Sempra (SRE) — Q4 2025 Earnings Call Transcript

Good morning, and welcome to Sempra's fourth quarter 2025 earnings call. A live webcast of this teleconference and slide presentation are available on our website under the Events and Presentations section. We have several members of our management team with us today, including Jeffrey Walker Martin, Chairman and Chief Executive Officer; Karen L. Sedgwick, Executive Vice President and Chief Financial Officer; Justin Christopher Bird, Executive Vice President of Sempra and Chief Executive Officer of Sempra Infrastructure; Caroline A. Winn, Executive Vice President of Sempra; E. Allen Nye, Chief Executive Officer of Oncor; and other members of our senior management team. Before starting, I would like to remind everyone that we will be discussing forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in any forward-looking statement we make today. The factors that could cause our actual results to differ materially are discussed in the company's most recent 10-Ks filed with the SEC. Earnings per common share amounts in the presentation are shown on a diluted basis, and we will be discussing certain non-GAAP financial measures. Please refer to the presentation slides that accompany this call for a reconciliation to GAAP measures. I also encourage you to review our 10-Ks for the year ended 12/31/2025. I also would like to mention that forward-looking statements contained in this presentation speak only as of today, February 26, 2026, and it is important to note that the company does not assume any obligation to update or revise any of these forward-looking statements in the future. With that, please turn to slide five, and let me hand the call over to Jeff.

Thank you all for joining us today. Our success in 2025 reflects how well we performed against our priorities. In that regard, we introduced five value creation initiatives last year, designed to simplify Sempra’s business model, mitigate risk, and improve financial strength. The first value creation initiative was to prioritize utility investments with improved returns. During the year, we deployed $13 billion in CapEx, Sempra California increased CPUC-based operating margin, and Oncor improved capital efficiency through the implementation of the unified tracker mechanism. Together, these factors contributed to Sempra achieving record adjusted EPS of $4.69, at the high end of our 2025 adjusted EPS guidance range, while establishing a strong foundation for continued growth through 2030. We continue to see compelling investment opportunities in Oncor’s service territory, with historic levels of transmission expansion continuing to advance. In order to support this build-out, we are excited to introduce a new record capital plan of $65 billion for 2026 to 2030, representing a 17% increase to last year's plan. Karen will speak to this later in the call, including details about $9 billion of upside opportunities that we are tracking within the plan period. The second initiative was to highlight value in our LNG franchise. In September, we announced the sale of a 45% stake in Sempra Infrastructure Partners for $10 billion, implying over a $22 billion equity value. We are pleased to recognize the significant value created on behalf of our shareholders at an attractive multiple, and we continue to expect to close that transaction in 2026, subject to closing conditions. Sempra Infrastructure also made progress during the year on several LNG projects by declaring FID on Port Arthur LNG Phase 2 and reaching mechanical completion at ECA LNG Phase 1. Also, Port Arthur LNG Phase 2 construction continues to proceed on schedule, and we are excited by the prospect of all these projects driving the growth profile of that business well into the next decade. Our third priority was to simplify the business and reduce portfolio risk, including the sale of non-core assets in Mexico. In December, Sempra Infrastructure Partners entered into an agreement to sell Ecogas for the equivalent of approximately $500 million in U.S. dollars. We believe the implied 12.7x EBITDA multiple provides further support for the overall value of Sempra Infrastructure's portfolio, and we look forward to completing that sale in 2026, subject to closing conditions. Our fourth initiative was to execute Fit for 2025, which focused on reducing our cost structure to meet our future business needs and included modernizing our workforce to improve organizational efficiency. We have more work to do in this area, and it will continue to be a focus in 2026. Lastly, we wanted to elevate community safety and operational excellence across the enterprise, which culminated in California legislature passing SB 254, which strengthened the long-term stability of the state's wildfire fund and called for further reductions to wildfire risk exposures through the natural catastrophe resiliency study to be published in April 2026. SDG&E was recognized as best in the West in electric customer reliability for the twentieth consecutive year. Now please turn to the next slide, where Karen will walk through our financial results.

