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SDG&E's parent company, Sempra reported 2021 earnings of 2.6 billion

Sempra's California utilities predict $21.2 billion in capital projects by 2026.

SAN DIEGO — During a live webcast Friday, Sempra Energy not only reported $2.6 billion in adjusted earnings for 2021; the company’s CEO, Jeff Martin, also laid out projected capital expenditures over the next five years.

“Record 5-year capital plan of $36 billion, with nearly 94 percent dedicated to our utilities,” Martin told shareholders listening online.  Sempra's California utility companies predicted $21.2 billion in capital projects by 2026.

It came as no surprise that most of Sempra's capital projects come from its utilities, like SDG&E, because the company gets a built-in profit on those approved expenditures and ratepayers foot the bill.

Credit: SEMPRA

Currently, SDG&E's return on equity is 10.2 percent, as approved by the California Public Utilities Commission (CPUC).

“It strikes me as, as kind of high,” said Alan Gin, a professor of economics at the University of San Diego.

“Utilities are regulated and so they are allowed to earn a certain return based on their capital and, in the past, that has sometimes led utilities to sort of game the system by expanding a lot on capital and then trying to get a return,” said Gin.

CBS 8 asked Gin to take a look at Sempra's recent earnings report.

“Well, I think consumers are probably going to be unhappy because they're paying these increased rates, the highest in the nation actually.  And, yet, the company is taking that and then giving it out as dividends to their shareholders, and they're also using it to repurchase stock, which is benefiting the shareholders as opposed to the customers,” said Gin.

Meanwhile, SDG&E attorneys have been arguing before the CPUC this week, that their company has been hit hard by the pandemic, and that SDG&E's profit rate should not be automatically reduced.

SDG&E paid one financial expert more than $650 an hour to testify at the CPUC evidentiary hearings on Thursday and Friday, in support of the utility’s argument that profits need to stay at 10.2 percent in order to attract capital investors.

Back in San Diego, Sempra CEO, Jeff Martin, told shareholders on Friday morning, “We invested over $7 billion dollars in critical energy infrastructure, a record amount for our company.”

Sempra’s adjusted earnings of $2.6 billion for 2021 include income from all its companies.  SDG&E’s earnings for 2021 were reported as $819 million.

   

WATCH RELATED: Sempra company fined $10 million for ‘unlawful’ lobbying 

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