Sempra Energy (SRE) Q4 2021 Earnings Call Transcript

Sempra Energy (SRE 0.73%)
Q4 2021 Earnings Call
Feb 25, 2022, 12:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Sempra fourth quarter earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Nelly Molina.

Please go ahead.

Nelly Molina -- Vice President, Investor Relations

Good morning, everyone, and welcome to Sempra's fourth quarter 2021 earnings call. A live webcast of this teleconference and a slide presentation is available on our website under the investors section. We have several members of our management team with us today, including Jeff Martin, chairman and chief executive officer; Trevor Mihalik, executive vice president and chief financial officer; Lisa Larroque Alexander, senior vice president, corporate affairs and chief sustainability officer; Justin Bird, chief executive officer of Sempra Infrastructure; Faisel Khan, chief financial officer of Sempra Infrastructure; Allen Nye, chief executive officer of Oncor; Kevin Sagara, executive vice president and group president; and Peter Wall, senior vice president, controller and chief accounting officer. 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 statements we make today. The factors that could cause our actual results to differ materially are discussed in the company's most recent 10-K filed with the SEC. All of the earnings per 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 annual report on Form 10-K for the year ended December 31, 2021. I'd also like to mention that the forward-looking statements contained in this presentation speak only as of today, February 25, 2022, 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. With that, please turn to Slide 4, and let me hand the call over to Jeff.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Nelly, and thank you all for joining us today. In 2021, we delivered another year of strong performance. We'll discuss some of the operating highlights in a moment. But on the financial side, we invested over $7 billion in critical energy infrastructure, a record amount for our company, and we delivered full year 2021 adjusted earnings per share of $8.43 well above our increased adjusted EPS guidance range of $7.75 to $8.35 per share.

The strength of that performance, together with a portfolio of investment opportunities across all three of our growth platforms gives us a lot of confidence in the future. Today, we're announcing approval by our board of directors of an increased annualized dividend of $4.58 per share, consistent with our long-standing commitment to return value to our shareholders, record five-year capital plan of $36 billion with nearly 94% dedicated to our utilities, continued confidence in our full year 2022 EPS guidance range and the issuance of our full year 2023 EPS guidance range. And finally, we're announcing a projected long-term EPS growth rate for the company of 6% to 8%. Please turn to the next slide.

Next, I'd like to highlight a few of our accomplishments. From a strategic standpoint, we've made great progress over the last four years in updating our portfolio with three goals in mind: first, prioritizing markets with strong fundamentals and constructive regulation; second, simplifying our business model to improve execution; and third, building scale, financial strength and a high-performing culture to deliver improved financial results. 2021 was another key milestone in that journey. We've completed a series of transactions to form Sempra Infrastructure, a simplified growth platform with scale and portfolio synergies, all while generating over $3 billion by selling a noncontrolling interest to support growth and the return of capital to our owners.

Furthermore, these transactions highlight the underlying market value of this business and demonstrate Sempra's continued ability to source lower cost of capital and recycle it into organic growth at our utilities. Moving on, we continue to advance our capital plan in 2021, deploying over $7 billion with a continued focus on supporting the strong growth at our utilities. From a safety standpoint, we had record employee safety results at Sempra California and Sempra Infrastructure also had a great year, advancing construction at ECA LNG Phase 1 on time and on budget with over 1 million hours worked without a lost time injury. Taken together, these accomplishments and the quality of execution we're seeing across our businesses, gives us confidence in our ability to capitalize on future growth opportunities.

Please turn to the next slide. Sempra's growth platforms are strategically positioned in highly attractive and contiguous markets in North America where we serve one of the largest utility consumer bases in the United States. Each of these growth platforms have both scale and a leadership position in our core markets, and that is central to our strategic execution. Please turn to the next slide.

Our growth platforms benefit from three main competitive advantages. Size and scale in attractive markets, lower risk and strong recurring cash flows associated with T&D investments and positive growth trends centered on the expansion of energy networks to support cleaner forms of energy, improve safety and reliability and the continued integration of North American energy markets. Our three platforms combined for nearly 300,000 miles of transmission and distribution lines, all in key markets in North America, while serving nearly 40 million consumers. These integrated growth platforms generated approximately $2.6 billion in 2021 full year adjusted earnings and position us to grow earnings well into the future.