Thank you, Jeff. Earlier today, Sempra reported fourth quarter 2025 GAAP earnings of $352 million, or $0.54 per share. This compares to fourth quarter 2024 GAAP earnings of $665 million, or $1.04 per share. Full year 2025 GAAP earnings were $1.796 billion, or $2.75 per share. This compares to 2024 GAAP earnings of $2.081 billion, or $4.42 per share. On an adjusted basis, fourth quarter 2025 earnings were $841 million, or $1.28 per share. This compares to our fourth quarter 2024 adjusted earnings of $960 million, or $1.50 per share. Full year 2025 adjusted earnings were $3.066 billion, or $4.69 per share. This compares favorably to our previous full year 2024 adjusted earnings of $2.969 billion, or $4.65 per share. We are pleased with our execution as adjusted EPS for the year came in at the high end of our previously announced 2025 adjusted EPS guidance range. Please turn to the next slide. Variances in the full year 2025 adjusted earnings compared to the same period last year can be summarized as follows. At Sempra Texas, we had $80 million of higher equity earnings from the UTM, higher invested capital, and customer growth, partially offset by higher interest expense, depreciation, and O&M. Turning to Sempra California, we had $213 million primarily from lower income tax benefits and higher net interest expense. As a reminder, fourth quarter 2024 and full year 2024 results were impacted by the recognition of two years’ worth of income tax benefits from last year's GRC final decision. Sempra California also had $148 million of higher CPUC-based operating margin net of operating expenses, regulatory disallowances, and a lower cost of capital. At Sempra Infrastructure, we had $123 million primarily from higher asset and supply optimization, higher transportation results, and lower depreciation on assets held for sale, which were partially offset by lower income tax benefits. At Sempra parent, $41 million of higher losses is from higher net interest expense partially offset by higher income tax benefit, higher investment gains, and other. Please turn to slide nine. To start, I would like to extend our appreciation to our current shareholders for supporting our mission, and as we look to build upon the momentum established in 2025, Jeff has laid out a series of priorities for 2026, and I am pleased to note that we have already hit several important milestones. Oncor has successfully reached a comprehensive settlement in its base rate review. The settlement contemplates improvements to the authorized equity layer, ROE, and cost of debt. If approved by the PUCT, this outcome will better align Oncor's cost structure to the current environment and is also expected to improve Oncor's financial strength and credit metrics during this period of exceptionally high growth. A final order is expected in the first half of this year, and importantly, Oncor expects to earn very close to its authorized ROE over the 2026 to 2030 time frame. At Sempra Infrastructure, Port Arthur LNG Phase 1 remains on schedule for achieving COD at or near 2027. And finally, in California, I would like to note we continue to be engaged in efforts to improve public policy to support SB 254 follow-on legislative efforts. We look forward to updating you on these priorities on our next earnings call. With that, please turn to the next slide. We are excited to announce our 2026 to 2030 capital plan totaling $65 billion, an increase of $9 billion over last year's plan. In support of our mission, 95% of Sempra's overall capital program is targeted for utility investments. The capital plan is primarily driven by strong growth at Sempra Texas, most notably from the acceleration of the Permian Basin reliability plan, and as the remaining 765 kV strategic transmission expansion plan continues to advance, we have taken a conservative approach in developing Oncor's base plan by only adding major transmission projects with existing regulatory approvals and those that are part of the Permian plan. As a reminder, Oncor is expected to build more than half of the total of ERCOT's estimated $32 billion to $35 billion in required transmission investment. Consequently, nearly 70% of Oncor's planned CapEx is dedicated towards transmission. Also within the plan period, we are tracking significant incremental capital opportunities at Oncor, currently estimated at $10 billion, or $8 billion based on Sempra's proportionate ownership share. This upside opportunity primarily includes the non-Permian plan portion of the 765 kV STEP, additional transmission upgrades currently pending ERCOT approval, and potential system resiliency plan