Sempra Energy Q3 2024 Earnings Report

Sempra Energy EPS Results

• Actual EPS: $0.89
• Consensus EPS: $1.05
• Beat/Miss: Missed by -$0.16
• One Year Ago EPS: $1.08

Sempra Energy Revenue Results

• Actual Revenue: $2.78 billion
• Expected Revenue: $3.54 billion
• Beat/Miss: Missed by -$763.83 million
• YoY Revenue Growth: -16.70%

Sempra Energy Announcement Details

• Quarter: Q3 2024
• Date: 11/6/2024
• Time: Before Market Opens
• Conference Call Date: Wednesday, November 6, 2024
• Conference Call Time: 12:00PM ET

Sempra operates as an energy infrastructure company in the United States and internationally. It operates through three segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. The Sempra California segment provides electric services; and natural gas services to San Diego County. As of December 31, 2023, it offered electric services to approximately 3.6 million population and natural gas services to approximately 3.3 million population that covers 4,100 square miles. This segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas. As of December 31, 2023, it serves a population of 21 million covering an area of 24,000 square miles. The Sempra Texas Utilities segment engages in the regulated electricity transmission and distribution. As of December 31, 2023, its transmission system included 18,298 circuit miles of transmission lines; 1,257 transmission and distribution substations; interconnection to 173 third-party generation facilities totaling 54,277 MW; and distribution system included approximately 4.0 million points of delivery and consisted of 125,116 miles of overhead and underground lines. The Sempra Infrastructure segment develops, builds, operates, and invests in energy infrastructure to help enable the energy transition in North American markets and worldwide. The company was formerly known as Sempra Energy (NYSE:SRE) and changed its name to Sempra in May 2023. Sempra was incorporated in 1996 and is based in San Diego, California.

Sempra Energy Q3 2024 Earnings Call Transcript

Key Takeaways

• Oncor’s 5-year capital plan is expected to grow by 40–50%‌ as Texas utility investment surges amid economic expansion and regulatory support.
• Encore faces a queue of over 350 GW of generation and storage projects plus 82 GW of AI/data center interconnection requests driving high-voltage transmission demand.
• The proposed California GRC decision would raise 2024 revenue requirements by 10.5% for SDG&E and 14.8% for SoCalGas yet underfunds key wildfire mitigation and gas integrity investments.
• Sempra Infrastructure’s LNG platform delivered record cargo volumes at Cameron LNG, kept ECA Phase 1 on track for spring 2026 and secured Saudi Aramco as a 25% equity partner in Port Arthur Phase 2.
• Management reaffirmed full‐year 2024 and 2025 adjusted EPS guidance and launched a $3 billion at-the-market equity program to fund its growing capital campaign.

Presentation

[Operator]

Good day, and welcome to Sempra's Third Quarter Earnings Call. Today's conference is being recorded. At this time, I'd like to turn it over to Glenn Donovan. Please go ahead.

[Glen Donovan, Vice President of Investor Relations at Sempra]

Good morning, and welcome to Sempra's Q3 2024 Earnings Call. A live webcast of this teleconference and slide presentation are available on our website under our Events and Presentations section. We have several members of our management team with us today, including Jeff Martin, Chairman and Chief Executive Officer Karen Sedgwick, Executive Vice President and Chief Financial Officer Justin Bird, Executive Vice President and Chief Executive Officer of Sempra Infrastructure Alan Nye, Chief Executive Officer of Encore Caroline Wynne, Chief Executive Officer of SDG and E Peter Wall, Senior Vice President, Controller and Chief Accounting Officer and other members of our senior management team. Before starting, I'd like to remind everyone that we'll 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.

[Glen Donovan, Vice President of Investor Relations at Sempra]

The factors that could cause our actual results to differ materially are discussed in the company's most recent 10 ks and 10 Q filed with the SEC. Earnings per common share amounts in our presentation are shown on a diluted basis, and we'll be discussing certain non GAAP financial measures. Please refer to the presentation slides that accompany this call for a reconciliation to GAAP measures. We also encourage you to review our 10 Q for the quarter ended September 30, 2024. I'd also like to mention that forward looking statements contained in this presentation speak only of today, November 6, 2024, and it's important to note that the company does not assume any obligation to update or revise any of these forward looking statements in the future.

[Glen Donovan, Vice President of Investor Relations at Sempra]

With that, please turn to Slide 4, and let me hand the call over to Jeff.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thank you, Glenn, and thank you all for joining us today. At Sempra, we believe the growth narrative for energy infrastructure continues to strengthen. With economic expansion and rising electricity demand, the United States is at a critical juncture where expanded investment is needed to upgrade and modernize its synergy networks. Nationally, we face mounting challenges in the form of aging infrastructure, extreme weather events and increased demands being placed on finite dispatchable generation resources. These trends confirm a growing need for new infrastructure investments to improve the resiliency of our energy networks, while at the same time extending the grid to new and diverse sources of energy.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Consider that by 2,030, the United States will need to have invested over $600,000,000,000 in transmission and distribution, and that forecast will likely prove conservative due to a series of sector tailwinds. Here's an example. Today, Texas is the 8th largest economy in the world and accounts for the highest level of both consumption and production of energy in the U. S. The International Energy Agency is now estimating that by 2026, global AI and data centers will require nearly twice the amount of electricity that the State of Texas currently consumes each year.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

So demand from digital infrastructure is another important growth driver for our sector. It also flags what I believe is an underappreciated investment thesis at Sempra. Here, we believe the best low risk and high growth play on AI is high voltage transmission. Alan will discuss this later in today's call, but there's a significant queue of over 3 50 gigawatts of generation and storage waiting to come on the grid in Texas. The critical success factor there is the speed at which companies like Encore can build, modernize and extend the high voltage transmission grid.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

