The paragraph details the opening of Sempra's Fourth Quarter 2024 Earnings Call led by Glen Donovan. It mentions that the call is being recorded and streamed live on their website. Key members of Sempra's management, including CEO Jeff Martin and other executives, are present. Glen Donovan reminds listeners that forward-looking statements will be discussed, which may differ from actual results due to various factors outlined in the company's recent 10-K filing. Earnings are presented on a diluted basis, and non-GAAP financial measures will be used, with a reconciliation available in the presentation slides. The content of the forward-looking statements is only applicable as of February 25, 2025, with no obligation to update them in the future.

The paragraph discusses a company's financial reporting for Q4 and the full year, emphasizing a strategic plan for growth over the coming decade. Jeff Martin describes the structure of the call, which includes more content and diverse executive presentations based on investor feedback. He reviews the accomplishments of 2024 and outlines the corporate strategy, followed by leaders of three business segments discussing developments and plans. Karen is set to present financial results and a new five-year capital plan. The 2024 adjusted EPS is reported at $4.65. The 2025 financial forecast includes adjustments for factors like California rate cases, interest rates, commodity prices, and operations and maintenance costs, with an added focus on Texas due to its anticipated population growth by 2045.

From July 2023 to July 2024, Texas saw a population increase of over half a million residents, boosting demand for electricity and creating opportunities for infrastructure investment by Oncor. To support this growth, Oncor plans to file a comprehensive base rate review this year, potentially strengthening its financial position for future investments. Consequently, the company's full-year 2025 EPS guidance range is adjusted to $4.30 to $4.70, reflecting lower expectations, but positioning 2025 as a foundation for future growth. Additionally, Oncor announces a 2026 EPS guidance range of $4.80 to $5.30, equating to approximately 12% growth from the midpoint of the 2025 guidance. The company also anticipates robust earnings growth from Sempra Texas, prompting an increase in its projected long-term EPS growth rate to 7% to 9%. Oncor will update this growth rate annually during its February year-end calls.

The paragraph announces that Sempra's board has approved a dividend increase for the fifteenth year, raising it to $2.58 per share. In 2024, Sempra advanced its five-year capital plan by investing nearly $10 billion across its business lines and achieved adjusted earnings of about $3 billion. The utility rate base reached $56 billion by the year-end. A new record $56 billion capital plan for 2025-2029, a 16% increase from the previous plan, has been unveiled, with over half allocated to Oncor due to significant customer growth. Essentially, 90% of this plan is dedicated to investments in regulated utilities. In California, SDG&E and SoCalGas received favorable rate cases promoting essential investments, while in Texas, Oncor's $3 billion system resiliency plan was approved, showcasing effective collaboration and regulatory support. Oncor has started implementing the plan and anticipates further growth opportunities.

The paragraph discusses Allen's $36 billion capital plan, highlighting expected investments from 2025 to 2034. It emphasizes the importance of 2024 for Sempra Infrastructure's construction projects like ECA LNG Phase 1 and Port Arthur LNG Phase 1. Utility capital investments have grown steadily, but energy demand is rising due to economic expansion post-COVID, reshoring of industry, and increased investment in technology infrastructure. Consequently, utilities are ramping up investments, with $200 billion anticipated in 2025 alone, signaling a potential "super cycle." Sempra's 16% annual growth in its five-year capital plan positions it well in favorable markets, focusing on disciplined investments for quality returns and reducing risks.

The paragraph discusses the company's strategic focus on transmission and distribution investments, aiming to enhance future growth and generate consistent cash flows from regulated utilities. The company is launching a $56 billion capital plan to achieve 10% annual rate-based growth, with a particular emphasis on expansion in Texas, resulting in increased long-term EPS growth estimates of 7% to 9%. Allen Nye provides a business update for Oncor, highlighting a successful year with $4.7 billion in deployments and a 15% rate base growth. A comprehensive base rate review is being considered due to changing market conditions. In 2024, Oncor made significant progress in its operations, including building and upgrading T&D lines, increasing customer premises, and witnessing 4% growth in electricity volumes delivered.