Trevor will walk through the details on our long-term growth drivers later in the presentation. But at a high level, our projected growth of 6% to 8% is supported by strong continued investment at Sempra California to support safety, reliability and the state's ambitious energy transition goals; investment in our Texas utilities to support strong economic growth and a significant interconnection queue loaded with renewables; and, disciplined investments at Sempra Infrastructure for fully contracted assets currently under construction; and, potential upside to projected growth from projects we currently have in development. Finally, I think it's worth noting that the vast majority of our assets have some form of inflation protections built into them, either through regulatory constructs such as upcoming rate cases or pass-through mechanisms on our Infrastructure projects. Additionally, given our strategic focus on T&D Infrastructure, the lower risk section of the energy value chain, we believe we've reduced our exposure to many of the traditional risks in the energy space whether it's commodity exposure, extreme weather, retail credit or stranded generation investments.

As we continue to advance our role as a leader in the energy transition, we're also creating an opportunity on this call and future calls for our chief sustainability officer, Lisa Alexander, to update you on our progress. Please turn to the next slide.

Lisa Alexander -- Chief Sustainability Officer

Thanks, Jeff. For two decades, Sempra has been on a sustained path to decarbonize our business operations and the markets we serve. Innovation and new technologies are central to a clean energy future, enabled by investments in three key capabilities: decarbonization, diversification and digitalization. This past year, we summarized our aspirations in each of these areas as part of Sempra's Energy Transition action plan, and I'm pleased to update you that we're making great progress.

Here are a few examples. In California, SDG&E completed its inaugural issuance of $750 million in green bonds and secured regulatory approval for three new energy storage projects expected to total 161 megawatts. Additionally, SoCalGas achieved over 4% renewable natural gas deliveries to core customers in 2021. Moving to Texas.

Oncor is doing an excellent job connecting customers to cleaner renewable sources of energy by expanding and modernizing Texas' vast transmission and distribution network. In 2021, Oncor connected nearly 2,200 megawatts of wind and solar generation, bringing the total renewables connected to Oncor system to approximately 15,500 megawatts. In addition to progress on its operations, Oncor has also entered into a new $2 billion revolving credit facility with sustainability-linked performance metrics. And lastly, at Sempra Infrastructure, the newly consolidated platform is advancing opportunities in renewables, hydrogen, ammonia, LNG and carbon capture infrastructure.

The company recently filed an amendment with FERC to incorporate electric drives at our proposed Cameron LNG Phase 2 project, which could help reduce facility emissions by up to 40% while continuing to help decarbonize global markets. Earlier this year, the company also announced an MOU with Entergy to develop options intended to accelerate deployment of renewable energy to power primarily LNG facilities. Across our industry, companies are adjusting their business models to meet customer demands for increasingly cleaner sources of energy. At Sempra, we think these trends play to the strength of our company and effectively create a tailwind for new and cleaner investments across our platforms.

Please turn to the next slide, where I'll hand the call over to Trevor to provide business and financial updates.

Trevor Mihalik -- Executive Vice President and Chief Financial Officer

Thanks, Lisa. To begin, we've had several positive developments at our operating companies. In the third quarter, SDG&E filed an application with the CPUC to assess its cost of capital for 2022 as a result of the extraordinary event of the COVID-19 pandemic. In December, the CPUC issued a scoping memo with a final decision expected later this year.

Also, the CPUC authorized a memorandum account effective January 1, 2022, to track any differences in revenue requirements resulting from the interim cost of capital decision expected later this year. Additionally, the CPUC is working through the implementation of a renewable natural gas procurement standard. We're excited about this development and view it as a significant step forward in advancing the future of cleaner fuels here in California. Lastly, SoCalGas recently announced a bold new vision to develop a proposed green hydrogen infrastructure system to serve the Los Angeles Basin called Angeles Link.

As contemplated, this project would be the nation's largest green hydrogen infrastructure system and will deliver green hydrogen to the country's largest manufacturing hub to help decarbonize electric generation, industrial processes, heavy-duty trucking and other sectors that are challenging to fully electrify. Shifting to Texas. Oncor set a company record for the number of new and active requests received for transmission interconnections in 2021 demonstrating the rapid growth in Texas and continuing opportunities for Oncor to grow its system. Oncor service territory continued to grow as well, with Oncor connecting approximately 70,000 additional premises in 2021.

At Sempra Infrastructure, we signed two MOUs to advance our unique capability of delivering LNG into both the Atlantic and Pacific basins. The first with Entergy that Lisa discussed earlier and the second, an MOU with CFE to jointly develop Vista Pacifico LNG, as well as a new regasification project in La Paz, Baja California Sur. Additionally, Sempra Infrastructure established a new credit facility in the fourth quarter and issued its inaugural investment-grade bonds last month, all with the intention of efficiently financing its growth along with internally generated cash flows. Please turn to the next slide where I'd like to go into additional detail on an update relating to Sempra Infrastructure.

