Likewise, SB 410 is passed in California, very similar to some of the initiatives in Texas. And this, again, allows for reduced lag between rate cases on some of these investments around electrification. So we’re going to be very thoughtful about making sure that when we grow our rate base you’re going to see earnings growth really track that rate base over time. So we’ve taken these things into consideration. We’re midway through our financial planning process for the fall. We feel great about the direction things are going for the company. We have a lot of growth ahead of us. But anytime you see this level of growth, what Trevor and I are focused on is making sure that we’re driving discipline throughout the organization in terms of how we allocate capital and how we source capital.
Julien Dumoulin-Smith: Got it. So, more consistent level, or actually, could you see improvement on earned returns?
Jeff Martin: I think, our job is and we have multiple meetings about this we’re trying to improve returns in all three of our growth businesses all the time. That’s clearly right in our wheelhouse of the discussions of the management team.
Julien Dumoulin-Smith: Excellent. Thank you. Best of luck here, and I’ll see you soon.
Jeff Martin: All right, sounds good.
Operator: Thank you. We have time for one more question, and our last question will come from Nicholas Campanella from Barclays. Your line is open.
Jeff Martin: Hi, Nick.
Nicholas Campanella: Hey. Thanks to squeeze me in. How’s everyone doing? Hey, I just wanted to follow up on the segmentation for California. Just what’s the ultimate goal? Is it just to simplify the structure from a reporting standpoint, or is there benefits that could be realized for customers and shareholders if you were to kind of pursue something from a regulatory standpoint? I just acknowledge that SoCalGas and SDG&E are pretty close on the filing paths and just wanted to take your temperature there.
Jeff Martin: Sure. Now, obviously, this is something that we’re still evaluating but remember, over the last three or four years, one of my priorities with our Board has been to simplify our business model. And I’ve talked about it a fair amount, Nick, that anytime you can simplify your business, take risk away from how you execute, you can make your business more valuable. So we’ve boiled this business down from to having really three primary growth platforms Sempra, Texas, Sempra California, and Sempra Infrastructure. And all we’re really evaluating at this point is, would it make sense for us as key executive decision makers to make sure that our accounting reflects how we think about and manage the business? This is something we’re going to evaluate over the next several months and come back to you guys on Q4.
It’s no major legal reorganization. It’s not that at all. It’s just a matter of does it not reflect a more simplified form of how we manage and operate the business.
Nicholas Campanella: Okay, great. And then maybe I could just kind of come back to some of the questions on the growth rate. Quick, like I understand that cost of capital is, reflected in the range of outcomes here but you have a lot of positives that you just talked about in Texas – obviously, financing is a moving target, but should investors still just be expecting you to do the six to eight no matter what the scenario? Or do you see upward pressure to the growth rate?
Jeff Martin: No, I appreciate that question, and we’re always looking to put upward pressure on that growth rate. But the way we’ve always oriented is we don’t think about a 6% to 8% growth rate as a year-over-year issue or necessarily even a five year planning issue over long periods of time. We’re one of the few companies in our sector that have been able to deliver those type of results. So over a 20 year period of time, we’ve grown our earnings per share at a 7% CAGR in the last 10 years, we’ve grown it at an 8% CAGR in the last three or four years, we’ve grown it at rates much higher than that. So I think our orientation is you’re talking about a sector that has traditionally grown EPS at 3% or 4%. We’re very comfortable that over long periods of time that we can deliver a 6% to 8% growth rate.
But I think you’re on the right track. We’re certainly talking about a unique set of growth drivers in front of the business today. So we as a management team would always be looking to see if we could not push and exceed those expectations, if possible.
Nicholas Campanella: Hey, I appreciate it. And happy Friday. Thank you.
Jeff Martin: Hey, I appreciate it, Nick.
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.
Jeff Martin: Thank you. Before we close out the call, I wanted to thank everyone who took the time to join today. I know it’s been a busy week with a lot of earnings calls. Here’s a few key takeaways. Number one, we had a strong quarter of financial results with year to date results trending ahead of the comparable period in 2022, which you will recall was a record year for the company. As a result, we’re guiding our adjusted EPS to at or above the high end of our guidance range. Number two, we’re also seeing a portfolio of new opportunities, particularly in Texas, to deploy higher levels of investment and are expecting to raise our five year capital plan by 10% to 20%. I’d also want to mention that we’ll be attending EEI next weekend in Phoenix and very much look forward to spending time with each of you in person at that time. Thank you again for joining. This concludes our call.
Operator: Thank you for your participation. You may now disconnect.