The paragraph highlights Oncor's recognition by the EEI for its effective storm response in May 2024 and discusses its long-term growth prospects. Oncor experienced a 27% growth in new interconnection requests in 2020, indicating future investment opportunities. As of the end of 2024, commercial and industrial load seeking interconnection increased substantially, with a 250% rise from 2023, totaling 137 gigawatts. Oncor holds over $2 billion in collateral under signed agreements, showing commitment from generation and C&I customers. The projected load increase is considered in Oncor's capital planning, and they provide ERCOT with confident projections, including a 25-gigawatt projection through 2030.

The paragraph discusses Oncor's updated projections and capital investment plans. The company has increased its high-confidence projection to 29 gigawatts through 2031 due to more customers progressing towards interconnection agreements, with the potential to raise the 2031 peak load by 36 gigawatts from commercial and industrial (C&I) transmission customers. This year, Oncor announces a new five-year capital plan of $36 billion, a 50% increase from the previous plan, to support widespread growth across its vast 54,000 square mile service territory, which includes the DFW metroplex, West Texas, and the I-35 corridor. The company's investments, fueling both residential and C&I growth, include $3 billion for the SRP, $2 billion for local projects for Permian Basin Reliability, $1 billion for transmission in West Texas, $2 billion for interconnection of generation and large C&I, and $4 billion for distribution and other needs.

The article discusses Oncor's capital investment plan, which allocates over 60% of its budget to transmission projects in Texas to meet growing energy demands, with an additional 27% dedicated to distribution investments. The plan includes $3 billion for the SRP, which has favorable capital recovery, supporting a resilient electric grid. The $36 billion CapEx plan encompasses major approved transmission projects, including $2 billion for the Permian Basin Reliability Plan, and projects with customer agreements, like data centers. Oncor has the potential for an additional $12 billion in projects from 2025 to 2029, covering various updates and regulatory-approved projects in Texas.

The paragraph discusses the ongoing evaluation by ERCOT and the PUCT of the optimal voltage level for import pathways as part of the Permian Basin Reliability Plan. Decisions regarding transmission investments are expected in the second quarter, with targeted in-service dates from 2030 onward. An update to the SRP is planned for 2027 to address grid resiliency and security further. The vision includes developing a statewide EHV superhighway, which may be cost-equivalent to a 345 kV solution but with added benefits. Guidance from the PUCT is expected in the first half of the year. Oncor anticipates significant transmission construction beyond the current five-year plan, with projected investments between $55 billion and $75 billion from 2030-2034, continuing growth trends in Texas. The speaker emphasizes preparation for increased capital spending.

Oncor has been strategically expanding its supplier base, inventory, and workforce over the past five years to enhance its growth potential and operational excellence, resulting in improved safety metrics. Karen Sedgwick then reports on Sempra California's 2024 achievements, particularly receiving a final decision in their general rate cases, allowing them to focus on providing safe and reliable energy. Additionally, SDG&E became the first California utility to earn the prestigious Cal OSHA VPP safety certification for exemplary safety practices and injury prevention.

SDG&E has been recognized for the best electric customer reliability in the West for the nineteenth year. The California Energy Commission projects a 2.8% annual growth in electricity demand until 2030, likely benefiting customer affordability. SDG&E submitted a TO6 filing, including a California ISO adder, but FERC ruled against its eligibility, prompting SDG&E to seek a rehearing. SoCalGas is authorized to operate the Aliso Canyon storage facility at 80% capacity, signifying natural gas's role in the energy grid. Sempra California plans to invest over $22 billion by 2029 in wildfire mitigation, energy storage, smart meter replacement, new transmission lines, and infrastructure modernization to enhance safety, reliability, and affordability in the energy sector.

The paragraph highlights Sempra California's commitment to addressing growing energy demands and enhancing safety through innovative investments in wildfire mitigation. SDG&E (San Diego Gas & Electric) is recognized for having the most advanced wildfire mitigation program among global utilities, thanks to advanced technologies and risk modeling. The state of California established a Wildfire Fund in 2019 through AB 1054 to stabilize investor-owned utilities, with SDG&E contributing to it due to its low risk profile. This is attributed to SDG&E's smaller service area, favorable topography, and substantial prior investments to mitigate wildfire risk. Despite its low contributions, SDG&E continues to invest in advanced technologies and data science to further bolster wildfire defense and community protection.

