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    SRE
    Earnings call· Jun 2026(Q2 FY26)

    SEMPRA Q2 FY26 earnings call SRE

    Aug 6, 2026 Source

    Executive summary

    Sempra Q2 FY26 — Strong Performance, Oncor Growth Opportunities, and Strategic Portfolio Optimization

    Sempra delivered strong Q2 FY26 results, affirming its full-year EPS guidance and long-term growth rate, driven by robust performance across its utility segments. The company is strategically optimizing its portfolio through the imminent sale of SI Partners and Ecogas, recycling capital into its regulated utilities, particularly Oncor, which is poised for multi-decade growth from unprecedented electricity demand in Texas. While the ECA LNG Phase 1 commissioning faces a slight delay, the company remains constructive on its overall capital plan and regulatory environment, emphasizing a durable framework for future investments.

    Highlights

    5

    • Achieved double-digit gains in adjusted EPS for the first half of the year.

    • Affirmed full-year 2026 adjusted EPS guidance range of $4.80 to $5.30 and 2027 EPS guidance range of $5.10 to $5.70.

    • Affirmed projected long-term EPS growth rate of 7% to 9%.

    • Oncor's 5-year base capital plan of $47.5 billion and $10 billion in incremental capital opportunities are progressing, with an expectation for the roll-forward plan to increase.

    • Expected closing of SI Partners transaction later in Q3 FY26, deconsolidating over $9 billion of debt and displacing common equity needs.

    Concerns

    3

    • ECA LNG Phase 1 substantial completion delayed to Q4 2026 due to equipment damage, impacting sales commencement.

    • Uncertainty and potential delays in ERCOT's batch zero process for large load interconnections due to new audit requirements and political commentary.

    • Ongoing political commentary and landowner concerns regarding 765 kV transmission approval process in Texas, potentially impacting timelines.

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Sempra Texas
    Higher equity earnings from new base rates, including interim rates, UTM, higher invested capital, and customer growth, partially offset by higher depreciation, interest expense, and O&M.
    		———$138 million
    Sempra California
    Increased earnings primarily from higher CPUC base operating margin, net of operating expenses, and higher electric transmission margin, partially offset by lower AFUDC equity. Also had $11 million lower earnings from higher net interest expense and other, partially offset by higher income tax benefits.
    		———$24 million
    Sempra Infrastructure
    Increased earnings primarily from lower depreciation due to assets held for sale, lower O&M, and other, partially offset by higher income tax expense.
    		———$26 million

    Operational metrics

    13
    Oncor Favorable Impact from Base Rates
    $50 million
    Q1 FY26

    Reflects the difference between newly approved rates and previously effective rates during Q1 2026, due to the timing of Oncor's comprehensive base rate settlement approved in April 2026.

    ERCOT All-Time Peak Load
    91 GWnew all-time peak
    July 2026

    Reached last month, indicating unprecedented growth in electricity demand in Texas.

    Oncor Current System Peak Load
    31 GW
    Current

    The 44 GW of additional demand from batch zero would represent a 140% increase to this figure.

    Oncor Collateral from Large Load Customers
    nearly $6 billion
    Current

    Includes collateral for the 44 GW of batch zero submissions.

    Oncor Total Active Requests for Transmission POIs
    15%up
    YTD

    Year-to-date increase in total active requests for transmission Points of Interconnection.

    Oncor LC&I (minus data centers) New Requests
    8%up YoY
    Q2 FY26

    Increase in new requests from large commercial and industrial customers, excluding data centers, compared to the same quarter last year.

    Oncor Active Requests
    22%up YoY
    Q2 FY26

    Increase in active requests compared to Q2 FY25.

    Oncor Incremental Capital Opportunities
    $10 billion
    through 2030

    These opportunities are incremental to Oncor's 5-year base capital plan.

    Oncor Historical Upside Opportunities (Feb 2025)
    $12 billion
    Feb 2025

    Prior upside opportunities that were subsequently rolled into the new base capital plan.

    Sempra Enterprise Utility Platform Growth
    11%
    Annually

    Annual growth rate for the utility platform at the enterprise level.

    Sempra Enterprise Utility Platform Growth (with Oncor upside)
    13%
    Annually

    Projected annual growth rate including additional upside opportunities at Oncor.

    California Rate Base Growth
    5%
    Annually

    Annual rate base growth in California, reflecting a balanced approach to safety, reliability, and affordability.

    Oncor Rate Base as % of Sempra Total
    >60%
    2030

    Goal for Oncor's rate base to comprise over 60% of Sempra's total rate base by 2030.

    Industry KPIs

    2
    MetricValueDetails
    Adjusted operating EPS$1.16per share
    Multi year capital plan$65 billionUSD

    Orderbook & backlog

    1
    ERCOT Batch Zero Large Load Requests44 GWQ2 FY26

    Includes 27 GW of base load (not requiring additional interconnection studies or allocation) and 17 GW of studied load (to be evaluated and assigned through system-wide reliability analysis). Approximately 8 GW is already connected and ramping towards full utilization.

    Deals & partnerships

    2
    SI Partners (KKR)Sale of 45% equity stake in Sempra Infrastructure Partners

    The transaction directly supports Sempra's corporate strategy by simplifying its business model and recycling capital into regulated utilities.