That's exactly why the Texas legislature passed a bill last session to shorten the permitting timeline for new transmission investments. Not only is Encore expected to build more high voltage transmission this decade than any other company in America, Encore's regulated transmission investments officially go into rates with tracker filings being made twice annually. So the key takeaway for our industry is with economic expansion and higher expected demand growth, it's reasonable to believe that sector EPS growth will trend higher than historical norms. From my perspective to outperform the peer group in this environment, it requires 4 key advantages. Number 1, a clear and executable corporate strategy.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Number 2, exposure to sustained growth in large economic markets with constructive regulation. Number 3, economies of scale and operations, technology and access to capital and number 4, a strong track record of disciplined capital allocation. That's why in this higher growth environment Sempra is well positioned to outperform its peer group. We have the leading utility platforms in the 2 largest economies in the United States, both Texas and California. And we also own an infrastructure business with scale that invest in projects providing secure and cleaner forms of energy, targeting higher equity returns in our utilities and contributing important cash flows that support our balance sheet and capital campaign.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Currently, we're in the middle of our fall planning process and one of the early takeaways from network is we have improved visibility to a growing portfolio of investment opportunities. Next, turning to our financial results. I'm pleased with the progress the company has made in the Q3 and throughout the year as we continue to wait a final GRC decision in California. Earlier this morning, we reported adjusted EPS of $0.89 for the Q3 and year to date adjusted EPS of $3.12 As a reminder, these results do not yet reflect the California GRC proposed decision, which is pending before the commission. Assuming the final decision is received before year end, the earnings impacts will be applied retroactively to the beginning of 2024.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

As a result, we're affirming our full year 2024 adjusted EPS guidance range, 2025 EPS guidance range and projected long term EPS growth rate. Next, I'll turn the call over to Alan Nye, who will take us through recent developments at Encore, which I continue to believe has the best growth story in our industry. Please turn to the next slide.

[Allen Nye, CEO at Oncor Electric Delivery]

Thank you, Jeff. I'm excited to share another update on the remarkable growth opportunities we have at Encore. To start with, EIA's latest short term energy outlook forecasts 5% load growth between 2024 and 2025 across all ERCOT customers. And longer term, ERCOT expects power demand in Texas to grow by 80% through 2,030 from the recent peak demand record of approximately 85 gigawatts. Moving to our operational achievements.

[Allen Nye, CEO at Oncor Electric Delivery]

In the Q3, Encore built, rebuilt or upgraded over 800 miles of T and D lines, increased our premise count by approximately 19,000 and received a 50% increase in new large C and I POI requests. Turning to the $24,000,000,000 5 year capital plan that we announced earlier this year. We continue to see a growing portfolio of new investment opportunities. As you'll recall, we filed our inaugural system resiliency plan or SRP earlier this year and reached an unopposed settlement in August. We continue to advance our filing through the regulatory process, but as a reminder, the SRP is incremental to our current capital plan.

[Allen Nye, CEO at Oncor Electric Delivery]

Oncor's SRP investment will total nearly $3,000,000,000 of capital expenditures designed to reduce risk and over $500,000,000 of incremental O and M expense with the majority of the spending to occur in calendar years 2025 to 2027. If approved by the PUCT, we expect to start incurring that spend before the end of the year. We discussed the SRP with the PUCT at its open meeting a couple of weeks ago, and we expect them to continue their consideration of the plan and settlement at their meeting on November 14. We've also developed a leading wildfire mitigation program in the state of Texas and continue to leverage the expertise and insights gained from the Texas Forest Service and SDG and E among others. In addition to the SRP, new investment opportunities are being driven by large C and I customers looking to connect to Oncor system.

[Allen Nye, CEO at Oncor Electric Delivery]

The continued increase in interconnection interest and commitments comes from large C and I customers spanning multiple diverse industries located throughout Encore service territory. We are currently executing our fall planning cycle in alignment with Sempra to assess future capital projects and we'll be announcing our new 5 year capital plan on the Q4 call. Given ongoing economic expansion in Texas and significant new customer growth, plus transmission anticipated within ERCOT, we're expecting a significant increase in our roll forward 5 year capital plan of anywhere between 40% to 50% from our current capital plan. In Texas, our growth opportunities remain robust and the regulatory framework supports critical new investments to expand our system and improve grid resiliency and reliability for our customers. And across our management team, we couldn't be more excited to support the growing energy needs of our customers.

[Allen Nye, CEO at Oncor Electric Delivery]

Please turn to the next slide. Next, I'd like to turn your attention to another major tailwind positively impacting Oncor's anticipated service territory growth over both the intermediate and long term. Today, ERCOT projects demand growth in the Permian Basin to quadruple to 26.4 gigawatts in 2,038 from the 2023 actual level of 6.6 gigawatts. This represents an impressive compound annual growth of nearly 10%, proving once again that the region has some of the strongest growth prospects in the nation. In early fall, the PUCT approved ERCOT's Permian Basin Reliability Plan, which permits all common local projects totaling approximately $4,000,000,000 to commence immediately, irrespective of the voltage level that the commission will eventually approve for the needed import paths.

[Allen Nye, CEO at Oncor Electric Delivery]

We expect Encore to capture a significant portion of the new capital investment opportunities given our current operations in the Permian Basin and ERCOT's preliminary recommendations. Project assignments will be approved by the PUCT. And we're not standing still, as we've already begun preparation for the transmission projects expected to be assigned to Encore. We'll be filing the necessary certificates of convenience and necessity for those projects beginning in early 2025 and will continue the necessary make ready work throughout the year. These proceedings are expected to take approximately 180 days under Texas law.