The paragraph outlines updates from Sempra Infrastructure, highlighting the company's advancements in its LNG strategy. SDG&E successfully managed recent extreme weather events without significant utility-caused wildfires in over 17 years. Meanwhile, Sempra has made progress in constructing ECA LNG Phase 1 and Port Arthur LNG Phase 1, ensuring these projects support natural gas delivery to Pacific and Atlantic markets. Financial results for 2024 met high-end expectations, with ECA LNG Phase 1 on track for completion by spring 2026. The GRO pipeline reached commercial operation, and Port Arthur LNG Phase 1's construction is proceeding on schedule. Additionally, Port Arthur LNG Phase 2 is under development, with a notable agreement with Aramco for offtake and equity interest.

The paragraph provides an update on Sempra Infrastructure's ongoing LNG and renewable energy projects. It highlights the fixed-price EPC agreement with Bechtel and the targeted Final Investment Decision (FID) for 2025 due to significant interest in expanding capacity. It reports on Cameron's operational optimization reaching a 98% reliability rate in 2024 and progress at Port Arthur LNG Phase 1 with an active construction workforce targeting operations in 2027 and 2028. The ECA LNG Phase 1 project is 90% complete, focusing on final testing and pre-commissioning. Sempra's updated capital plan includes $4 billion in spending through 2029, emphasizing investments in LNG assets and infrastructure with projected 16 MTPA capacity, while also investing in high-return renewable projects like Cimarron.

The paragraph discusses the expansion plans for the Port Arthur LNG Phase 2, highlighting its expected benefits from scale and existing facilities, resulting in lower costs and risks. The company has secured an HOA with Aramco for half of the offtake and project equity, with additional interest from other customers. Stakeholders, including ConocoPhillips, are supportive of the project. The company aims to make a final investment decision later this year, contingent on commercial agreements, permits, and financing. Over the long term, the focus is on expanding a dual-basin LNG strategy to potentially export up to 90 million tons per annum, driven by strong market demand through 2040.

The paragraph discusses LNG demand growth, projecting an increase of up to 350 million tons per annum by 2050, which Sempra believes will provide value to its shareholders. The financial update reports that Sempra's fourth-quarter 2024 GAAP earnings were $665 million ($1.04 per share), down from $737 million ($1.16 per share) in the same quarter of 2023. However, adjusted earnings for the fourth quarter of 2024 increased to $960 million ($1.50 per share) from $719 million ($1.13 per share) in 2023. For the full year 2024, GAAP earnings were $2.817 billion ($4.42 per share), down from $3.030 billion ($4.79 per share) in 2023, while adjusted earnings rose to $2.969 billion ($4.65 per share) from $2.920 billion ($4.61 per share) in 2023. The variations in 2024 earnings were impacted by factors such as increased electric transmission margins, income tax benefits, and customer growth, offset by higher interest and operating expenses and lower consumption due to mild weather.

The paragraph discusses Sempra Infrastructure's recent financial performance and future investment plans. The company experienced a decline in transportation earnings due to new tariffs and lower volumes in the renewables sector, partially offset by reduced net interest expenses and higher tax benefits. Sempra Parent also saw a decrease in net earnings due to increased net interest expenses and lower tax benefits. Looking ahead, Sempra is planning a $56 billion capital investment over the next five years, focusing 90% on T&D infrastructure for regulated utilities, with significant growth in Texas aided by an improved regulatory framework. Sempra California is addressing its energy delivery goals, and the company's long-term, contract-based infrastructure platform offers attractive risk-adjusted returns. Despite growth potential, Sempra emphasizes a disciplined capital allocation and efficient financing strategy.

The paragraph outlines a capital plan projecting a rate base increase from $56 billion in 2024 to over $91 billion by 2029, reflecting a 10% annual growth rate. The plan focuses on key investments in Texas, utilizing a combination of cash flows, debt, and equity issuances for financing. In 2023, the company sold $1.3 billion in common stock and established a $3 billion ATM program, raising $270 million in equity. The strategy is designed to support credit ratings with early equity issuance and later share repurchases. The company emphasizes its consistent dividend strategy and balance sheet strength. The paragraph concludes with an explanation of capital recycling to enhance its regulated business over time.

