- Company name
- Sempra
- Sector
- Utilities (Texas and California)
- About
- Sempra is a US energy holding company based in San Diego. It has three parts. Sempra Texas holds an 80.25% interest in Oncor, the largest electric transmission and distribution utility in Texas, which set a record system peak demand of 33.3 GW in Q3 2026. Sempra California holds San Diego Gas & Electric (SDG&E), an electric and gas utility, and Southern California Gas Company (SoCalGas), the largest gas distribution utility in the United States. Sempra Infrastructure holds LNG export terminals, gas pipelines and energy assets in the United States and Mexico, including the Port Arthur LNG project in Texas. Sempra's networks serve nearly 40 million consumers. Its 2026 to 2030 capital plan is about $65 billion, and 95% of it goes to the Texas and California utilities.
- Thesis
- The market prices Sempra for the risks of its California utilities and for the cost of its large building plan. California utilities can be liable for wildfire damage even when they are not at fault, and the 2028 rate cases for SDG&E and SoCalGas will set their revenue from 2028. The $65 billion capital plan needs new debt and depends on the sale of a 45% interest in Sempra Infrastructure Partners to KKR for about $9.99 billion. That sale did not close in Q3 2026 as Sempra first expected; on November 5, 2026, Sempra said that it expects the close within two weeks. Results are on plan: adjusted EPS for the first nine months of 2026 was $4.07, up from $3.45, and Sempra now expects 2026 adjusted EPS at the high end of its $4.80 to $5.30 guidance. But a proposed decision of the California regulator on the SDG&E and SoCalGas rate case mechanism can put Sempra in the lower half of its 2027 guidance of $5.10 to $5.70, unless Sempra offsets it. For the gap to close, three things must be true. The KKR sale must close, so that Sempra can fund its utility plan with less new equity. Oncor must turn its large-load requests into approved grid projects; Oncor expects its 2027 to 2031 base capital plan to be about 20% larger than the current plan. The California rate cases must give fair returns without a large wildfire event. The close of the KKR sale in November 2026 is the next test. The 2027 to 2031 capital plan and the 2027 guidance with the Q4 2026 report, expected in February 2027, are the main test. If these checks pass, the gap can close over the next three to six quarters. The main reason it may not close is a major California wildfire linked to SDG&E equipment.
- Risks
- California utilities can be liable for wildfire damage caused by their equipment, even when they are not at fault. The state wildfire fund and insurance may not cover all costs of a large fire in the SDG&E area.
The sale of a 45% interest in Sempra Infrastructure Partners to KKR has closing conditions, such as lender consents and no rating downgrade events. It did not close in Q3 2026 as first planned. A further delay or a failed sale would weaken Sempra's funding plan for its $65 billion of capital spending.
The California regulator will decide the 2028 rate cases for SDG&E and SoCalGas. Lower approved revenue or returns, or political pressure on customer bills, can slow earnings growth. In Q3 2026, proposed decisions led to a $149 million charge, and a proposed decision of October 29, 2026 can lower 2027 earnings.
Oncor's growth depends on large new loads, such as data centers, and on regulatory approval of new transmission projects. If these loads do not connect as planned, capital spending and rate base growth can be lower.
- Balance sheet
- Cash: $34M
Debt: $37.5B
Net debt: $37.4B
Undrawn credit line: $5.0B, to October 2030
Debt due within 12 months: $6.0B
At September 30, 2026, Sempra had cash and cash equivalents of $34 million outside the assets held for sale. Debt outside the assets held for sale was $37.5 billion: short-term debt of $4.44 billion, the current part of long-term debt of $1.53 billion and long-term debt of $31.51 billion, including finance leases. Sempra, SDG&E and SoCalGas had $5.01 billion of unused credit on lines that end in October 2030, after $1.69 billion of commercial paper. Sempra Infrastructure Partners is held for sale, with assets of $33.6 billion and liabilities of $13.1 billion. Total Sempra shareholders' equity was $33.3 billion. In August 2026, SoCalGas issued $500 million of 5.500% bonds due 2036. The KKR sale brings a base price of about $9.99 billion before adjustments, fees and a $340 million development credit, and Sempra will keep 25% of Sempra Infrastructure Partners. On November 5, 2026, Sempra expected the sale to close within two weeks.