[Allen Nye, CEO at Oncor Electric Delivery]

In terms of the timeline, the Permian plan provides that most of the local projects need to be in service by 2,030 with all projects, including the import pathway projects completed by 2,038. The full plan calls for a total investment of at least $13,000,000,000 in the Permian Basin territory. Specifically, the Permian plan proposes $4,000,000,000 for local projects and another $9,000,000,000 or more of transmission CapEx at either 3.45 kV or 7.65 kV voltage levels. The PUCT is expected to make a final decision on 3.45 kV or 7.65 kV import options by May 2025. Please turn to the next slide.

[Allen Nye, CEO at Oncor Electric Delivery]

Longer term, it is also important to note that ERCOT has provided a preliminary vision of a modern statewide extra high voltage or EHV grid. At this stage, it is preliminary and remains subject to the plan being finalized and obtaining customary regulatory approvals. But assuming the statewide EHV initiative is implemented, Oncor expects to construct a significant number of these projects due to the current number of endpoints owned by Oncor. These projects, when taken together, would add major transmission lines across the state to connect new sources of generation, increase overall electric load serving capability and improve system resiliency. As currently envisioned, Phase 1 of the EHV initiative would include the Permian Plan 765 kV lines as well as connections in Eastern and Central Texas, whereas Phase 2 would include connections in the Texas Panhandle and Rio Grande Valley.

[Allen Nye, CEO at Oncor Electric Delivery]

Now please turn to the next slide where Karen will walk through business updates at Sempra California and Sempra Infrastructure.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Thank you, Alan. I'd first like to provide some background on the proposed decision we received in our general rate cases last month. To start, the proposed decision increases the revenue requirement in 2024 by 10.5% for SDG and E and 14.8% for SoCalGas. Moving to rate base, the PD recommends 2024 authorized rate base of $8,400,000,000 for SDG and E and $12,800,000,000 for SoCalGas. There are however critical aspects of the PD that require additional work, particularly in areas that impact our ability to manage the system safely.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Examples include needed investments for integrity management of our natural gas distribution system and selective undergrounding of our electrical system to support wildfire mitigation efforts. On the positive side, you'll recall that our GRC addresses a broad range of topics that are important to the growth of our business. For example, the PD adopted certain infrastructure and technology capital projects that were not included in the base attrition year percentages, but are also important because they'll be placed in rates upon completion. Also as a reminder, the proposed decision makes available that allows for certain changes to be considered before a final decision is issued. On November 4th, the CPUC heard oral arguments, the records of which are open to the public.

[Karen Sedgwick, Executive VP & CFO at Sempra]

SDG and SoCalGas' subject matter experts are engaged in a regulatory process and working collaboratively towards reaching a final outcome that's beneficial for all stakeholders. During the quarter, our California utilities also received a final decision in Phase 2 of the cost of capital proceeding, which has a negative impact on the CCM for 2025. This one time formulaic modification lowers ROEs by 42 basis points and reduces the authorized adjustment percentage for future triggers to 20%. The silver lining here is that in a declining interest rate environment such as the one we may now find ourselves in limits the magnitude of subsequent reductions in ROE and off cycle years. For planning purposes, I'd also like to note that we expect to file our cost of capital application for the years 2026 to 2028 in March of next year.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Turning to the Federal Energy Regulatory Commission, SD and E submitted a new TO VI filing on October 30, where we updated our formulaic rate and made the case for constructive improvement in the authorized ROE to 12.25%. This consists of a base ROE of 11.75 percent plus a 50 basis point adder. We believe this proposal reflects current market conditions and we look forward to working through the regulatory process to achieve productive results. Additionally, at Sempra California, we're excited to share that the SDG service territory has seen electric demand growth, hitting a new all time record peak demand of over 5 gigawatts in September. This reflects growing demand from roughly 160,000 EVs connected to our system, one of the highest EV penetration rates in the country and from continued electrification of the Southern California economy.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Please turn to the next slide. Turning to Sempra Infrastructure. We continue to witness geopolitical developments around the world, which strengthen the value proposition of our infrastructure franchise. The U. S.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Is the largest exporter of LNG in the world and as a leader in the sector, Sempra Infrastructure remains well positioned to supply new customers in European and Asian markets. As Europe continues to reduce its energy imports from Russia, we believe there is a growing need for stable, lower cost gas supply, which would further drive demand for North American LNG. A few examples include, the EU has recently banned re exports to 3rd party countries taking effect in March 2025 Ukraine rejected a deal to extend Russian gas through Ukrainian pipelines beyond 2024. The EU's incoming Energy Commissioner has intensified efforts to end dependence on Russian gas imports. A number of EU member states are demanding tagging of LNG by source as it enters its ports to further cut back on Russian LNG imports and this is all on top of the major natural gas pipeline capacity that was taken offline at the start of the war in Ukraine.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Meanwhile, there are strong market consensus that Asian LNG demand will continue to grow dramatically through the next 15 years with growth estimates range between 70% 100% from 2023 levels. Much of this demand is tied to the displacement of more carbon intensive fuels, such as coal and refined products, from the energy mix of emerging economies in South and Southeast Asia, as well as continued demand growth in China and India. Bottom line, Sempra Infrastructure is well positioned to be a preferred provider to established counterparties seeking to match long term LNG supply with growing demand in Europe and Asia. Alongside these macroeconomic tailwinds, Cameron LNG Phase 1 continues to perform well. Year to date, the facility has already loaded 140 cargoes and lifetime to date Cameron has now surpassed 840 cargoes.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Notably, the current 2024 production level exceeds the average annual run rate implied since COD. So we continue to witness strong and improving results from this facility. Turning to construction updates. We're advancing work on a series of major projects. ECA LNG Phase 1 construction continues to make progress.