The paragraph discusses Sempra Infrastructure Partners' future opportunities in project equity, joint ventures, and asset sales, emphasizing their commitment to shareholder value and increasing dividends for the fifteenth consecutive year. They also revised their 2025 earnings guidance to $4.30-$4.70 due to Oncor's base rate review, which impacts earnings but is a strategic decision during a growth cycle. The guidance is also affected by regulatory changes, including a decreased return on equity at Sempra California and the removal of an adder to transmission-related ROE by FERC. Despite short-term challenges, the company anticipates long-term growth benefits.

The paragraph discusses Sempra Infrastructure's financial outlook and guidance, noting a delay in the ECA LNG Phase 1 project and changes in natural gas price assumptions, which are partly mitigated by improved transportation capacity. For 2026, the company projects earnings over $3.3 billion, driven by new project operations and increased investments by Oncor. They're also expecting EPS of $4.80 to $5.30, with a long-term EPS growth rate of 7% to 9%. The CEO, Jeff Martin, highlights that the company's growth is aligned with GDP trends, showing a historical growth in the utility sector's earnings slightly above GDP growth rates.

The paragraph discusses Sempra's financial growth and strategic focus. Sempra has outpaced US GDP and the utility sector in adjusted earnings per share, with a long-term growth forecast of 7% to 9%. The company attributes this success to a clear strategy, disciplined capital allocation, and efficient capital sourcing. Sempra has delivered a 21% total return in 2024 and 45% over the past three years, outperforming the utility sector. The company's growth strategy now emphasizes increasing investments in the Texas market, aiming for Texas to contribute half of its earnings by the end of the decade, supported by a $56 billion five-year capital plan centered around Texas.

The paragraph discusses Sempra's success in achieving strong total returns compared to the utility sector and broader market, emphasizing the importance of investing in good businesses and smart cash flow allocation for long-term value creation. It acknowledges recent changes in planning assumptions, such as lowered 2025 guidance due to regulatory decisions in California and Texas, and altered expectations regarding returns on transmission assets. Despite these challenges, the company remains optimistic about achieving a 6% to 8% growth rate from 2024 actuals. The speaker apologizes for any frustration caused and invites questions from the audience.

Sempra has raised its long-term growth expectations, aiming for a 7% to 9% growth rate, and expects to grow earnings per share by 9% or higher over the next five years. The company anticipates significant growth in earnings contribution from Texas, particularly through Oncor's rate base, which is expected to double. Sempra is confident in exceeding its growth targets through increased operating cash flows, an additional $12 billion capital plan between 2025 and 2029, anticipated progress on Port Arthur Phase 2, and enhancements within its utility segments related to regulatory and capital improvements.

The company has lowered its guidance for 2025, though it anticipates stronger earnings per share growth of 9% or more through 2029, primarily driven by Sempra Texas. During a call, Shar Pourreza from Guggenheim Partners asks about the impact of this guidance revision on rate-based growth in California, the cost in Texas, and natural gas sensitivity for 2025. In response, Jeff acknowledges the revised guidance is lower than expected but believes it's a sound business decision, especially with an earlier base rate review for Oncor. The response confirms the concerns with a "yes" to the first two points, while the third remains undisclosed. Karen Sedgwick is asked to provide further details on the 2025 guidance.

The paragraph discusses the completion of a five-year plan for a board, focusing on key business areas. At Sempra Texas, a decision is made to file a base rate review earlier than planned due to rising costs and growth, which, although creating a negative impact for 2025, is deemed beneficial for future growth. In California, the financial forecast is adjusted following a lower-than-expected decision on the General Rate Case (GRC) and a reduced authorized return on equity, resulting in downward pressure on projections. Additionally, at ECA LNG, commercial operations have been rescheduled to spring 2026. The Parent company is facing increased interest expenses due to the growing capital plan and changes in interest rates, necessitating a reset of 2025 financial guidance. Finally, natural gas price assumptions have decreased throughout the plan period.

