Sempra Energy’s Net Income Rises

Sempra Energy’s latest quarterly earnings rose to $559 million, or $1.77 per share, compared to second-quarter net income of $424 million, or $1.37 per share in 2021. In contrast, PG&E Corp . and Edison International reported decreased earnings at the end of last week.

However, earnings at Sempra’s two California utilities fell while those at the company’s Texas utility rose.

San Diego Gas & Electric’s second quarter earnings were $176 million, compared to $186 million in the previous second quarter. Southern California Gas’ net income dipped to $87 million in the second quarter of this year, down from $94 million in the same quarter in 2021. The fall was largely attributed to higher interest and higher income taxes.

In addition, since the beginning of this year, SoCalGas reached $98 million in settlements for the massive, month-long methane leak from its Aliso Canyon natural gas storage field at Porter Ranch, with $45 million in pre-tax costs recorded in the second quarter.

The two California utilities filed their 2024-27 general rate cases with the California Public Utilities Commission in May. SDG&E seeks $3 billion in revenue, with executives predicting an 8-12% rate increase will be approved. SoCalGas seeks $4.4 billion in revenue over the four years, with a rate base increase expected between 6-8%.

In late July, the CPUC gave SDG&E the greenlight to recover the cost of four new microgrid energy storage facilities. The 39 MW/180MWh projects will be installed at four utility substations. In addition, SoCalGas was awarded $750,000 for a project to turn biogas into renewable hydrogen.

Earnings at Oncor, the Texas utility, rose to $186 million, up from $136 million in the 2022 second quarter.

Emissions from gas infrastructure

Jeff Martin, Sempra CEO, told financial analysts on August 4th that the company is seeing significant growth in its customer base in Texas. It's also seeing hefty demand for its LNG facilities since the start of the war in Ukraine, particularly in Europe.

He said there was a need for additional west coast LNG facilities because shipping distances are far less than those from its frozen gas export terminals in the Gulf States.

Sempra wants “to help ensure energy is increasingly abundant, cleaner and more affordable,” Martin said.

Methane emissions from SoCalGas infrastructure were reduced by 37% between 2015-2021, according to the company. California has a 2030 goal to reduce methane emissions, which are far more potent that greenhouse gas emissions, by 40%.

Martin added that natural gas has a “long-term role in the economy,” but stressed the importance of its California utilities reducing fugitive methane emissions from gas pipees and other infrastructure.

He expects yet unproven carbon capture and sequestration technologies to help the company become net zero emissions by midcentury. In addition, he predicts a large number of carbon trading businesses will spring up that will help reduce emissions by allowing companies to buy and sell carbon dioxide equivalent reduction credits.

Sempra officials were asked if they would electrify operations at their LNG export facilities, given the European government’s decarbonization push. Martin said the company was working to decarbonize its systems.

Company officials again touted the five-year capital plan of approximately $36 billion, which is $4 billion more than the previous highest plan. Martin projects a 6-8% rate growth for Sempra.