Sempra is entering 2025 with a robust portfolio of new investment opportunities that can help meet the growing energy needs of its customers, while helping the U.S. maintain its leadership position in technology and innovation, said Sempra Chairman and CEO Jeffrey W. Martin.
In a Dec. 11 interview on CNBC’s Mad Money, Jim Cramer made the case that utilities have lower business risk and an improving growth profile due to a series of strong tailwinds. When asked to share his views on utilities, Martin said, “We continue to be bullish on utilities at this point in the investment cycle. Most people are surprised to know that utilities have outperformed the broader market since early in 2000.”
Martin added, “Today, we believe utilities are in a super cycle — with future projected growth trending higher than the historical sector average. We’re benefiting from it at Sempra and have a portfolio of new growth opportunities across the energy value chain. With higher expected growth, a strong dividend and an expectation of a lower interest rate environment, we continue to anticipate a lot of value creation ahead for our shareholders.”
We believe Sempra is poised for strong growth with increasing demand for energy around the world, but particularly in California and Texas where Sempra has a strong leadership presence. With the surge in cloud computing, artificial intelligence and other digital services comes a need for more data centers and, in turn, more energy infrastructure to produce and deliver more power to this growing segment of the American economy.
“Today, America has a competitive advantage in technology and innovation. The challenge, however, is whether we can maintain this national advantage or will these industries move overseas,” said Martin. “That’s because AI and data centers are energy intensive. Where we operate in Texas, for example, the regulator is expecting electricity demand to nearly double by 2030. That’s why — at Sempra — we’re ramping up our capital campaign to invest in critical new infrastructure to support these industries. We’re executing on a record $48 billion capital program1 today and expect a significant increase in that in our February earnings call.”
Across the company, Sempra maintains roughly 300,000 miles of transmission and distribution lines. Additionally, the company has a diverse portfolio of energy infrastructure devleopment projects, including a large construction program aimed at supporting the liquefied natural gas (LNG) export market, which Martin calls “a great American growth story.” Martin noted America has a 25% market share in LNG globally, with roughly 50% of the LNG being landed in Europe today originating from the U.S.
“Through the end of the decade, we expect the U.S. will continue to take market share,” said Martin. “Sempra has a large LNG facility in Louisiana and two more under construction in Texas and Baja California, Mexico. More importantly, we have a backlog of LNG development projects that we expect will benefit from the improved regulatory environment from the new administration.”
Martin concluded by stating, “Our allies in Europe and Asia are looking to American leadership for their energy security, and it will be companies like Sempra that can continue to make the capital investments that are needed to support their energy needs.”
1Refers to Sempra’s 2024 – 2028 $48 billion capital plan presented in February 2024, which includes Sempra’s proportionate ownership interest in projected capital expenditures at unconsolidated entities while excluding Sempra’s projected capital contributions to those entities and excludes noncontrolling interests’ proportionate ownership interest in projected capital expenditures at Sempra and at unconsolidated entities.
In this article and video, 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,” “positioned,” “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, audits, 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, U.S. Internal Revenue Service, Public Utility Commission of Texas 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, arbitration, property disputes and other proceedings, and changes (i) to laws and regulations, including those related to tax and trade policy and the energy industry in Mexico and (ii) due to the results of elections; 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) fluctuating 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 policies, laws, rules, regulations, trends and required disclosures, 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 emerging 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 injection and 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, www.sec.gov, and on Sempra’s website, www.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.