Sempra - 5.75% NT REDEEM 01/07/2079 USD 25

Strong earnings momentum + unchanged guidance (good): - Q2 2026 GAAP: $796M / $1.21 per diluted share vs $461M / $0.71 in Q2 2025. - Q2 2026 adjusted: $762M / $1.16 vs $583M / $0.89 (clear year-over-year improvement). - Full-year 2026 adjusted EPS guidance reaffirmed: $4.80–$5.30. - 2027 adjusted EPS guidance reaffirmed: $5.10–$5.70. - Long-term EPS growth rate reiterated: 7%–9%. - Management attribute upside to operating execution across Sempra Texas / Sempra California / Sempra Infrastructure.

Texas (Oncor) remains the core driver; data center pause isn’t changing the long-term thesis (surprising/important): - Texas hit ERCOT all-time peak load of 91 GW (last month), signaling demand growth is happening, not hypothetical. - Encore/Oncor positioning: a “multi-decade” grid modernization opportunity; base capital plan continues, with potential upside beyond base plan. - A key message: any “batch zero” related investments are characterized as potential upside beyond Oncor’s base capital plan, i.e., not necessarily threatening base-plan economics. - Policy risk acknowledged via public rhetoric on generation/behind-the-meter vs transmission, but leadership argues the framework is evolving toward cost allocation and more durable rules.

Batch Zero opportunity is real but timeline/legs are uncertain (opportunity + risk): - PUCT approved ERCOT’s “batch zero” process to sequence large-load interconnections. - Expected eligible large-load amount on Oncor transmission: 44 GW total = 27 GW “base load” (no additional studies) + 17 GW “studied load” (new reliability analysis). - Context: 44 GW would be ~+140% vs Oncor’s ~31 GW peak, a magnitude that could meaningfully impact capital needs. - Oncor already holds ~ $6B collateral from large-load customers; > $2B tied to the 44 GW batch submissions. - Uncertainty/risk: ERCOT will study impacts and identify if additional transmission is required; PUCT/process timing may shift (good-cause exception discussions were mentioned as a next milestone). - Management expectation: detailed incremental capex visibility may come later (they signaled they’ll update on the Q4 call, not mid-stream).