SREDBA Sempra

Sempra is two different stories under one roof: regulated networks in California and Texas, and liquefied gas exports.

The regulated part is electricity and gas distribution in Southern California plus a large stake in the Texas transmission network. Here the tariff is set by a state commission on the basis of invested capital, so profit grows exactly as far as the company is allowed to build. Rate base growth is therefore the number to watch: demand in Texas is being lifted by data centres and relocating manufacturing.

The second part is gas liquefaction terminals on the Gulf coast operating under long-term contracts with buyers in Europe and Asia. That is no longer a regulated business: income depends on whether new trains get built and whether buyers are found for them. A separate risk is Californian regulation, where wildfire investigations and commission rulings can cost a utility more than any market factor. Sempra pays a dividend.