updates. Further, Oncor accounted for certain LC&I interconnections in the incremental CapEx category. Even though these projects may not have currently met all development milestones to be included in their base capital plan, there is a high likelihood these projects come into the plan in the future. Keep in mind, too, that Oncor’s service territory has some of the highest concentration of AI-related and data center growth, which represents additional potential investment opportunities. Please turn to the next slide. Driven by our expanded capital program, we project overall rate base to increase from $57 billion in 2025 to $97 billion in 2030, an impressive 11% five-year CAGR. Our disciplined capital allocation strategy is designed to produce attractive returns with improving cash flows and distributions to help efficiently fund the exceptional growth we are seeing in Texas. Sempra Texas rate base is projected to grow at a remarkable 18% CAGR over the plan period, while California rate base is projected to grow more modestly as we continue to prudently invest in improvements to safety and reliability. In combination, these investments will help grow our overall regulated footprint as we expect Sempra Texas to surpass Sempra California as the majority of our rate base by 2030. Please turn to the next slide. Over $50 billion provided by operational cash flows and expected transaction proceeds, we have eliminated the need for new common equity issuances to fund the base capital plan. Due largely to our accomplishments in 2025, operating cash flows have increased by about $5 billion from last year's plan and are expected to be the predominant funding source for our capital campaign. As always, we will continue to seek the most efficient and lowest cost financing available to fund the capital plan and other future growth, and we are well positioned in that regard. For example, we anticipate an additional $2.2 billion of cash generated from the Sempra Infrastructure Partners transaction beyond the 2030 planning period. We will also retain a 25% residual stake in Sempra Infrastructure Partners with an implied equity value of approximately $5.5 billion, which provides further flexibility. Across the plan period, we remain dedicated to providing investors with an attractive total return complemented by a growing dividend, while retaining funding flexibility over the longer term to support our strong expected earnings growth. Please turn to the next slide. We are committed to maintaining a strong balance sheet and investment grade credit ratings, and the pending Sempra Infrastructure Partners transaction remains a key driver in helping us meet our goals in this area. After closing, we expect regulated earnings to comprise approximately 95% of our business in 2027 and beyond as we transition to a more pure play utility holding company. We also have the opportunity to deconsolidate Sempra Infrastructure Partners' debt and have held constructive discussions with the rating agencies about the potential to lower downgrade thresholds once we complete our capital recycling program. After we close the transaction, we are targeting at least 50 to 150 basis points of cushion on average above our FFO-to-debt thresholds over the plan period. Please turn to the next slide. Simplifying our portfolio and concentrating our focus on utility investments continues to strengthen our visibility into future financial performance. The growth we see through 2030 and beyond really stems from the work and accomplishments from this past year. As Jeff highlighted earlier, those efforts are driving meaningful improvements across the businesses, including improving financial returns, growing earnings and cash flows, recycling capital to fund our record capital plan, while also strengthening the balance sheet. In combination, these improvements have positioned us to launch a record capital plan without the need for common equity issuances and gives us the increasing confidence to be able to provide a robust 2030 earnings per share outlook. Today, Sempra is affirming our full year 2026 adjusted earnings per share guidance range of $4.80 to $5.30, introducing our full year 2027 EPS guidance range of $5.10 to $5.70, and issuing a 2030 EPS outlook of $6.70 to $7.50. With today's update, we believe we have one of the highest projected growth rates in the sector, and our 2030 outlook shows that our strong long-term growth expectations continue through the end of the decade. For additional context on our guidance, please refer to slide 17. And now I am going to hand it back to Jeff to wrap up on our next slide.