[Karen Sedgwick, Executive VP & CFO at Sempra]

The project is now focusing on finishing above ground piping installation and our timeline to bring commercial operations online in spring of 20 2026 remains intact. Additionally, we're pleased to announce the expansion of the GRO pipeline is expected to commence commercial operations before the end of the year. You will recall this pipeline is dedicated to support LNG exports at ECA. Port Arthur Phase 1 is also advancing as planned and is on time and on budget. Currently work is focused on piling, dredging, foundations, structural steel and above ground piping installations.

[Karen Sedgwick, Executive VP & CFO at Sempra]

We also received a FERC letter of authorization for the Louisiana Connector pipeline, which will provide feed gas into Port Arthur from the Haynesville basin. Mobilization activities to commence building this pipeline have already begun. Moving to our development efforts at Port Arthur Phase 2, the focus remains on finalizing off take arrangements and securing projects financing. We continue to have discussions with potential off takers. We've made significant commercial progress to date and are focused now on selecting the right customer mix and improving our commercial terms.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Most notably, Saudi Aramco is our anchor partner on the project with a non binding HOA for 5,000,000 tons per annum and a 25% equity participation. As a reminder, we have an EPC agreement with Bechtel to allow for continuous construction across both phases. We also continue to wait for our DOE non FDA export permit, which we expect to be resolved next year. As a result, we're now expecting Port Arthur Phase 2 development timeline to move ahead of the Cameron expansion. The timing of an FID decision for Cameron expansion is uncertain at this point.

[Karen Sedgwick, Executive VP & CFO at Sempra]

We continue to work with our partners on the optimal timing for expansion. As we've been in the past, we'll be very disciplined in our efforts to secure quality returns and mitigate risk to capital before making any investment decision. Please turn to the next slide. Earlier this morning, Sempra reported Q3 2024 GAAP earnings of $638,000,000 or $1 per share. This compares to Q3 2023 GAAP earnings of $721,000,000 or $1.14 per share.

[Karen Sedgwick, Executive VP & CFO at Sempra]

On an adjusted basis, Q3 2024 earnings were $566,000,000 or $0.89 per share. This compares to our Q3 2023 earnings of $685,000,000 or $1.08 per share. Because the GRC outcome remains pending, our CPUC authorized base revenues in Q3 year to date 2024 are based on 2023 authorized levels. This is important because assuming we receive a final decision this year, any true up will be retroactively applied to January 1. Please turn to the next slide.

[Karen Sedgwick, Executive VP & CFO at Sempra]

Variances in the Q3 2024 adjusted earnings compared to the same period last year can be summarized as followed. At Sempra California, we had $9,000,000 from higher CPUC based operating margin, net of operating expenses, including higher authorized cost of capital and higher regulatory interest income. This was more than offset by $52,000,000 primarily from lower income tax benefits and higher net interest expense. Turning to Sempra Texas, we had $44,000,000 of lower equity earnings from higher interest and operating expenses and lower consumption, partially offset by higher revenues from invested capital and customer growth. At Sempra Infrastructure, we had $36,000,000 of lower revenues in the transportation and renewables business, higher O and M and lower asset and supply optimization, partially offset by $7,000,000 primarily from higher income tax benefit and lower net interest due to higher capitalized interest.

[Karen Sedgwick, Executive VP & CFO at Sempra]

At Sempra Parent, the $3,000,000 net change is primarily due to higher taxes, partially offset by net investment gains. Please turn to the next slide. To conclude our prepared remarks, I'd like to quickly summarize our key investment highlights. As energy needs grow and evolve in North America, our commitment to operational excellence supports our focus on delivering safer, more reliable and resilient energy. And our position as a leader in North America's largest economic markets gives us unique opportunity to invest higher levels of capital in critical new energy infrastructure through the end of the decade and beyond.

[Karen Sedgwick, Executive VP & CFO at Sempra]

For general corporate purposes and to finance our growing capital campaign, we are establishing an at the market equity program of $3,000,000,000 This will help us fund growth in capital expenditures in a timely and efficient manner, while continuing to maintain the strength of our balance sheet. After we receive the GRC final decision, we'll be in an excellent position to roll forward our 5 year capital plan through 2029. We expect to provide that update in February on our Q4 call and in the interim, we'll continue executing on value accretive investments that drive sustainable long term growth. Thank you for joining us. I'd like to now open the line up for your questions.

[Operator]

Thank you. This concludes the prepared remarks. We will now open the line to take your questions. Please limit your questions to one question and one follow-up. And our first question will come from Nick Campanella from Barclays. Your line is open.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Good morning, Nick.

[Nicholas Campanella, Director at Barclays]

Hey, good morning, everyone or good afternoon rather. Thanks for taking my question. So Jeff on your comments about demand growth and sector EPS growth kind of trending higher than its historical norms, you've been growing EPS above the sector already. And I just want to confirm that inclusive of all these items that you laid out in the capital side. Do you have line of sight to the CAGR like above the 6% to 8% range?

[Nicholas Campanella, Director at Barclays]

And how should we kind of be thinking about that as you kind of piece together all this capital that's coming down the pipe into the Q4? Thanks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thank you for that question, Nick. And we've had these conversations before. But when you think about the period from 2000 to 2020, our sector had average EPS growth of roughly 3%. Now that changes from time to time. And in recent years, it's been trending higher closer to 4%.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

What I think is going to happen is, I think we're in a significant growth period for our utility sector, what some people referring to as a super cycle. In other words, we expect to see growth through this decade and well into the next decade. And I think you're going to see overall average EPS growth across the sector trend higher. We have traditionally oriented towards 6% to 8%. We think there's kind of an efficient frontier there in terms of balancing that with a strong dividend policy.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

And I think total return is very important to the utility investors that invest in the sector. So we're very comfortable with the 6% to 8% growth rate. And I think the key takeaway from today's call is we certainly have a field of vision to a lot more opportunities in the future. We certainly will be working hard to exceed the high end of that range, but we're comfortable now that with a lot of certainty about the growth backlog we have that we can deliver that range or better.

