The operator welcomes listeners to Sempra's second quarter earnings call and introduces the members of the management team present. The company reminds listeners that they will be discussing forward-looking statements and encourages them to review the company's recent SEC filings. They will also be discussing non-GAAP financial measures and will provide reconciliation to GAAP measures. The company does not assume any obligation to update forward-looking statements in the future.

In the second half of the year, Sempra is focused on safety and operational excellence and is confident in their projected long-term EPS growth rate. In California, they are making investments to improve safety and support cleaner energy, and are anticipating a final decision on their general rate cases. In Texas, Oncor is seeing growth in various industries and is executing a record five-year capital plan to improve system resiliency.

Sempra Infrastructure is expecting to see higher levels of capital spending in the future due to the growth in their service territory. They are also focused on advancing critical infrastructure investments and have had a great start to the year. Their corporate strategy includes positioning their portfolio in attractive markets and focusing on transmission and distribution investments to improve earnings and reduce risk. They are affirming their full year 2024 and 2025 EPS guidance ranges.

The company aggressively competes for capital across all three growth platforms to ensure the best returns for owners. They have been successful in delivering a 10% adjusted EPS compound annual growth rate since 2018. The growth story in Texas, particularly in the Oncor service territory, is unfolding rapidly. In the second quarter, they built, rebuilt, or upgraded 1,050 miles of T&D lines, increased their premise count by 20,000, and received 100 new transmission POI requests. They are also making progress on their five-year capital plan of $24 billion. They have also filed an SRP with the PUCT and are focused on reliability, resiliency, and response in light of the increasing frequency and intensity of severe weather events.

The SRP has identified seven measures to address various resiliency events, including extreme weather, wildfires, physical security threats, and cybersecurity threats. These measures include expanding distribution automation, retrofitting older portions of the system, and increasing vegetation management efforts. These efforts will also help mitigate the risk of wildfires and build upon collaborations with experts in the field.

Oncor is taking multiple measures to improve their resiliency and preparation for extreme weather events, including filing an SRP and sending mutual assistance workers to the Gulf Coast. The company is also focused on meeting customer expectations for safe and reliable electricity delivery and has a plan for future growth driven by interconnection requests from large C&I customers. To support this growth, Oncor has diversified their supplier base, entered into multi-year agreements, and invested in warehousing and lay down yards.

The paragraph discusses ERCOT's projections for future peak load in 2030 and Oncor's expected share of that load. It also mentions the continued electrification efforts in the Permian Basin and the potential for higher capital spending in the future. The focus remains on providing reliable, affordable electric service while maintaining safety. The following slide will cover Sempra California's business update, highlighting the state's supportive regulatory environment and investment opportunities.

SoCalGas is working on decarbonization initiatives to support California's climate goals, including the ARCHES project which aims to produce 17 million tonnes of hydrogen per year. SDG&E is focused on community safety and has made significant investments in wildfire mitigation. The company has also upgraded its wildfire and climate resiliency center with advanced technology. SDG&E is preparing to file its fifth transmission owner formula rate mechanism with FERC.

SDG&E is expected to make a submission in the fourth quarter with an effective date in 2025 and Sempra Infrastructure's long-term strategy is focused on capitalizing on the growing demand for cleaner and more secure energy. The delay in commercial operations for ECA LNG Phase 1 until the spring of 2026 is due to labor retention and productivity issues, but the company still expects to maintain strong financial returns. Progress is also being made on Port Arthur LNG Phase I, with FERC authorization for 24/7 construction expected to improve efficiency.

At Cameron Phase 2, we are working to improve cost efficiency through value engineering and have started construction on Cimarron Wind. Our experience in Mexico has shown our ability to work well with regulators and legislators, and we are excited to support their increasing energy needs. We have also made progress at Port Arthur Phase 2, including an HoA with Aramco and a fixed price contract with Bechtel. This project has received all necessary permits except for one, but we do not anticipate any delays. Sempra reported strong financial results for the second quarter of 2024.

The company is pleased with their financial results for the second quarter of 2024, which are higher than the same period last year. The increase in earnings is primarily due to higher CPUC base operating margin and rate updates in Sempra California and Texas, respectively. However, there were also some decreases in earnings from lower income tax benefits and higher expenses. The company is still awaiting a final decision on their GRC, which will impact their revenues for the year. Overall, the company is on track to deliver strong financial performance for the year and their corporate strategy is proving successful.

The speaker discusses the company's commitment to safety and operational excellence in delivering energy in North America. They mention their position as a leader in economic markets and their plans for future growth. The speaker also addresses a question about project delays and how they will affect the company's 2025 guidance. They express disappointment in the change of schedule and emphasize their expectation for projects to be completed on time and on budget.

The speaker discusses the recent changes at ECA and reassures that the company is still on track to meet its financial targets. They mention utilizing available pipeline capacity and driving operational efficiencies to meet these targets. They also mention growth opportunities and increasing productivity across the enterprise. The speaker also mentions that they will provide updates on their plan later in the fall and that they are confident in a timely outcome for the GRC in 2024.