Thank you, Karen. Allow me to conclude our prepared remarks today by outlining Sempra's value proposition and key investment highlights. First, we are launching a record $65 billion capital plan that projects 11% annualized growth in rate base across the plan period with visibility into another $9 billion of potential upside opportunities. Second, we are aiming to provide investors improved returns at lower risk in markets with constructive regulation, targeting long-term 95% regulated utilities earnings. Third, our capital allocation is increasingly directed toward Texas, where we expect to drive nearly 60% of our rate base by the end of the decade. Fourth, we have been successful in creating a clear path to fortressing our balance sheet and improving our credit metrics. With this efficient sourcing of capital, we now have no need for common equity issuances to fund the base capital plan. And finally, we are committed to returning capital to shareholders and are targeting annual dividend growth of 2% to 4% over the plan period. To summarize, we believe Sempra offers investors an attractive combination of current yield, durable earnings growth, and long-term capital appreciation. We are pleased with our 2025 performance and view it as a foundational year that sets us up for long-term success. Now I would like to open the line for your questions.

Hey, good morning. Morning, Jeff. Maybe just starting off on the 2030 guide that you introduced today, the range obviously seems to indicate about that 7% to 9% CAGR you reiterated today from the 2026 base. Can you help elaborate what moves you into the top half of that 2030 range? Does that variability include any of the $9 billion upside opportunities that you continue to highlight? Or could that be accretive to, let us just say, the $7.50 you have out there? Thanks.

Sure. I appreciate the question, Shahriar. You recall that we set an expectation for our future growth last year of having a long-term growth rate of about 7% to 9%. A couple of the key takeaways from the call today: with all the accomplishments I noted in my prepared remarks in 2025, we now see the quality and the certainty of our future earnings and cash flows improve, and that is what has given us increased confidence to be more transparent about our expectations for 2030, which is why we issued the outlook you referenced. The larger items that can impact the long-term outlook are regulatory matters. I mentioned our 2028 GRC in California; Caroline and her team should be in a great position to make that filing in May. Second, we will be working hard to address that $9 billion of future upside in the roll-forward capital plan. To be very clear, that $9 billion is outside the base plan. One helpful point: at this time last year, we had about a $12 billion upside opportunity that we noted, and we were able to move roughly $9 billion or $10 billion of that into the current plan. We feel very good about this $9 billion, and that is the type of capital that can move us toward the upper end of the 2030 guidance. In terms of takeaways: the quality and certainty of future earnings and cash flows have improved, and our expected growth is trending in line with or above our long-term guidance of 7% to 9%.

Got it. That is perfect. And then diving a little bit deeper on California: what is embedded in earnings growth in 2027 given the smaller contribution versus prior years? Is there incremental ROE lag that you continue to anticipate? And does a potential reconsideration of attrition year revenues potentially drive that higher? It seems California continues to be somewhat de-emphasized as you think about capital allocation within the company. Please give a little sense on that mix. Thanks.

A couple of things: what you are seeing reflects the impact of the approved attrition from the last GRC as you move from 2026 into 2027. Caroline and her team are working aggressively on improving efficiencies and modernizing that business, which is good for affordability. She also has a set of regulatory items she will pursue this year and into 2027, which could have an impact. So I think there is continued opportunity in 2026 and 2027 for improvements. We are comfortable with the guidance we have out there for Sempra California at this point.

Got it. Super helpful. Thanks, Jeff, and congrats on the execution today. It was pretty noteworthy. Appreciate it.

Good morning, Jeff.

Hey, good morning. Thank you.

So just maybe, I appreciate given 2026, 2027, 2030, because there was definitely shaping in 2026 higher, 2027 lower growth prior year. Could you give us some sense of the shaping of 2028 to 2030? Is it a little more linear just given that it is driven by the rate base growth and the UTM? Any color would be helpful.

Steve, thanks for the question. Over time, we get input from the investment community about how to be more transparent. This includes surveying other companies in the sector. Some give one-year guidance, some two years, a few three years. What we wanted to do is reflect the improvements in 2025: stronger capital plan, better capital efficiency, and clearer path to improving our balance sheet. This has allowed us to give more visibility into 2030. You can look at interim growth rates you might expect. We are still guiding to longer-term growth beyond the plan period of 7% to 9%. It will not be a straight line, but this is a robust growth story backed by a solid dividend. We will continue to find efficient ways to deploy and finance capital.

And then my other question: the $9 billion of upside at Oncor Texas — I think you gave the pieces there. Could you give a little sense of timeline when we will know the likelihood of that happening and any color on growth?

Good question. If you look at our base capital plan chart and where that $9 billion of upside can layer in, it is really a 2028, 2029, and 2030 story. We feel very good about the shape of 2026 and 2027 in the capital plan; the upside layers in around 2028 to 2030 and can shape the longer-term CAGR through 2030. Refer to slide 22 for more detail, and Allen, if you do not mind, please highlight what you have pushed into your base capital plan and how you think about spending in the upside case.

