Sempra Energy

Analysis

Business Description

Sempra Energy (Sempra) invests in, develops, and operates energy infrastructure. It carries out utility operations, development of energy infrastructure and provides related services in the US, Argentina, Mexico, Peru and Chile. The company's major operations include the generation, transmission and distribution of electricity; and storage, transportation and distribution of natural gas.

Sempra operates through six reportable business segments, SDG&E, SoCalGas, Sempra Texas Utility, Sempra Mexico, Sempra Renewables, and Sempra LNG & Midstream.

In FY2020, the company’s capital expenditure stood at US$4,676 million, which grew 26.1% YoY.

The company had three subsidiaries at the end of FY2020. It has operational presence in North and South America.

Business Segments
Performance

Reported revenue of US$1,165.0 million for FY2020, which decreased 7.2% YoY, and recorded negative growth of 3.9% during 2018-20.

Mexico accounted for 10.2% of the company's revenue in FY2020.

Inventore veritatis
Overview

Offers electric and natural gas services to customers in San Diego county and Southern Orange county in Southern California

Electric Utilities:

Operates through natural gas, wind, solar and other electricity generation facilities and also resells through power purchase agreements.

Also provides direct access to certain customers.

Serves residential, commercial, industrial and street and highway lighting.

Procures natural gas through short-term contracts for generation facilities, and participates in Western Systems Power Pool.

Gas Utilities:

Sells, distributes and transports natural gas to residential, commercial and electricity generation and transportation customers.

Shares storage capacity of SoCalGas.

In FY2020, the segment’s capital expenditure was US$1,942 million, which increased 27.5% YoY.

Key Stats

As of December 2020:

Electric Utilities:

- Transmission lines: 2,129 miles - Distribution lines: 23,926 miles - Substations: 183

Performance

Reported revenue of US$5,313.0 million for FY2020, which grew 7.9% YoY, and recorded a CAGR of 7.8% during 2018-20. The segment accounted for 45.4% of the company's revenue in FY2020.

Growth in revenue was due to growth in natural gas revenue and electricity revenue.

Overview

Develops, owns and operates, or holds interests in LNG and natural gas midstream assets and operations Interest in the Cameron LNG regasification terminal and the Cameron LNG liquefaction project in Louisiana.

Provides natural gas marketing, trading, and risk management services through contracted natural gas supply, transportation, and storage capacity.

In FY2020, the segment’s capital expenditure stood at US$268 million, which grew 139.2% YoY.

Key Stats

As of December 2020:

- Operated a 40-mile natural gas pipeline in south Louisiana.

Performance

Reported revenue of US$374.0 million for FY2020, which decreased 8.8% YoY, and recorded negative growth of 11% during 2018-20. The segment accounted for 3.2% of the company's revenue in FY2020.

Revenue decreased due to increase in costs associated with indemnity payments to Sempra Mexico.

Overview

Operates through IEnova.

IEnova operates, develops and owns interests in natural gas transmission pipelines; liquid petroleum gas (LPG) and ethane systems; a natural gas distribution utility; electric generation facilities, including wind, solar, and natural gas-fired power plants; a terminal for the import of liquefied natural gas (LNG); a terminal for the storage of LPG; and marketing operations for the purchase of LNG and sale of natural gas in Mexico.

Assets include Energia Sierra Juarez, TdM and Ventika generation plants, ECA LNG terminal and other pipelines.

Serves commercial, residential and industrial customers.

In FY2020, the segment’s capital expenditure stood at US$611 million, which decreased 2% YoY.

Key Stats

As of December 2020:

- Natural gas transmission pipelines: 1,850 miles - Natural gas compressor stations: 15 - Ethane pipelines: 139 miles - LPG pipelines: 118 miles - Ecogas operated 2,729 miles of pipeline, and served more than 441,000 customers

Performance

Reported revenue of US$1,256.0 million for FY2020, which decreased 8.7% YoY, and recorded negative growth of 4.5% during 2018-20. The segment accounted for 10.7% of the company's revenue in FY2020.

Revenue decreased due to reduction in earnings from force majeure payments with respect to the Guaymas-El Oro segment of the Sonora pipeline.

Overview

Develops, operates and owns interests in renewable energy generation projects in the US.

Operates through long-term power purchase agreements to sell electricity and related green energy attributes.

Performance

In FY2020, the segment did not generate any revenue.

Overview

Includes investment in Oncor Holdings (Oncor).

Oncor is a regulated electric transmission and distribution utility.

It serves customers in the north-central, western and eastern parts of Texas.

Key Stats

As of December 2020:

- Transmission and distribution lines: 139,000 miles.

Performance

In FY2020, the segment did not generate any revenue.

Overview

Sells, distributes and transports natural gas in Southern California and parts of central California.

Operates through transmission, distribution, service and storage pipelines and compressor stations.

Serves wholesale, electricity generation, large commercial and industrial, and enhanced oil recovery customers.

In FY2020, the segment’s capital expenditure stood at US$1,843 million, which increased 28% YoY

Key Stats

As of December 2020:

- Transmission and storage pipelines: 3,059 miles - Distribution pipelines: 51,367 miles - Service pipelines: 48,492 miles - Operated nine transmission compressor stations - Storage capacity: 137 bcf - Operated more than 150 injection, withdrawal and observation wells.

Performance

Reported revenue of US$4,748.0 million for FY2020, which grew 4.9% YoY, and recorded a CAGR of 9.5% during 2018-20. The segment accounted for 40.6% of the company's revenue in FY2020.

Growth in revenue was due to increase in natural gas sales.

Geographical Segments
Performance

Reported revenue of US$10,205.0 million for FY2020, which grew 6.6% YoY, and recorded a CAGR of 3.2% during 2018-20.

The US accounted for 89.8% of the company's revenue in FY2020.

Inventore veritatis