In the paragraph, Shar Pourreza asks about the implications of potential growth in Texas, specifically regarding the Port Arthur projects, on the company's forecasted growth rates between 2025 and 2029. Jeff Martin responds, asserting confidence that the company expects to achieve a compound annual growth rate (CAGR) of 9% or higher within that period, although they typically guide their earnings per share (EPS) forecasts between 7% and 9%. Nick Campanella from Barclays then questions the correlation between a 1% increase in the rate base CAGR and a significant reduction in EPS expectations. He notes a contradiction, stating that even with the high end of the growth plan (7% to 9%), the company might not return to prior growth expectations until 2029.

The paragraph is a discussion about the rationale behind making significant investments and the impact on shareholders. Jeff Martin responds to Nick's question by explaining that while maintaining a 6% to 8% long-term EPS growth rate was possible, the company anticipates even greater sustained growth. They expect to produce growth over 9% and are focusing on achieving higher earnings per share than historically seen. While acknowledging the initial financial impact, Martin expresses confidence in exceeding expectations by 2025 and continuing growth through 2029. He cites the company Oncor as a key example, highlighting their $36 billion base plan covering specific approved investments, regulatory-approved capital investments, and capital for large transmission requests.

Between 2025 and 2029, Oncor management plans to invest an additional $12 billion in capital, which could lead to $400 million to $500 million in increased earnings. This is based on their return on equity and equity layer. Key investment areas include updating their system resiliency plan for 2028 and 2029, transmission investments in the Delaware Basin Load Integration Plan awaiting regulatory approval, and projects linked to the Permian Basin Reliability Study. Other initiatives involve signing interconnection agreements, projects identified in ERCOT's Strategic Transmission Expansion Plan, and maintenance upgrades. Since acquiring the majority of Oncor in 2018, Oncor's rate base has increased from $12 billion to $26 billion and is expected to reach $52 billion by 2029. In total, Oncor aims to invest about $48 billion in its electrical network by 2029.

The paragraph discusses the company's equity and financing strategy, emphasizing the efficient use of operating cash flow as a primary financing source. They plan to issue new debt, hybrids, and use an ATM program for additional equity financing. The company is evaluating asset sales, particularly focusing on their Mexican assets, to raise funds. They expect to issue $2 billion to $3 billion in net equity, assuming asset sales exceed $1 billion, and this plan is detailed on slide thirty-three.

The discussion involves Steve Fleishman from Wolfe Research inquiring about the company's financial metrics, specifically the FFO (Funds From Operations) to debt ratio for 2024 and 2025, and if they have communicated their plans to rating agencies. Jeff Martin and Karen Sedgwick explain that they work closely with rating agencies and are below the desired metrics for 2024. They plan to address this with equity measures and have added $3 billion in hybrid financing. They aim to meet and exceed the 15% target set by S&P and are confident in achieving their goals by 2025 through their outlined financial strategies.

The paragraph discusses the earned Return on Equity (ROE) for a company operating in Texas. Jeff Martin explains that the company has a 9.7% authorized ROE but currently faces a regulatory lag that affects its earned ROE, keeping it between 8% and 9%. This lag is partly due to using a backwards test year based on 2021 costs. To improve ROEs, the company plans to adjust its cost structure and file for more frequent rate cases due to significant growth in its delivery capability. Martin expresses confidence that ROEs will increase across the planning period, with expectations of achieving rates closer to 9% or slightly higher by the end of the cycle. Steve Fleishman then inquires about the company's projected 9% growth rate, up from the previous 7% to 9% range.

In the paragraph, Jeff Martin discusses the strategy for achieving a 9% growth target, emphasizing the need for effective capital allocation and improved regulatory outcomes. He highlights the plan to focus on growth in the Oncor and Sempra Texas segments, acknowledging the impact of regulatory decisions on their financial plans. Martin recognizes the need for earlier financial planning and disciplined capital allocation. He admits that expectations for 2025 and 2026 have been lowered, but commits to exceeding those expectations by focusing on long-term business strategies and improvements.

The paragraph discusses the company's stronger earnings potential compared to the previous year, emphasizing improved long-term growth prospects beyond the 2029 plan. The speaker highlights the need for better transparency with investors to ensure they share the company's confidence in this growth. The dialogue continues with an analyst, David Arcaro, asking about the point at which the company expects its earnings per share (EPS) growth to align with a previous target of 6% to 8%. Jeff Martin responds by stating that while exact guidance on when this crossover will occur is not provided, the company has revised its long-term EPS growth expectations positively. They anticipate surpassing the previous growth rate within the current five-year planning period, aligning with their belief in strong business growth capabilities.