[Nicholas Campanella, Director at Barclays]

Thanks for that. And then just quickly on the ATM, when do you think you're going to start to need equity? Is it this year or is it next year? You were smart last year to kind of derisk the equity plan ahead of your formal CapEx outlook. So just wondering if that's on the table again. And that's it for me. Thanks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Yes. Thank you very much, Nick. Last year, you recall that we provided a little bit of visibility on our Q3 call to increases in our 5 year capital plan at the Sempra level. And you're correct, we followed up with a roughly $1,300,000,000 secondary offering. I think what was interesting in our fall planning process this year and both Justin and I were with Alan last week in Dallas at their Board meeting, they just have remarkable visibility to growth.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

And I thought it was important for us to signal to our investors that opportunity now rather than wait until the February time frame. We'll obviously give a lot of details in February. But I thought it was important to do that and make sure that we were adding the ATM as an additional tool in our toolbox. And I think many of you have followed the fact that ATMs have become much more common recently as companies seek alternatives to traditional offerings. So at Sempra, we just view it as another option for us to officially finance our business.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

We've sized it at the $3,000,000,000 level. And I think the best takeaway for everyone is when we get to our February call, we're going to provide a full update on our Roll Forward Capital Program, including, Nick, sources and uses of funding, and we'll also be prepared at that time to provide what I hope will be a robust view of 2026 guidance.

[Nicholas Campanella, Director at Barclays]

Many thanks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thank you.

[Operator]

Thank you. Our next question will come from Shar Pourreza from Guggenheim Partners. Your line is open.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Hello Shar.

[Shahriar Pourreza, Senior Managing Director - Head of Energy/Power/Utilities at Guggenheim Securities]

Hey Jeff. How are you doing?

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Great.

[Shahriar Pourreza, Senior Managing Director - Head of Energy/Power/Utilities at Guggenheim Securities]

Let me just quickly want to follow-up on Nick's question on the equity. Just on the $3,000,000,000 of ATM, I couldn't get a sense. Is that fully funding your anticipated CapEx increases or could there be more equity coming especially as we're thinking about potential funding needs at SiP as that ramps up? Thanks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Yes. Thank you for the question, Shar. What we do is we go through a very comprehensive bottom up process in the fall where we force everyone's growth plans inside of Sempra across all three platforms to compete for capital. And as you've seen in the past, the lion's share of our 5 year capital program goes to our U. S.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Utilities in California and Texas. It traditionally takes between 90% 95% of our overall capital plan goes to our utilities. So what we've done at this early juncture is really provide visibility to the fact that there is a significant increase of capital that will be coming out in Oncor's plan when we announced in February. And we thought it was appropriate to make sure we had this additional tool in our toolbox. We're not prepared to talk about when we would use it.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

But I do think we'll provide a lot of detail on our February call.

[Shahriar Pourreza, Senior Managing Director - Head of Energy/Power/Utilities at Guggenheim Securities]

Okay. But the $3,000,000,000 is the $3,000,000,000 We shouldn't, I guess, assume

[Jeffrey Martin, Chairman, President & CEO at Sempra]

it could be higher than that? Exactly.

[Shahriar Pourreza, Senior Managing Director - Head of Energy/Power/Utilities at Guggenheim Securities]

Okay.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Exactly. We feel very comfortable with $3,000,000,000 Excellent.

[Shahriar Pourreza, Senior Managing Director - Head of Energy/Power/Utilities at Guggenheim Securities]

Okay, perfect. And then just in terms of the proposed decision in California, just from a planning parameters standpoint, does the PD present a headwind versus your midpoint expectations? And sort of given the recommendation for lower attrition year revenue increases, could you see CapEx pulling back at SoCal Gas and Sanyo Gas and Electric? Thanks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Yes. What I would describe is in the fall planning process, we're challenging all of our executives to make sure that they've got a fulsome and disciplined approach to capital utilization. So, there is a process of give and take between both projects as well as overall capital by business and over a long period of time, forcing that discipline inside the organization to compete for capital. And it's not just highest return. It's also returns relative to risk.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

So that process is ongoing. Comment I'd make about the PD is we feel there are some aspects of the PD, Shar, that are actually quite constructive. But we noted in our prepared remarks that we also see opportunities to improve decision in areas that we think are very important to our customers, namely safety, reliability and affordability. So we had oral arguments earlier this week and a couple of things we highlighted there where we think additional improvements are necessary is number 1, the need for additional undergroundings to support wildfire mitigation number 2, improvements to integrity management programs. And you recall that's very important for us in terms of operating the natural gas distribution system safely.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

To your point, we do think additional increases in post year funding is important because that has to align with our expected business level of activity. And finally, we're still identifying areas that might offset cost to our customers because of our focus on affordability. And that's mainly in the form of tax benefits. So I would conclude by saying, we'll continue to work collaboratively. We don't want to get in front of our regulator on this.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

But I think we have the chance, Shar, to do 2 things, get to an outcome this year and get to an outcome that's constructive for all of our stakeholders.

[Shahriar Pourreza, Senior Managing Director - Head of Energy/Power/Utilities at Guggenheim Securities]

Got it. Fantastic, Jeff. I'll see

[Jeffrey Martin, Chairman, President & CEO at Sempra]

you in a couple of days. Appreciate it. Thank you, Shar.

[Operator]

Thank you. Our next question will come from Julien Dumoulin Smith from Jefferies. Your line is open.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Hi, Julien.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Hey, good morning. Hey, good to speak to you guys. Thank you so much. Nicely done.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Maybe just picking up on the OnCore side that 40% to 50% range is tantalizing there. Look, I know it's preliminary, but can you give us a little bit of a breakdown? I know you got the $3,000,000,000 with the SRP, but what else is in there, right? When you think about that balance of say roughly $6,000,000,000 to $9,000,000,000 is that Permian Basin? How much of that is low growth?