Jeff Martin, the CEO of Sempra Energy, was asked about the potential delay in a final vote on the company's rate case. He responded by saying that they have a strong GRC filing for both of their businesses, which align with the state's priorities. He also mentioned that they reached a settlement on a third of the rate cases last fall and are expecting a final decision before the end of the year. Martin expressed confidence in the rate case being voted on this year and said that they have a good track record of working with regulators and stakeholders. He also mentioned that they will provide an update on their forward guidance and capital plan on their Q4 call, and potentially give more visibility on changes in their capital plan on their Q3 call.

Jeff Martin and Durgesh Chopra discuss the estimated costs and schedule changes for the ECA project during a call. The estimated increase in capital for Sempra's net share is expected to be around $300 million due to the schedule change. However, the company still expects to maintain targeted levered returns in the mid-teens. The schedule change also provides opportunities for the company to optimize their transportation position and take advantage of inflation protections in their SPAs.

The speaker discusses the company's project and schedule changes, expressing disappointment but confidence in meeting expectations. They provide details on the project's progress and the reason for the schedule change. They also mention a settlement in Texas and potential backlash from stakeholders.

The company is pleased with the timing of the agreement in principle, which is an all-party settlement. They have a history of dealing with extreme weather events and are happy with Oncor's recent storm response. The settlement will allow them to continue to harden their system and is a positive outcome for Oncor's customers. The caller, Julien Dumoulin-Smith, asks about the SRP and how it fits in with the company's plans for expansion, especially in light of Beryl and potential mobile gen projects. The company acknowledges the ever-evolving landscape and the need to adapt, which was considered in the previous legislative session.

Jeff Martin expresses his views on the SRP and states that he has never seen a growth story like the one in Texas. He also mentions the $3 billion capital investment and the preliminary settlement reached by Oncor. He cautions against speaking about the details of the settlement and passes the floor to Allen to discuss the procedural next steps.

Allen Nye and Jeff Martin are excited to announce the settlement in principle of their SRP case. They thank the parties involved, especially PUC staff, for their cooperation. Next steps involve drafting a definitive settlement agreement and having the case remanded back to the PUC for consideration. Assuming approval, they plan to begin making SRP-related investments and expenditures by late 2024. They believe this settlement will provide all the benefits originally identified and is a positive development for the company and customers. Jeff Martin will also be meeting with the governors of Louisiana and Texas to emphasize Sempra's commitment to investing in the state.

The speaker discusses their company's investments in the state of Texas and their focus on reliability and resilient infrastructure. They also mention their commitment to achieving positive outcomes for their customers and their excitement for future projects, including Port Arthur LNG Phase 1 and Phase 2. They clarify that the recent developments in ECA do not impact Port Arthur LNG Phase 1, and they are confident in their EPC contract with Bechtel. The issues encountered in ECA were specific to the craft market in Baja California.

The speaker, Justin Bird, discusses the progress of Port Arthur Phase 2 in Texas, including recent announcements of a fixed price EPC agreement with Bechtel and an HoA with Saudi Aramco. He also mentions positive commercial discussions and progress on permitting. He concludes by stating that Port Arthur Phase 2 represents significant new growth opportunities for the company. Another speaker, Julien Dumoulin-Smith, expresses excitement about the project.

The speaker is responding to a question about the potential growth of Oncor in the Permian region. They mention that the Permian plan is still being discussed and a final decision is expected in the next couple of months. The speaker also mentions that Oncor is likely to be a major participant in the $13 billion to $15 billion of transmission CapEx proposed by ERCOT. They then discuss the overall growth of Oncor, breaking it down into four categories.

The paragraph discusses the strong premise growth and transmission points of interconnection for the second quarter. It mentions an increase in new requests and breaks down the categories of generation and LC&I. The growth in the West Texas weather zone is also highlighted. The paragraph concludes by mentioning the new ERCOT study and the potential for 40% of the predicted load to be in the service territory.

The company expects to invest $13-15 billion in the Permian Basin by 2038 and a significant portion of this will be funded through capital expenditures. The company's current capital plan of $24.2 billion over the next five years is mostly for growth and is recoverable through trackers. This does not include the SRP settlement, investments for large load customers, or meeting the revised ERCOT load forecast. The company is excited about opportunities to invest throughout their system and will provide an update on their capital plan in the Q4 call. Approximately 80% of the capital program is for growth and 60% is for transmission, which will help lower rate increases for consumers. Similar to California, transmission costs in Texas are socialized across all state consumers.

The speaker recaps some key points from the call, including the robust capital plan and its positive impact on growth and affordability for Texas consumers. They also mention the possibility of a rate case in the future, but state that they are not required to file one until 2027.

The speaker discusses three main points during the call. First, they highlight the increasing investment opportunities in Texas and their confidence in the state's growth. Second, they mention their strong financial performance for the first half of the year, which is ahead of their internal forecast. Finally, they express optimism about the upcoming general rate cases in California and reaffirm their financial guidance for the future. The speaker also invites listeners to reach out to their investor relations team and visit their new facility for a better understanding of their commitment to safety and operational excellence. The call concludes with a reminder of upcoming conferences where they will be present.

This summary was generated with AI and may contain some inaccuracies.