Thanks, Steve. Starting from the top, our prior plan was $36 billion in base capital and $12 billion in incremental opportunities. What we announced today was $47.5 billion in base capital and $10 billion in additional incremental opportunities, about an $11.5 billion increase to the base plan. Divided into four main categories: Permian plan projects about $6 billion; new transmission projects about $2 billion; distribution upgrades about $2 billion; and Delaware Basin transmission projects about $1 billion. Regarding the incremental bucket, we believe we have a high-quality group of potential projects totaling about $10 billion. More color on slide 22: ERCOT non-Permian projects and the 765 kV STEP plan are about $3 billion; additional transmission upgrades presently in the stakeholder process or waiting ERCOT approval are about $2.5 billion; system resiliency plan updates for 2028 to 2030 are approximately $2.7 billion; and additional LC&I interconnections are approximately $1.2 billion. We feel solid about our base plan; it is heavily de-risked and primarily transmission that has either gone through the ERCOT or the PUC process. About 70% of the base is transmission and is not contingent on data center development. We have high confidence in the base number. For incremental, we believe part or potentially all is realistic or possible in the next five years. What could shift incremental to base: ERCOT-released transmission projects that we have applied for or are in a regional transmission plan, CCNs for some of the incremental projects, and the SRP filing we are targeting in 2027 could move dollars into base. Also, the batch zero process at ERCOT or regional transmission plan additions could move incremental dollars into base. That is where we are; I feel very good about both the base and incremental.

Steve, one more thing: you can see that with confidence across our management team, as Allen outlined, we have the opportunity to move the $9 billion of upside into the plan, as we did last year, and that would materially improve the projected long-term growth rate.

Thank you.

Morning. Thanks for taking the questions, and appreciate all the updates. I wanted to follow up on one of the prior answers, trying to understand the $9 billion of capital putting you into the upper end of the guidance of, I think, $7.50. What is the offset that is keeping you at the high end of the range? Is that just being conservative? On the prior fourth quarter call, we talked about trending to be above 7% to 9% with $0.20 of Oncor accretion, the UTM, and a large capital acceleration at Oncor. Is that offset not accelerating you beyond $7.50?

It is a good problem to have, Nick. What has been dramatic year over year is we increased our projection of internally generated cash flows by just over $5 billion. That is instrumental. We are continuing to improve credit quality in California. While we moderated growth a bit in California, we have continued increase in Oncor growth, with higher cash flows and an 18% rate base growth across the five-year plan. We have a real opportunity to flex up to the higher end of the 2030 outlook. We are pleased to provide this visibility. The caveat: we want to get the settlement finalized in Texas and close the Sempra Infrastructure transaction. As we take execution risk off the table, we will continue to update how we think about the future.

Thanks. And you said you will always seek the lowest cost financing to fund CapEx. Thoughts on the remaining 25% in terms of using something to fund the $9 billion or other strategic actions to limit common equity? Thanks.

Nick, it starts with improving operating cash flows — that $5 billion of projected new internally generated cash flows is central. Second, we anticipate $2.2 billion of additional proceeds from the Sempra Infrastructure transaction that fall outside the plan period. Third, we have a demonstrated track record of capital recycling and retain a 25% interest in Sempra Infrastructure, which remains a potential funding opportunity. We will continue to compete capital. As these large capital programs come forward, sourcing capital efficiently remains a priority. We will work through the fall planning process with Karen's team to continue to deliver a best-in-class efficient financing plan as we roll the plan forward.

Thanks.

Hey, Jeff. What a difference a year makes. Incredible outcome here. Thank you.

Absolutely.

Let me come back to what Nick was pressing on. When you think about the moving pieces in the $7.10 midpoint for FY30, what else really would move the deal? You talked about the $9 billion and the SIP sale. What else would really drive you within that range? And how do you think about California in that vein — whether that is a strategic decision or finding other avenues to accelerate since it has not really changed year over year for the CapEx plan, for instance.

Twelve months ago we were facing uncertainty in Texas rate cases and a California rate case beginning. Now, with the settlement in Texas and efforts to finalize it this spring, we get regulatory certainty in Texas through 2030 with no expectation of filing a new rate case until around 2030. In California, we have certainty from the last rate case over the next two years, and we need to execute on the 2028 GRC. Our priorities: get the Texas settlement approved, close the Sempra Infrastructure transaction, work with rating agencies to fortify the balance sheet, and improve in California. As those execution risks come off the table, expect us to provide more visibility. California has high equity layers and has been a top regulatory environment; there are positives unfolding. Moderating growth a bit still meets safety and reliability needs while California's cash flow generation remains important. California and Texas are very complementary — Texas provides the leading growth story and Oncor has the largest opportunity. We will continue to work to improve the growth story and build a better business.