As of Sep 30, 2026.
- Checkpoints
- Nov 5, 2026: Q3 2026 earnings and the KKR sale. Failed. Watch: A closed KKR sale and 2026 adjusted EPS on track for the $4.80 to $5.30 guidance pass; a delayed sale or a cut to the guidance fails. Outcome: Sempra expects 2026 adjusted EPS at the high end of its guidance, but the KKR sale had not closed by November 5, 2026, after Sempra had expected a close in Q3 2026.
Nov 19, 2026 (estimate): KKR sale closes. Pending. Watch: A close of the sale of a 45% interest in Sempra Infrastructure Partners to KKR by about November 19, 2026, as Sempra expects, passes; a further delay or new terms fail.
Feb 5, 2027 (estimate): 2026 results and the 2027 guidance. Pending. Watch: A 2027 outlook within the $5.10 to $5.70 range and an updated capital plan with Oncor's new grid projects pass; a lower outlook or new equity needs fail.
- Recent events
- Nov 5, 2026: Sempra reported Q3 2026 results. GAAP EPS was $1.34 and adjusted EPS was $1.40, up from $1.11. GAAP results include a $149 million charge for regulatory disallowances at Sempra California and a $97 million gain on the sale of Ecogas. Sempra now expects 2026 adjusted EPS at the high end of its $4.80 to $5.30 guidance, affirmed its 2027 EPS guidance of $5.10 to $5.70 and its long-term EPS growth rate of 7% to 9%, and expects the KKR sale to close within two weeks. Oncor set a record peak demand of 33.3 GW and expects its 2027 to 2031 base capital plan to be about 20% larger than its 2026 to 2030 plan.
Oct 29, 2026: The California Public Utilities Commission issued a proposed decision that denies the request of SDG&E and SoCalGas to correct the capital mechanism of their 2024 rate case for 2027. Sempra said that, if it cannot change the outcome, Sempra California expects 2027 earnings at the low end of its segment guidance, and Sempra can be in the lower half of its 2027 EPS guidance unless it offsets the effect.
Oct 19, 2026: Sempra said that it will report Q3 2026 results on November 5, 2026.
Sep 14, 2026: Sempra Infrastructure signed a 20-year agreement to sell about 0.8 million tonnes per year of LNG to Petrobras from Port Arthur LNG Phase 2. Phase 2 is under construction, and Sempra expects its two trains to start commercial operations in 2030 and 2031.
Aug 20, 2026: Sempra completed the sale of Ecogas, its gas distribution utility in Mexico, for about $500 million. The sale is part of its capital recycling program.
Aug 6, 2026: Sempra reported Q2 2026 results. GAAP EPS was $1.21 and adjusted EPS was $1.16, up from $0.89. Sempra affirmed its 2026 adjusted EPS guidance of $4.80 to $5.30, its 2027 EPS guidance of $5.10 to $5.70 and its long-term EPS growth rate of 7% to 9%. It said that the sale of a 45% interest in Sempra Infrastructure Partners to KKR was on track to close in Q3 2026.
Jul 6, 2026: The board appointed Justin Bird, the CEO of Sempra Infrastructure, as CFO from about the close of the KKR sale. The current CFO, Karen Sedgwick, will become CEO of SoCalGas.
Jun 15, 2026: SDG&E and SoCalGas filed their 2028 general rate cases with the California regulator. SDG&E asked for a 2028 revenue requirement of $3.76 billion and SoCalGas asked for $5.10 billion, with yearly increases from 2029 to 2031.
Apr 17, 2026: The Texas regulator approved Oncor's rate review. The order raises Oncor's annual revenue requirement by about $560 million to about $6.97 billion, with a 9.75% return on equity and a 43.5% equity ratio. The new rates took effect on June 1, 2026.