    EcogasSale of Ecogas in Mexico

    Sempra Infrastructure is making solid progress on the sale, having recently received critical regulatory approval.

    Capital programs

    2
    Oncor 5-year Base Capital Planunderway$47.5 billion

    This plan was announced 4 months ago and includes approximately $5 billion focused on 765 import pathways related to the Permian.

    Oncor Base Capital Program (Feb 2025)superseded$36 billion
    Start: February 2025

    This was Oncor's base capital program in February 2025, which was subsequently superseded by the $47.5 billion plan.

    Risks & headwinds

    4
    ECA LNG Phase 1 Commissioning DelayQ4 2026

    Substantial completion expected in Q4 2026

    Mitigation: Working with EPC contractor and OEM on root cause analysis and remediation plan for equipment damage. Sales under long-term agreements to commence shortly after substantial completion.

    ERCOT Batch Zero Process DelaysBeyond February 2027 for capital investments

    Uncertain timeline for batch zero process

    Mitigation: Governor Abbott's call for comprehensive verification and audit of data centers, reordering the process to allow more front-end participation for a more durable framework. ERCOT to consult with PUCT on next steps and seek good cause exception on August 20.

    Texas 765 kV Transmission Approval ProcessOngoing

    Political commentary and landowner concerns

    Mitigation: Working collaboratively with regulators, impacted landowners, and state officials to advance a reliable grid while protecting landowner rights. Emphasizing that time spent on an inclusive process leads to a more durable framework.

    California Wildfire Liability FrameworkCurrent legislative session

    Status quo doesn't work

    Mitigation: Actively engaging with policymakers to ensure legislation focuses on public policy, livability, and financial health of utilities. Constructive engagement on a durable wildfire framework.

    What to watch in Q3 FY26

    5

    SI Partners Transaction Close

    Q3 FY26
    CurrentPending regulatory approval
    TargetClosed

    Why it matters

    Closing this transaction is key for Sempra's strategic pivot, capital recycling, and balance sheet strength through debt deconsolidation.

    The first is the pending sale of a 45% equity stake in SI Partners. The transaction is expected to close later in the quarter and directly supports our corporate strategy by simplifying our business model, recycling capital into our regulated utilities displacing the need for common equity in our current base capital plan and deconsolidating close to $9 billion of debt from Sempra's balance sheet.

    Q&A highlights

    5

    Inquiring about the impact of data center growth on Oncor's capital plan, potential for alternative generation, and the batch zero process.

    Jeff Martin emphasized an improved long-term view for Oncor, with batch zero opportunities being incremental to the base capital plan. He highlighted public policy focus on protecting Texas families from new costs, ensuring data centers cover full interconnection costs, and lower residential bills through tariff allocation. Allen Nye clarified the difference between RTP submission and batch zero rules, confirming strong ongoing interest and growth in new requests.

    “I think one of the key things that we wanted to approach this call was in the message that our long-term view at Oncor has improved over the last quarter. So we continue to think there's a great opportunity here for our base capital plan to move forward as well as upside capital.”

    asked by Constantine Lednev · answered by Jeffery Martin

    2 min read5 chapters

    Detailed Narrative

    01

    Texas Electricity Demand and Oncor's Role

    ERCOT recently reached a new all-time peak load of 91 gigawatts. Oncor is well-positioned for a multi-decade investment opportunity focused on modernizing and extending the electric grid, driven by significant low growth forecasts. Oncor's current capital plan accounts for major investment drivers such as new high-voltage transmission projects and other system upgrades, with confidence in its execution and incremental capital opportunities.

    02

    ERCOT Batch Zero Process and Large Load Pipeline

    The PUCT recently approved ERCOT's batch zero process for selecting and sequencing large load customer interconnection requests. This process includes 44 gigawatts of large load requests expected to be eligible in Oncor's transmission system, comprising 27 gigawatts of base load and 17 gigawatts of studied load. This represents a 140% increase to Oncor's current system peak load of 31 gigawatts. Oncor holds nearly $6 billion in collateral from large load customers, with over $2 billion specifically for batch zero submissions, and approximately 8 gigawatts of this load is already connected and ramping up.

    03

    California Wildfire Liability Legislation

    Policymakers in California are focused on improving livability, housing accessibility, and affordability, and creating a more vibrant insurance marketplace. The company believes that addressing this broader ecosystem will lead to a more durable wildfire framework, ensuring utility providers remain financially strong. Management expressed optimism for solid legislation during the current session, emphasizing the focus on good public policy for the state.

    04

    Sempra Infrastructure Updates and Portfolio Optimization

    Sempra Infrastructure continues to make progress on key projects, with Port Arthur LNG Phase 1 and 2 remaining on time and on budget. The pending sale of a 45% equity stake in SI Partners is expected to close later in Q3 FY26, which will simplify the business model, recycle capital into regulated utilities, and deconsolidate approximately $9 billion of debt. Additionally, the sale of Ecogas in Mexico is on track to close later this month following critical regulatory approval.

    05

    Leadership Rotations

    Sempra announced leadership rotations, with Karen Sedgwick appointed as the incoming CEO of Southern California Gas Company and Justin Bird as Sempra's incoming Chief Financial Officer. These changes reflect Sempra's tradition of leadership development and are expected to become effective around the close of the SI Partners transaction later this quarter.

    AI-generated summary of the company’s earnings call. Not investment advice.