The parent corporation of San Diego Gas & Electric and Southern California Gas May 5 reported lower quarterly earnings of $612 million, or $1.93 per share, for the first quarter of 2022. That compares to first quarter earnings for the parent corporation of $874 million, or $2.87 per share, in 2021.
Like Edison International, Sempra Energy suffered losses. It lost $213 million, compared to a loss of $82 million in last year’s first quarter, including $75 million from foreign currency and inflation impacts and $120 million from deferred income tax expense.
SoCalGas reported net income of $334 million, which was lower than the $407 million reported in the first quarter of 2021. The gas utility paid out $66 million in claims arising from the Aliso Canyon gas storage field’s months-long methane leak that started in October 2015.
In contrast to the parent and SoCalGas, SDG&E’s latest quarterly earnings rose to $234 million, compared to $212 million in the first quarter of last year.
The rate bases of Sempra’s three U.S. utilities: SDG&E, SoCalGas and its Texas utility Oncor have nearly tripled in the last four years, according to Jeffrey Martin, Sempra CEO, growing from $14 billion to $41 billion. During a May 5 call with financial analysts, Martin pointed to the five-year capital plan of approximately $36 billion, which is $4 billion more than the previous highest plan, as noted in the previous earnings call in late February.
SDG&E and SoCal Gas in late April filed their 2023 cost of capital applications at the California Public Utilities Commission covering 2023 through 2025.
The gas utility seeks a higher rate of return on its capital investments, from 7.3% to 7.65, which would raise average rates by 63 cents a month, according to SoCalGas.
Breaking the trend of California’s investor-owned utilities seeking increases in their rates of return, SDG&E is asking for a lower profit on its infrastructure. It wants it to go from 7.55% to 7.48%. “SDG&E’s proposed rate of return for 2023 is the lowest among the major utilities in California, the company stated April 21.
Later this month, both utilities plan to file their general rate cases on their authorized revenue requirements for 2024 through 2027.
SoCalGas is expected to be able to deliver 30% renewable natural gas by 2030, up from 4% sent to its residential and small business customers by the end of last year.
“At Sempra, we understand the importance of energy security as a critical part of the transition to a lower-carbon future,” Martin said.
Offshore wind is not a priority
When asked if developing offshore wind off the coast of California was a priority, Martin replied, “It is one of our lowest priorities.”
He touted the huge opportunities from expanding the company’s out-of-state LNG facilities to replace Russian gas supplied to Europe because of the war in Ukraine. He said the company was “one of few LNG developers in the U.S. that has a shot at developing up to 30 million tons of new capacity” to meet first the growing Asian market and then Europe’s.
Sempra launched a $1 billion share buyback program, with $250 million shares bought the first quarter of this year. It hopes to complete its share reacquisitions by the end of next year.
Sempra also announced on Thursday that SDG&E and the U.S. Forest Service completed the $700 million fire hardening project in the Cleveland National Forest. The decade-long $700 million project was to reduce ignitions from utility equipment throughout 880 square miles of SDG&E territory.