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Can you give us a little bit of sense of what's baked in in terms of that range and where you go from it?

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Well, Julian, the good news is you live in Texas, so hopefully you've been seeing a lot of this firsthand. For several years now, you and I've had this conversation as well as others. I have consistently said that Encore has the best overall growth program in the country. I think we're seeing that play out in real time. And I think we have an opportunity, Alan, if you don't mind.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Why don't we walk through some of the growth drivers that you're seeing and provide additional color for Julian?

[Allen Nye, CEO at Oncor Electric Delivery]

Yes, you bet, Jeff. And thanks, Julian. We continue to see just very strong growth across our service territory pretty much in all categories of various types of customers that we serve. Strong residential and meter growth, strong growth on our transmission system, especially regarding LC and I interconnections, strong growth in West Texas and Permian and increased opportunities to invest in kind of the transmission backbone of ERCOT to support our customers and bulk power transfers across the state. As I said in my opening remarks or Jeff did, premise growth continues to be very strong.

[Allen Nye, CEO at Oncor Electric Delivery]

We added 19,000 this quarter and we continue to see long term growth around 2% or double the national average. Transmission points of interconnection continue to be a big deal for us. New transmission point of interconnections are up 38% versus the same quarter last year. Total transmission point of interconnections are up 17% versus the same quarter last year. Generation remains very strong.

[Allen Nye, CEO at Oncor Electric Delivery]

We have over 500 projects seeking to interconnect to us right now in our queue. It gives us about a 13% increase over the same quarter last year for generation. The biggest jump continues to be with regards to LC and I customers seeking to connect to our transmission system. We have 3.79 of those right now and that represents a 23% increase over the same quarter last year. But the real story is in requests from what we refer to as large load customers, right?

[Allen Nye, CEO at Oncor Electric Delivery]

The customers that are seeking to interconnect with our system, that are seeking to interconnect at a level of at least 100 megawatts individually all the way up to multiple gigawatts. I think I represent the last quarter that we had about 80 gigawatts of those customers. And a quarter later, we're now up to 103 gigawatts of potential load additions related to that group of customers. Of that 103, 82 gigawatts approximately is data center related and 21 approximately gigawatts is unrelated to data centers. So I just want to make 2 points with regards to that 103 number.

[Allen Nye, CEO at Oncor Electric Delivery]

If you look at our system right now, our current peak load on the OnCore system is about 31 gigawatts. So when you're comparing that to 103 gigawatts, we're looking at potential load additions of more than 3 times our current peak load. That's 1. And then the other point, which I just made briefly a moment ago, is 103 gigawatts this quarter versus 80 gigawatts last quarter represents about a 29% increase in potential load from these types of customers in 1 quarter. So that continues to be a big driver of what we're looking at going forward into February.

[Allen Nye, CEO at Oncor Electric Delivery]

West Texas again remains a great story with the Far West Texas weather zone peaking at about 15% above the 2023 peak. Our 2 transmission loops that we serve the Permian and the Delaware through continue to be strong with the Culberson loop up 26% versus the peak of last year already and the Stanton Loop up 5.7%. So the strong growth we're seeing in West Texas, obviously, we can talk about the Permian Plan in a minute, but it's also leading to what I would call baseload or rather non Permian plan additions in the region, including projects that are coming out of the Delaware Basin project study of 2019. We're presently in stages 2 through 5 of that group of projects, as well as the Permian Basin Load Integration Study project from 2021, which we now refer to as the West Texas infrastructure project. So we have a number of transmission projects moving forward out of those two studies and plans that are separate and apart from the Permian plan.

[Allen Nye, CEO at Oncor Electric Delivery]

Obviously, we still have the Permian plan, Permian Basin Reliability Plan going through the PUC process right now, as well as the extra high voltage plan that was mentioned previously. We've got our SRP still to come, hopefully on November 14. And then we have, of course, the ERCOT revised load forecast of 152 gigawatts as well as the general regional transmission plan coming out in December. So those are a lot of the things that we are looking at with our Board right now. Very excited to have all these opportunities on our system. We think it's a great growth story. And by February, we'll have this all worked out. Thanks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

And then, Julien, what I would add, just to summarize a couple of points from Alan's discussion is growth at Oncor is both geographically diverse and it cuts across all customer categories. And as I said in my prepared remarks, I think that our AI exposure is an understated investment thesis at Sempra. Think about this, Encore has 82 gigawatts of pending interconnection requests for AI. I would challenge any other company in America to put forward a bigger number. And keep in mind, the entire state of California has a 50 to 55 overall gigawatt peak.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

So just an interconnection request for AI only, Oncor is dealing with 82 gigawatts of future opportunities. Their growth is also centered on the most valuable asset in the utility world and that's high voltage transmission. High voltage transmission comprises 60% of their overall capital plan. And I would also add, in addition to broad exposure to growth, Encore benefits from a constructive regulatory compact with tracker mechanisms that we've discussed before, they're being filed twice annually to true up for T and D investments. So it is a remarkable growth story.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

It is remarkable exposure to transmission and particularly from customer growth in AI. And I think it's got one of the best regulatory compacts in the country.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Yes, those are truly phenomenal statistics. Thank you for sharing. And I agree, I see it. With that said, actually, you're talking about 60% is high voltage. What are you guys reflecting in that range on the 765, the higher element on the transmission?

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Is that basically the upper end there? Just to clarify.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Yes. As we went through our prepared remarks, there's about $13,000,000,000 in that Permian plan, which I think assumes a 345 kV. But I think the most important thing that Alan mentioned was is the PUCT will be making a determination as to whether that's a 345 upgrade and build out in May or whether it's 765. So that remains to be seen. We'll know the answer to that for next year.

[Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group]

Yes. Excellent. All right, guys. Well, best of luck. You got a lot on the plate here.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thank you, Julien.

[Operator]

Thank you. And our next question will come from Carly Davenport from Goldman Sachs. Your line is open.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Hi, Carly.

[Carly Davenport, Vice President, Equity Research at Goldman Sachs]

Hey, Jeff. How are you? Thanks so much for taking the questions. Maybe just to start on the LNG business, any are you anticipating any changes to the outlook there just as a result of the administration changes? And then as you think about Port Arthur Phase 2, is the permit sort of the last gating factor that would determine when you take FID on that project?

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thank you. And maybe we've got Justin Bird with us here who is the CEO of Sempra Infrastructure. Perhaps Justin you can walk through Port Arthur Phase 2 and then speak to the permit issue that Carly referenced.

[Justin Bird, Executive Vice President & CEO at Sempra]

Yes. Hi, Carly. As Karen noted in her prepared remarks, we continue to advance Port Arthur 2, and I'd say we've made considerable progress. As noted on our Q2 call, we saw an increased interest in Port Arthur II, and I'm happy to say that interest has further increased since the call and momentum continues to build. Commercial discussions for offtake and project equity are ongoing, and I think we're seeing better terms.

[Justin Bird, Executive Vice President & CEO at Sempra]

We have our 20 year agreement with Aramco for 5,000,000 tons per annum as well as 25 percent of the equity. Our EPC agreement with Bechtel allows for continuous construction. We view that as a competitive advantage. And on the permitting side, as you noted, we're waiting for our DOE non FTA export permit, and we expect that to be resolved in the first half of next year. We continue to identify sources of financing for the project and advance the other key milestones to put us in a position to take a final investment decision.

[Justin Bird, Executive Vice President & CEO at Sempra]

To wrap up, I'd say the expansion of Port Arthur is a terrific opportunity and we look forward to advancing the project.

[Carly Davenport, Vice President, Equity Research at Goldman Sachs]

Great. That's really helpful commentary there. And then maybe just to shift quickly back to Texas and appreciate all of the commentary there so far. Just as you look forward to 2025, is there anything that you'd highlight that you're looking out for in the legislative session in Texas that could impact the growth outlook there?

[Jeffrey Martin, Chairman, President & CEO at Sempra]

No. I would just say that I think that based upon the meetings we had last week, I think, obviously, 2025 will be the biggest capital deployment year, I think, in that company's history. The team is putting together their overall legislative strategy for next year. And Alan, perhaps you could just mention if there's anything notable that you want to discuss.

[Allen Nye, CEO at Oncor Electric Delivery]

No, Jeff, I think you covered it. I mean, Carly, there's obviously a lot of chatter in Austin about utility issues. We've had that before. I think we are in an excellent position going into this session as Encore. Obviously, we're going to have to deal with things like the fallout from Hurricane Beryl.

[Allen Nye, CEO at Oncor Electric Delivery]

But there is nothing that I am overly concerned about right now. Obviously, we'll have to wait till a few more weeks until we see what bills get filed. But we are more than ready to handle anything that comes our way. And I'm confident and excited going into session to see what we can do.

[Carly Davenport, Vice President, Equity Research at Goldman Sachs]

Great. Thanks so much for the time.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thanks, Carly.

[Operator]

Thank you. Our next question will come from Durgesh Chopra from Evercore ISI. Your line is open.

[Durgesh Chopra, Managing Director at Evercore]

Hi, Durgesh. Hey, Jeff. Thanks for taking my time. Hey, just can I go back to the equity really quickly? I just want to clarify something.

[Durgesh Chopra, Managing Director at Evercore]

The $3,000,000,000 does that is that basically all the equity that you need as you roll forward the plan from the 5 year plan, 25 to 29, can you clarify that? And then maybe any color that you can share in terms of timing of the $3,000,000,000 equity? Does that have to be done next year or will it be spread out throughout the planning period? Thank you.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Sure. I'll just start by Durgesh reviewing what our goal is for February. On our Q4 call, our convention has been to really present our 5 year capital plan, almost like an analyst conference, frankly. And when we do that, we reconcile the balance sheet and do kind of a deep dive into sources and uses of funding. So that conversation is probably more appropriate for February.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

What we also do in February is we tend to basically go into prompt year guidance. So we'll release 2026 guidance at that time. We've always felt like if we have some early visibility in the fall before you get to February where we can kind of guide the Street to our expectations, we think that's always been viewed helpful. So I think we had a real opportunity today to come forward with a very bullish muscular view of our Texas capital program. We'll fine tune that and come out with more details in February.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

And likewise, on the ATM, we just view this as another financing alternative for us. Our job is to make sure we compete capital internally. We are also using hybrids as part of our overall funding mechanism and having the A team in place we think is being thoughtful.

[Durgesh Chopra, Managing Director at Evercore]

Got it. Okay. I just wanted to clarify that. It looks like we're going to get more color. Can I just quickly ask you one more question? Just anything on the LNG permit pause given the sort of the election results? Previously you kind of talked about sorry, go ahead, Jeff.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

No, I'm sorry. Please finish your question.

[Durgesh Chopra, Managing Director at Evercore]

No, that's it. Just any updates there as it relates to the pause?

