Asking about the timing of Oncor's CapEx update and the impact of ECA LNG delays, and if it affects the SI transaction.

Jeff Martin stated that the roll-forward capital plan for Oncor is expected to increase, with flexibility in sequencing projects. Justin Bird confirmed ECA LNG Phase 1 substantial completion is now expected in Q4 2026 due to equipment damage, but this is not a condition precedent for the SI transaction. “Given where we are, we expect the project to reach substantial completion into the fourth quarter of 2026 with sales under our long-term sale and purchase agreements commencing shortly thereafter. So we don't anticipate additional delay after that at [ ECA. ] And again, [ ECA ] is not the -- sorry, the substantial completion of [ ECA ] is not a condition precedent under the SI transaction.”

Seeking color on recent political commentary regarding 765 kV approval and potential risks or changes.

Jeff Martin and Allen Nye stated they remain constructive, emphasizing the focus on integrating landowner concerns and ensuring a durable framework for capital investment. They highlighted efforts to engage landowners and officials, noting that if it takes more time for a durable framework, it's time well spent. “The key theme that I think you're hearing people focus on, Steve, is, if it takes a little bit more time in the process stage to get to what we think is a durable framework that allows us to invest capital with more certainty. We think this process will be time well spent.”

Asking for an update on California wildfire liability legislation and confidence in a constructive outcome.

Jeff Martin and Caroline Winn expressed optimism for solid legislation this session, emphasizing the focus on public policy, livability, and financial health of utilities. They noted it's premature to comment on specific bill language but are constructively engaged. “I actually think we're going to get some solid legislation in this session, and I'm really pleased with the leadership that we're hearing from key folks. I don't want to get ahead of the process. Caroline is absolutely right. There's a long way to go. We want to see the text language. It's a very complicated exercise. But the reason I'm constructive is, I think it's the right thing for the state.”

SRE

Sempra (SRE) Q2 FY26 earnings call: the analyst Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Aug 6, 2026

Source: earnings call transcript

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

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

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

Segment	Revenue	YoY	QoQ	Margin
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

Orderbook & backlog

ERCOT Batch Zero Large Load Requests 44 GW Q2 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

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.

Ecogas Sale of Ecogas in Mexico

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

Capital programs

Oncor 5-year Base Capital Plan underway $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

ECA LNG Phase 1 Commissioning Delay Q4 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 Delays Beyond 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 Process Ongoing

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 Framework Current 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

SI Partners Transaction Close

Q3 FY26

Current Pending regulatory approval

Target Closed

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.

Find out whether SRE delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.