Focusing Our Strategy
In 2018, we laid out a strategic plan known as “Vision 2022,” centered on the mission of becoming North
America’s premier energy infrastructure company. The past
two years have been transformational for us. We sharpened our
focus on the most attractive growth markets in North America,
simplified our business model and strengthened our balance
sheet.
We executed on that strategy by divesting certain non-core
assets and reinvesting sales proceeds into our core markets:
California, Texas and Mexico, and the liquefied natural gas
(LNG) export market.
These markets enable us to focus on the delivery of cleaner and
more secure forms of energy to consumers right here in North
America as well as abroad. Moreover, we are focusing our role in
the energy value chain on transmission and distribution
investments that provide attractive risk-adjusted returns and
higher value for our stakeholders.
We have accomplished many of our goals and made great progress
in our journey to become North America’s premier energy
infrastructure company. Over the past year, we have accomplished
the following:
-
Completed the sale of our U.S. renewables business and
non-utility natural gas storage assets, which has generated
approximately $2.5 billion in total proceeds since December
2018;
-
Entered into separate agreements to sell our Peruvian and
Chilean businesses in South America for $3.59 billion and
$2.23 billion, respectively;*
-
Expanded our footprint in Texas by closing an acquisition that
extends Oncor Electric Delivery Company LLC’s (Oncor)
transmission system in north, central and west Texas;
-
Received a final decision in San Diego Gas & Electric
Company’s (SDG&E) and Southern California Gas Company’s
(SoCalGas) 2019 General Rate Cases;
-
Commenced shipping LNG from our Cameron LNG joint venture in
Hackberry, La., to global markets;
-
Entered into multiple preliminary agreements that provide the
framework for cooperation in the development of potential
North American LNG export projects;
-
Commenced commercial operations of the Sur de Texas-Tuxpan
marine pipeline, developed by a joint venture between
Infraestructura Energética Nova, S.A.B. de C.V. (IEnova), our
Mexico subsidiary, and TC Energy Corporation. The pipeline can
deliver up to 2.6 billion cubic feet per day of U.S. natural
gas to Mexico; and
-
Delivered total shareholder return of 44% in 2019, compared to
31% for the S&P 500 Index and 26% for the S&P 500 Utilities
Index, and increased our dividend by 8%, marking the 10th
consecutive year we’ve raised our dividend.
Leading the Global Energy Transition
There is an energy transition occurring across the globe —
and I believe the 21st century will be the “Century of
Energy.” The transition is occurring differently market by
market, with lower-carbon alternatives playing an increasingly
important role.
Over the next decade, we will continue to make critical
investments in smart, new energy infrastructure aimed at helping
bring energy choice and security to people around the world.
I am proud that in every market we serve, our energy
infrastructure is helping to reduce the carbon footprint of the
energy ecosystem.
In California, both of our utilities — SDG&E and
SoCalGas — are taking bold steps to reduce greenhouse gas
emissions. Approximately 45% of the electricity that SDG&E
delivers to homes and businesses comes from solar, wind and
other renewable energy sources. In 2019, SoCalGas announced a
goal to replace 20% of its traditional natural gas supply with
renewable natural gas by 2030. SoCalGas is also focused on
developing hydrogen technologies that will help reduce
greenhouse gas emissions without sacrificing
energy security and reliability.
Oncor is expanding its reach in Texas by connecting the next
generation of customers to renewable energy through its
approximately 140,000 miles of transmission and distribution
lines. Texas leads the U.S. in the production of wind energy and
is also among the leading states in solar energy production.
Most of the generation added in Texas over the past decade has
been fueled by a combination of natural gas, wind and solar
energy.
IEnova also continues to make significant progress in the
midstream and refined fuels markets, helping Mexico diversify
its energy supply and increase both the reach and reliability of
the country’s energy ecosystem.
Through our strategically located LNG development projects, we
are developing infrastructure that is designed to directly
dispatch LNG into Atlantic and Pacific markets to deliver
cleaner, more reliable and more affordable energy to the world,
while displacing fuel oil and coal in power production.
At Sempra Energy, we are focused on growing in North America
while having a global impact. The world is depending on new
sources of energy — with many countries needing more
secure forms of energy to serve the needs of their growing
populations.
Delivering Energy With Purpose
Sempra Energy’s vision to deliver energy with purpose is a
key component of our culture, uniting employees through a shared
commitment to have a positive impact on the communities we serve
and, more broadly, the world. Our industry as a whole must also
lead with purpose and explore big ideas as we think about the
positive benefits we can create for stakeholders in the future.
I am so proud that our company has the privilege to serve more
than 40 million consumers and plays an important role in
providing cleaner, more reliable energy to countries all around
the world. We have been successful in improving our earnings
profile, while also endeavoring to better serve customers
and the environment.
What we do truly matters. Our infrastructure connects people to
the energy they need to power their lives and we do not take
that for granted. The dedication of our more than 20,000
employees to find new and better ways to deliver energy with a
relentless focus on safety is something that inspires me every
day.
We will continue to be forward-thinking as we deliver energy
with purpose, with a focus on creating value for all our
stakeholders. And I will continue to challenge our employees and
our industry to think bigger and more boldly as we embrace
opportunities to make the world an even better place.
Ever forward together,
Jeffrey W. Martin
Chairman and Chief Executive Officer