[Jeffrey Martin, Chairman, President & CEO at Sempra]

No, I would just say that maybe as a maybe a higher level comment. We have tended to kind of run our business as a nonpartisan business, right? We don't focus on one party or the other. Remember, about 6 years ago, we refocused our business from energy to energy infrastructure. And historically, that's been an area of strong bipartisan support.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

And frankly, even under the Biden administration, there was bipartisan support for the infrastructure bill. And I think as we look forward, when we think about delivering cleaner and secure energy, it's not more about one party or another. It's about doing what's best for our country and for our customers. So when it comes to LNG, we've always had a constructive view that America has an opportunity to play a larger role in the world. I think you're going to continue to see this country assert a leadership position in the production of energy.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

It's going to basically benefit our domestic uses. Hopefully, it will continue to support a growing economy here in the United States. But look, quite frankly, we have an increasingly important role in serving our allies abroad and LNG is a very, very important tool of American foreign policy. I think you'll continue to see us take an important role at Sempra Infrastructure. And I think we have growing confidence in getting the permits we need for Port Arthur Phase 2 in the first half of next year. Thank you, Jeff.

[Durgesh Chopra, Managing Director at Evercore]

Thank you.

[Operator]

Thank you. And we now have time for one more question. And our last question will come from Steve Fleishman from Wolfe. Your line is

[Jeffrey Martin, Chairman, President & CEO at Sempra]

open. Good morning, Steve.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Yes, good morning. Thank you. Appreciate it. The just going back to the California case, you mentioned and affordability seems to be a focus and you mentioned the tax related benefits that could be something you suggested. Could you give a sense of just how much that could impact rates to the benefit of customers in your thinking on that?

[Jeffrey Martin, Chairman, President & CEO at Sempra]

No. I think what took place in the proposed decision was they outlined what they thought the changes in step up in revenue requirement was for year 1 and then through the attrition years. And I think we're being really focused on making sure that we can operate our system safely. We're working with all the different parties who are part of the proceeding. And as you do that, it's important if you're trying to propose additional funding that you're also trying to find ways to reduce costs.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

So I think what took place in the oral argument this week was we outlined a series of opportunities where we thought that customers would benefit from additional safety investments including to integrity programs and to our wildfire undergrounding programs. And I think to do that, we've also proposed some additional tax benefits that would lessen the impact to customers. So this is a process in California where you try to work with all the different stakeholders to get to a good outcome. And I think we have some confidence, Steve, that we'll get that done this year and then we'll get to an outcome that people feel good about.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

That's good. And just based on the kind of proposals you made there like the attrition adjustments, what would they be roughly per year relative to the proposed decision?

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Yes. What I don't want to do is I don't really want to front run the process we're in right now. We're actually making some comment filings tomorrow. And what we want to do is let the process roll forward, give everyone the opportunity to participate in it. I think the decision itself that we have today that's proposed, there's a lot of constructive aspects to it, but we're very deeply involved in it right now, Steve, over the next couple of weeks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

So, I'd prefer to let the process play out. And our comments tomorrow, I think, will be instructive to your question.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Okay. Understood. And then lastly just on Encore which is phenomenal. I remember you raised your capital plan to $48,000,000,000 overall from I think 40 dollars back. I think that was early this year or late last year.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Would this be all incremental to the $48,000,000,000 for all of Sempra? Were some of that already including somewhat higher capital at Encore? There's been so many capital increases, it's hard to keep track of it.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thank you for framing a high class problem, by the way. So, look, we're going through a very disciplined process. This is not a process at Sempra where you just put one project on top of another project and sum up the total of the capital. We do, Steve, really go through a rigorous process to make capital compete.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

But there's no question that the growth we're seeing in Encore will be incremental to our 48 and there's still opportunities in our other two business platforms to also grow their capital needs. So that process is underway today. But clearly, the Encore program is incremental to the 48.

[Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC]

Okay. Thank you.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Thank you.

[Operator]

Thank you. That concludes today's question and answer session. At this time, I'd like to turn the conference back to Jeff Martin for any additional closing remarks.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

Well, we certainly appreciate everyone joining us on the call today. I'd like to close out with a few summary comments. First, we're optimistic about finalizing our general rate cases here in California by the end of the year and we'll work with all parties to get to a constructive outcome. 2nd, I was pleased that we're able to update everyone today on developments at Encore. We see significant investment opportunities in Texas from the SRP program, diverse customer growth across Encore service territory including connection requests from data centers totaling 82 gigawatts.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

We also see new investments necessary to support growth in the Permian Basin and expanding the transmission backlog for ERCOT. Note that at our infrastructure business, we continue to operate a growing portfolio of assets and also are managing several major construction projects simultaneously, which should together translate into higher levels of growth in the future for Sempra. And finally, the strength of our 3 combined growth platforms gives us a lot of confidence and continue to grow our business while delivering shareholder value over the long term. I would also like to mention that Trevor Mihalik will be retiring at the end of the year and has served at Sempra for over a decade, held numerous leadership positions and been a great partner to me. Please join me in thanking Trevor for all of his contributions.

[Jeffrey Martin, Chairman, President & CEO at Sempra]

If there are any follow-up items, please reach out to our IR team with your questions and we certainly look forward to seeing meeting you at EEI in Florida next week. This concludes our call.

[Operator]

Thank you for your participation. You may now disconnect.

Participants

Executives

• Jeffrey Martin, Chairman, President & CEO
• Karen Sedgwick, Executive VP & CFO
• Justin Bird, Executive Vice President & CEO

Analysts

• Glen Donovan, Vice President of Investor Relations at Sempra
• Allen Nye, CEO at Oncor Electric Delivery
• Nicholas Campanella, Director at Barclays
• Shahriar Pourreza, Senior Managing Director - Head of Energy/Power/Utilities at Guggenheim Securities
• Julien Dumoulin-Smith, Research Analyst at Jefferies Financial Group
• Carly Davenport, Vice President, Equity Research at Goldman Sachs
• Durgesh Chopra, Managing Director at Evercore
• Steve Fleishman, Managing Director and Senior Analyst at Wolfe Research LLC