Do you think you will come back after getting the settlement resolved with additional California visibility or an analyst day, or do you think the FY30 outlook is sufficient for now?

There is no question we can provide more visibility than a year ago. We think that is beneficial for investors. We have been pursuing simplification of the business, taking risk off the table. If there is an opportunity for an analyst day, that is a great idea and something we will consider as we move through the year.

Excellent. Good luck to the team. We will see you soon.

Thank you. Good morning. Digging into the data center pipeline and LC&I pipeline in Texas, have you seen slippages or challenges for data centers physically getting built and online? We have heard more about supply chain challenges — labor, certain equipment, transformers, etc. Curious what you are seeing on the ground and what can actually get built.

We have slide 23 for detail, and I will ask Allen to comment. As we laid out the $65 billion base capital plan, the focus is on how much growth we see in Texas. Remarkably, Oncor's capital plan is about 70% transmission, which is the key enabler for generation and large load customers as well as residential service. Transmission is the critical piece. The data center opportunity is important and represents upside to our current plan. Allen, please comment on slide 23 and how you will serve data centers and other large customers in the queue.

Thanks, Jeff, and David. I speak with many data center developers. The Oncor queue last quarter was 226 gigawatts with 210 gigawatts of data; this quarter it is 273 gigawatts with 255 gigawatts in data. Data centers continue to show up looking for service. The quality and likelihood of projects vary — some are very serious and likely to make, others are less serious. We are working multiple avenues beyond batch zero. Examples: a South Dallas project nearing ERCOT completion would provide 4 gigawatts of load-serving capacity and would be brownfield and completed relatively quickly once approved. We have projects related to about 10 additional gigawatts elsewhere on our system moving through the RPG process. We are also developing a list of loads for ERCOT's 2026 RTP projection; TDUs must file by April 1. Customers need to meet RTP 2026 criteria that align with SB 6 requirements: demonstrate financial commitment, proof of site control, fund ERCOT study costs upfront, disclose intended generation sources, and identify any other active projects that could impact system reliability. As of today, at least 38 gigawatts meet those standards and we expect more by April 1. Keep in mind our system peak is about 31 gigawatts. Finally, we are constructing more than half of the Permian Basin reliability plan and the STEP 765 kV plan, which would provide for additional load additions. Batch zero is important and we will be heavily involved, but we are working multiple avenues to address large load needs.

Thank you, Allen. As you follow data centers nationally, the largest opportunity in the U.S. for data centers is in Texas, and within Texas, the largest opportunity sits in Oncor's footprint. Slide 23 shows upwards of 273 gigawatts in the queue, and we remain optimistic about AI-driven growth. We will support the Governor and the economic agenda in Texas while managing costs for residential and other customer classes.

Excellent. Separately, could you touch on how your credit metrics trend through the plan to 2030? Are there peaks and troughs to manage?

This was front and center last year. We have done a lot in the last twelve months to create a clear path to a stronger balance sheet. We have guidance on improving our HoldCo-to-total debt ratios and driving down debt-to-equity to around 49% or below. Karen has more to share.

Maintaining the balance sheet is a priority alongside keeping investment grade credit ratings. The Sempra Infrastructure Partners transaction is key: proceeds will support the balance sheet and eliminate the need for common equity in our base plan. After closing, we aim for regulated earnings to be approximately 95% of total earnings composition, which is important to rating agencies. We can deconsolidate Sempra Infrastructure’s debt and have had constructive discussions with rating agencies on downgrade thresholds; we will meet with them and get updates. Over the last twelve months we improved our five-year plan cash flows by $5 billion. Our target of 50 to 150 basis points of cushion above FFO-to-debt thresholds is attainable. We will fine-tune further once we close the Sempra Infrastructure transaction and meet with rating agencies. The key takeaway: the metrics will fluctuate a little but should be solid once we complete this transaction and improve cash flows.

David, our focus now is getting a great outcome in the Texas base rate review expected this spring, successfully closing the Sempra Infrastructure transaction, and then working closely with rating agencies. We gave guidance about the cushion we want on the balance sheet; that will be an evolving conversation and we will provide more details as we progress.