The paragraph discusses the outlook and challenges for Texas and California utilities in light of legislative changes. Jeff Martin highlights growth in the Texas utilities sector, crediting a positive legislative session from two years prior. Allen Nye elaborates on the unprecedented growth, noting a 2% annual premise growth and a significant 5% increase in new premises in 2024 compared to 2023. He also emphasizes a record number of new and active transmission points of interconnection, which increased by about 28% in 2024 from 2023. David Arcaro acknowledges these insights but also brings attention to active legislative landscapes in Texas and California, indicating potential impacts on financial profiles and wildfire funding.

The paragraph outlines the projected growth in power demand for 2024 and 2025, focusing on two categories: generation and Large Commercial and Industrial (LC&I). Generation is expected to increase by 8% in 2024 compared to December 2023, while LC&I demand shows a significant rise, with 2024 numbers up 62% and a 250% potential increase compared to December 2023. The LC&I demand is mainly driven by data centers, accounting for 119 gigawatts out of 137 total. In 2024, they submitted 25 gigawatts as high-confidence load to ERCOT, rising to 29 gigawatts in 2025. This high-confidence load, alongside signed agreements, suggests a potential new load of 36 gigawatts on a system currently peaking at 31 gigawatts, implying a possible 200% increase by 2031. The anticipated growth does not factor in residential, small commercial, or oil and gas sectors. The paragraph also notes that their $36 billion five-year capital plan includes 12 gigawatts of LC&I load, with 8.5 gigawatts being data-related. They expect this to become part of their base plan.

The paragraph discusses the strong growth in electricity demand in West Texas, with significant increases in peak levels for 2024 compared to 2023. Allen Nye highlights the ongoing Texas legislative session, focusing on issues like the backlog and cost related to large load customers. He emphasizes the importance of legislative proposals like HB 2668 to stabilize utility finances and address utility liabilities amidst challenging weather events. Overall, he expresses confidence in Texas's public policies benefiting both customers and shareholders. Jeff Martin thanks Allen and indicates a future discussion on legislation in California.

The paragraph discusses the financial backstop provided by AB 1054, which has contributed to market stability and efficient capital raising for utilities over the past five years, ultimately reducing costs for customers. The speaker expresses confidence in efforts to address wildfire risks in California, noting that it is a broader societal issue, not just a utility problem. It highlights that SDG&E has not caused significant wildfires in 17 years and has effectively managed extreme weather conditions, indicating potential for further legislation. The importance of running businesses safely to protect communities is emphasized. The conversation transitions to Ross Fowler from Bank of America for further questions.

The paragraph discusses the financial challenges and adjustments related to recent regulatory and project developments. Jeff Martin and Karen Sedgwick address Ross's question about the impact of various events, including the delay of the ECA LNG Phase 1 project and the California GRC PD outcome, on their 2025 financial guidance. Sedgwick explains that while they finalized their plan recently, they had to deal with unexpected financial pressures, particularly from the less favorable final California rate case decision in December and the need to maintain funds on their balance sheet longer than anticipated. Overall, these factors contribute to financial strain and the need for further adjustments in their financial planning.

The paragraph discusses financial challenges and adjustments faced by a company, particularly in California and Texas. In California, the cost of capital and an unexpected FERC ISO adder caused financial impacts. In Texas, anticipated higher costs related to capital growth, insurance, and operations led to a decision affecting earnings in 2025, believed to be the right move for future earnings. Additionally, unexpected growth in Texas necessitated increased interest at the parent company to fund this growth. The paragraph also touches on growth projections from 2025 to 2026, questioning how to interpret the growth rate base in light of these developments. Jeff Martin and Ross Fowler discuss these financial implications and strategies for future growth.

In the paragraph, Jeff Martin discusses the challenges and expectations for long-term EPS growth for a company. He mentions that after years without a long-term growth rate, they reintroduced it in 2022 to reflect sustained growth over seven to ten years. He highlights a raised growth expectation for the 2030 to 2034 period and aims to achieve or exceed the high end of growth expectations for 2025 to 2029. Martin acknowledges that earnings growth won't be linear, with some years experiencing higher growth than others. While current growth in 2025 is lower, there is confidence in achieving higher growth over the long term, despite frustrations. The company plans to focus on improving projections in the coming years.

