission and distribution infrastructure that produce high quality recurring cash flows. In addition, Sempra’s business strategy creates opportunity for its customers to benefit from electrification and decarbonization trends in key markets.
“We are owners and operators of top tier transmission and distribution platforms located in some of North America’s largest markets, with a goal of delivering safe, reliable, resilient and increasingly sustainable energy for our customers,” Sedgwick said.
Harnessing innovation to drive long-term sustainable energy solutions
Sempra and its family of companies have thrived in recent years, Sedgwick said, in part by advancing innovation and new technologies across its three growth platforms — Sempra California, Sempra Texas and Sempra Infrastructure.
Across these three growth platforms — which deliver energy to nearly 40 million consumers — stakeholders have seen innovation that ranges from North America's first-ever clean hydrogen powered microgrid and home — the H2 Innovation Experience — and the Wildfire Next Generation System, a predictive modeling technology that helps protect communities from wildfire risk. To cater to a fast-growing population in the Lone Star state, Sempra Texas is extending its electrical grid to connect to new renewable generation that harnesses the sun and wind to meet growing demand, while Sempra Infrastructure continues to accelerate access to energy through its high-growth, lower carbon platform.
“As we look to the future, Sempra will continue to embrace innovation as we seek opportunities to provide cleaner and more secure energy for our customers and create a more sustainable business,” said Sedgwick. “By doing so, we give investors exposure to attract growth in the energy infrastructure sector with support of a growing dividend and a management team committed to providing superior, long-term returns.”
1 Refers to the increase from Sempra’s 2023 – 2027 capital plan to its 2024 – 2028 capital plan which includes $16.2B of Sempra’s proportionate ownership interest in projected capital expenditures at unconsolidated entities while excluding Sempra’s projected capital contributions to those entities, and excludes $8.6B of noncontrolling interest’s proportionate ownership interest in projected capital expenditures at Sempra and at unconsolidated entities. Sempra's capital plan and expectations regarding potential increases to its capital requirements are based on a number of assumptions, the failure of which to be accurate could materially impact Sempra's actual capital expenditures.
This article contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions about the future, involve risks and uncertainties, and are not guarantees. Future results may differ materially from those expressed or implied in any forward-looking statement. These forward-looking statements represent our estimates and assumptions only as of the date of this article. We assume no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise.
In this article, forward-looking statements can be identified by words such as “believe,” “expect,” “intend,” “anticipate,” “contemplate,” “plan,” “estimate,” “project,” “forecast,” “envision,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “construct,” “develop,” “opportunity,” “preliminary,” “initiative,” “target,” “outlook,” “optimistic,” “poised,” “maintain,” “continue,” “progress,” “advance,” “goal,” “aim,” “commit,” or similar expressions, or when we discuss our guidance, priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations.
Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include: California wildfires, including potential liability for damages regardless of fault and any inability to recover all or a substantial portion of costs from insurance, the wildfire fund established by California Assembly Bill 1054, rates from customers or a combination thereof; decisions, investigations, inquiries, regulations, denials or revocations of permits, consents, approvals or other authorizations, renewals of franchises, and other actions, including the failure to honor contracts and commitments, by the (i) California Public Utilities Commission (CPUC), Comisión Reguladora de Energía, U.S. Department of Energy, U.S. Federal Energy Regulatory Commission, Public Utility Commission of Texas, U.S. Internal Revenue Service and other regulatory bodies and (ii) U.S., Mexico and states, counties, cities and other jurisdictions therein and in other countries where we do business; the success of business development efforts, construction projects, acquisitions, divestitures, and other significant transactions, including risks related to (i) being able to make a final investment decision, (ii) completing construction projects or other transactions on schedule and budget, (iii) realizing anticipated benefits from any of these efforts if completed, (iv) obtaining third-party consents and approvals, and (v) third parties honoring their contracts and commitments; macroeconomic trends or other factors that could change our capital expenditure plans and their potential impact on rate base or other growth; litigation, arbitrations, property disputes and other proceedings, and changes to laws and regulations, including those related to tax and trade policy and the energy industry in Mexico; cybersecurity threats, including by state and state-sponsored actors, of ransomware or other attacks on our systems or the systems of third parties with which we conduct business, including the energy grid or other energy infrastructure; the availability, uses, sufficiency, and cost of capital resources and our ability to borrow money or otherwise raise capital on favorable terms and meet our obligations, including due to (i) actions by credit rating agencies to downgrade our credit ratings or place those ratings on negative outlook, (ii) instability in the capital markets, or (iii) rising interest rates and inflation; the impact on affordability of San Diego Gas & Electric Company’s (SDG&E) and Southern California Gas Company’s (SoCalGas) customer rates and their cost of capital and on SDG&E’s, SoCalGas’ and Sempra Infrastructure’s ability to pass through higher costs to customers due to (i) volatility in inflation, interest rates and commodity prices, (ii) with respect to SDG&E’s and SoCalGas’ businesses, the cost of meeting the demand for lower carbon and reliable energy in California, and (iii) with respect to Sempra Infrastructure’s business, volatility in foreign currency exchange rates; the impact of climate and sustainability policies, laws, rules, regulations, disclosures and trends, including actions to reduce or eliminate reliance on natural gas, increased uncertainty in the political or regulatory environment for California natural gas distribution companies, the risk of nonrecovery for stranded assets, and uncertainty related to relevant emerging and early-stage technologies; weather, natural disasters, pandemics, accidents, equipment failures, explosions, terrorism, information system outages or other events, such as work stoppages, that disrupt our operations, damage our facilities or systems, cause the release of harmful materials or fires or subject us to liability for damages, fines and penalties, some of which may not be recoverable through regulatory mechanisms or insurance or may impact our ability to obtain satisfactory levels of affordable insurance; the availability of electric power, natural gas and natural gas storage capacity, including disruptions caused by failures in the transmission grid, pipeline system or limitations on the withdrawal of natural gas from storage facilities; Oncor Electric Delivery Company LLC’s (Oncor) ability to reduce or eliminate its quarterly dividends due to regulatory and governance requirements and commitments, including by actions of Oncor’s independent directors or a minority member director; and other uncertainties, some of which are difficult to predict and beyond our control.
These risks and uncertainties are further discussed in the reports that Sempra has filed with the U.S. Securities and Exchange Commission (SEC). These reports are available through the EDGAR system free-of-charge on the SEC's website, sec.gov, and on Sempra’s website, sempra.com. Investors should not rely unduly on any forward-looking statements.
Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and Infraestructura Energética Nova, S.A.P.I. de C.V. (IEnova) are not the same companies as the California utilities, SDG&E or SoCalGas, and Sempra Infrastructure, Sempra Infrastructure Partners, Sempra Texas, Sempra Texas Utilities, Oncor and IEnova are not regulated by the CPUC.