Okay. Perfect. Thank you so much.

Good morning, team. Good morning, Jeff. Two quick housekeeping items. On slide 12, you mention the $2.2 billion of cash expected after the plan period. Do you have to do any bridge financing to meet needs through 2030? How do you handle that? I have another follow-up.

In the current base capital plan, our financing is lined up, so we do not need bridge financing in the plan. For future capital increases beyond the plan, those are the types of things we'll look at in the 2032–2033 timeframe. There's the option to monetize the $2.2 billion or use capital recycling opportunities, including at Sempra Infrastructure, to return capital earlier in the plan instead of waiting to 2032–2033.

Great. And you may have answered this with Steve's question earlier. Slide 10 talks about $9 billion of CapEx opportunities and slide 22 on Texas talks about $10 billion. Are some of the Oncor opportunities outside the five-year plan?

Sorry for the confusion. The $10 billion reference is Oncor's 100% opportunity. On slide 10, the $9 billion is our pro rata 80.25% share of the opportunities.

Great. Thanks so much. Congrats on a good quarter.

Hey, Jeff. Thanks for taking the questions. A follow-up on Allen's comments about batch zero and large load in ERCOT: is there anything you could see from that process or from large load forecast revisions that could pose downside risk to the ERCOT-mandated transmission spend in the current plan?

I will pass this to Allen, but the framing is that we built a bulletproof base capital plan for $65 billion with thought to efficient financing and competing capital sources inside Sempra. We are largely shielded because 70% of Allen's capital is allocated toward transmission, and that work is critical and targeted at serving his customer base. Allen is managing batch zero as one of several legs of the stool. Allen, please provide color on how concerned you are about batch zero creating downside.

Carly, the upside or downside related to batch zero is categorized as category four of the incremental capital opportunities on page 22. What comes out of batch zero or other ERCOT regional transmission plans are not presently included in the base plan.

Got it. That is really clear. Thank you. One other clarification on Texas: does the current plan contemplate not going back in for a rate case until 2030? Any items that could change that and drive you to file sooner?

The goal is to get the current settlement approved. By moving to a 2024 test year, it updates our costs and captures inflation between 2021 and 2024. Our expectation is the next base rate review would not be until 2030, though Oncor could file earlier if needed. We feel great about the regulatory certainty this provides for the capital program.

Got it. Great. Thanks so much for the time.

Hey. Thanks for the kind words, and thank you for the time today. I wanted to come back to the Texas load pipeline. Can you share any thoughts on what form of commitments are being made? Any insight on the amounts that are LOAs versus others?

Couple of points before Allen speaks: slide 23 highlights the pipeline of customers trying to attach to the system. Allen has a process to ensure parties in the high-certainty category have security deposits and other mechanisms. One interesting point: Oncor's system peak is 31 gigawatts and Allen has high-confidence go-forward attachments exceeding 38 gigawatts, which is encouraging. Allen, please describe the steps you have taken to firm up the high-certainty category and the interim contracting process.

This has evolved. Last year, high-comp load included about 9 gigawatts of formally signed facilities extension agreements and about 27.5 gigawatts in an officer letter. ERCOT no longer uses the officer letter in the same way. We initially entered interim FEAs requiring about $6.5 million collateral from customers. These processes overlap with batch zero and the list of loads for ERCOT's 2026 regional transmission projection. The factors for the April 1 filing are the five I mentioned earlier and they contribute to the approx 38 gigawatts that meet standards today; that will be higher by April 1. Another factor: when I took the job in 2018, we had about $200 million of collateral from customers; today collateral from large load customers and others is around $3.5 billion, showing strong interest and seriousness from parties.

Is that helpful, Aiden?

Super helpful. Really appreciate the insight. I will leave it there. Take care.

I would like to thank everyone for joining us today. We certainly appreciate you making the time to participate. I would also highlight that this is a very exciting time for our company, and meeting with investors remains a top priority for our management team. That is exactly why we expect to be particularly active in March and April and throughout this year with trips planned to various conferences, including, in the next forty-five days, trips to the Midwest, Northeast, and Europe. If there are any follow-up items, please reach out to our IR team with your questions. We very much appreciate your participation, and this concludes our call.