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

Strong Q1 financials; reaffirming full-year guidance - Reported GAAP Q1 2026 earnings: $1.37M / $1.58/share vs $906M / $1.39/share in Q1 2025. - Adjusted Q1 2026: $991M / $1.51/share vs $942M / $1.44/share in Q1 2025. - Full-year 2026 adjusted EPS guidance reaffirmed: $4.8–$5.3; 2027 adjusted EPS: $5.1–$5.7. - Company reiterated long-term EPS growth outlook: 7%–9% (one of the highest in the utility sector).

Oncor (Texas) key positives: improved allowed returns + reduced regulatory lag; major execution/capex pipeline - PUCT base rate review approval: authorized equity layer 43.5%, ROE 9.75%, cost of debt 4.94%. - Surcharge mechanism allowed for the difference between new vs current rates for 1/1/2026–6/1/2026, recovered via separate filing over the remainder of the year. - UTM filing (inaugural) to incorporate $4.4B of T&D assets placed in service since 1/1/2025, to reduce regulatory lag; can be filed every 365 days. - Management expects Oncor to move earned ROE closer to authorized ROE (~9.75%), supporting high earnings growth: ~30% annually through midpoint of 2027 guidance. - Investment/plan context: Oncor has a $47.5B capital plan plus identified ~$10B incremental CapEx opportunities tied to large-load/data-center growth.

Surprising/very large demand signal but still “process-dependent”: Batch 0 & RTP scheduling could shift timing - Oncor references 127 GW of qualifying load in ERCOT processes (up from ~38 GW previously). - Management called the “quality” comparable to earlier high-confidence terminology; however, rule/commission actions could still move numbers. - ERCOT process timeline (as understood): - Finalize inclusion criteria: July 2026 - Batch study: Jul 2026–Jan 2027 - Load commitment: ~Feb 2027 - Refinement study: Mar–May 2027 - RPG submission: June 2027 - Important implication for investors: physical buildout/upgrades and resulting utility capital deployment are dependent on these regulatory milestones and infrastructure readiness (not just “queue size”).