The paragraph features a discussion between Ross Fowler and Jeff Martin about the company's project timeline and expectations. Jeff Martin acknowledges that growth variance is influenced by the timing of project completions, and he mentions the decision to move ECA Phase 1 out of 2025 to maintain guidance. Despite recent events causing a reassessment of their 2025 outlook, he expresses confidence in exceeding long-term growth expectations, although there's a need to improve short-term performance. Carly Davenport from Goldman Sachs then asks about upcoming regulatory filings related to the cost of capital in California. Jeff Martin responds that while there have been changes affecting returns, the company's planning assumptions remain consistent with their current plan.

In the discussion, Jeff Martin addresses the plan for more frequent Oncor rate case filings, explaining the past occurrences and future expectations. He notes that the last two rate cases were delayed and finalized in May 2023, with Oncor's costs being based on 2021 data. The delay and cost increases have pressured Oncor's return on equity (ROE). Martin advocates for a rate case now to improve their financial standing and projects positive financial outcomes by 2026, despite initial downward pressure for 2025. Carly Davenport appreciates the insights, and Anthony Crowdell is introduced for the next questions.

The paragraph discusses the future regulatory filings and rate cases for a company in California, including a planned filing in 2026 for new rates in 2028. Jeff Martin expresses confidence in the company's plan, citing the use of a forward test year in California and potential improvements in returns, particularly with a pending Federal Energy Regulatory Commission (FERC) decision. He highlights opportunities related to earned return on equities (ROEs), capital structure, and regulatory frameworks in Texas, California, and with FERC. Martin acknowledges Anthony Crowdell's concern that some investors might underestimate the company's earnings potential by simply applying a straightforward growth factor to last year's numbers.

In the conversation, Jeff Martin discusses the company's approach to providing annual earnings guidance. He acknowledges that their earnings have not been historically linear, which has led to misunderstandings. In the past, they provided guidance for the first two years and a fifth-year estimate, but currently, they focus on guidance for years one and two. Martin expresses confidence in meeting or exceeding their long-term EPS guidance and emphasizes the importance of reducing knowledge asymmetry between the company's plans and Wall Street's understanding. He is open to exploring ways to improve transparency. The conversation ends with Jeff thanking Anthony Crowdell for his questions and the operator introducing the next question from Paul Fremont.

The paragraph discusses concerns about the cost of capital and possible changes related to California legislation on wildfire funds. Jeff Martin expresses confidence that their current cost of capital will remain similar but sees potential for exceeding expectations. In terms of wildfire fund replenishment, Martin mentions various ideas being considered, such as extending CWR bonds to create a perpetual fund or involving large municipal utilities in creating separate wildfire funds. He emphasizes that wildfires are a societal issue, not solely caused by utilities, and highlights ongoing efforts, involving consultants like Guggenheim, to address the situation.

The paragraph discusses a utility company's perspective on enhancing a fund with low contributions and liability caps, emphasizing the importance of running a safe business and the company's willingness to support legislation to improve the fund structure. Paul Fremont inquires whether new legislative measures might take up to two years, to which Jeff Martin responds that he can't predict the outcome but notes that progress is being worked on and suggests that reinforcing AB 1054 would positively impact Wall Street confidence and lower costs for ratepayers. Paul Fremont then asks about the 2026 financial guidance, pointing out that benefits at Oncor are offset by losses at the parent company, and Jeff Martin requests clarification on the question.

In the paragraph, Paul Fremont and Jeff Martin discuss the financial outlook for Sempra Texas, noting that projected improvements in 2026 might be offset by additional losses at the parent company. Jeff Martin explains that the parent company's cost structure involves various financing strategies like hybrids, traditional mechanisms, and equity, and emphasizes the goal of enhancing earnings from all business segments over a five-year plan. He assures that they will strive to exceed the 2026 targets. The conference call concludes with Jeff Martin expressing appreciation for participants despite competing calls, mentioning upcoming investor conferences in New York as a chance to engage further with Oncor and the senior team, and inviting follow-up questions to their IR team. The operator then closes the call.

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