Here, the key takeaway is that we're making progress on our announced sale of an additional 10% interest in the business to ADIA. This transaction, which is subject to customary closing conditions and third-party and regulatory approvals, valued Sempra Infrastructure at an enterprise value of approximately $26.5 billion, which was $1 billion higher than the KKR transaction. We expect to use the proceeds to fund utility capital, execute share repurchases and continue supporting improvements in the balance sheet. Please turn to the next slide where I'll review the financial results.

Earlier this morning, we recorded fourth quarter 2021 GAAP earnings of $604 million or $1.90 per share. This compares to fourth quarter 2020 GAAP earnings of $414 million or $1.43 per share. On an adjusted basis, fourth quarter 2021 earnings were $688 million or $2.16 per share. This compares to our fourth quarter 2020 earnings of $668 million or $2.28 per share.

Full year 2021 GAAP earnings were $1.254 billion or $4.01 per share. This compares to 2020 GAAP earnings of $3.764 billion or $12.88 per share. On an adjusted basis, full year 2021 earnings were $2.637 million or $8.43 per share. This compares favorably to our previous full year 2020 adjusted earnings of $2.342 billion or $8 per share.

Please turn to the next slide. The variance in full year 2021 adjusted earnings compared to the prior year was affected by the following key items: $78 million of lower earnings due to the sales of our Peruvian and Chilean utilities in April and June of 2020, respectively. $126 million of lower earnings from a CPUC decision in 2020 that resulted in the release of regulatory liabilities at Sempra California related to prior year's forecasting differences that are not subject to tracking in the income tax expense memorandum account. This was offset by $216 million due to higher earnings from Cameron LNG JV primarily due to Phase 1 achieving full commercial operations in August of 2020, and asset and supply optimization primarily driven by changes in natural gas prices and higher volumes.

$139 million of lower losses at Parent and Other, primarily due to the lower preferred dividends from the mandatory conversion of preferred stock and lower net interest expense. $52 million of higher CPUC base operating margin, net of operating expenses at SDG&E and SoCalGas, $44 million charge in 2020 for amounts to be refunded to customers related to the energy efficiency program at SDG&E, $37 million of higher earnings at Sempra Texas Utilities, primarily due to increased revenues from rate updates to reflect increases in invested capital and customer growth. Please turn to the next slide. We continue to see robust opportunities to invest in our Utilities and Infrastructure businesses, resulting in a $36 billion five-year capital plan, the largest in our history.

And notably, a $4 billion increase over the prior plan we announced last year. This plan is anchored by $33 billion of Utility investments, representing nearly 94% of the total capital plan. For SDG&E and SoCalGas, safety and reliability continue to be at the forefront of our planned expenditures. This is important.

Our investments in California centered around the state's regulatory priorities including wildfire safety and the integrity and safety of our gas infrastructure along with technology investments. Additionally, at Oncor, the capital plan addresses the strong organic growth. For example, the population of Texas increased more than any other state in 2021, continuing the need for further investments to support this growing demand. Please turn to the next slide.

These capital investments in top-tier markets in North America are driving tremendous growth in our projected rate base. In 2017, we had $14 billion of rate base at the California utilities. And through adding our interest in Oncor, as well as organic growth at both our California and Texas utilities, we grew our rate base to $41 billion in 2021 and expect to grow it even further to $62 billion by 2026. Just as importantly, we expect to support this strong projected growth without issuing common equity.

Notably, over the next five years, our rate base mix is not expected to change materially with approximately 70% of total rate base dedicated to electric infrastructure, which reflects how well-positioned we are to continue supporting strong trends in electrification in our core utility markets. Please turn to the next slide where I'll provide additional details on the opportunities we have to efficiently fund our growing rate base. As we think about our financing strategy, we have multiple opportunities to efficiently fund the expansive growth that we're experiencing at our utilities. Over the past few years, you've seen us rotate capital to fund utility growth while also strengthening the balance sheet, finishing 2021 in a strong position with 47% total debt to capitalization and 18% FFO to debt.

Looking forward, our financial plan is underpinned by a portfolio of strong operating cash flows that are backed by regulated returns or long-term contracts. Our robust utility capital plan is further supported by cash generated from Sempra Infrastructure where projected cash distributions to Sempra, combined with the proceeds from the sales to KKR and ADIA are expected to provide over $7 billion from 2021 through 2026. Turning to the dividend. We continue to target a payout ratio of approximately 50% to 60%, which allows us to aggressively invest in utility growth while supporting the dividend.

In addition to the dividend, we see opportunistic share repurchases as a way to efficiently return capital to shareholders from time to time. We remain focused on delivering shareholder value. And through this efficient financing strategy, we expect to deliver strong EPS and dividend growth without issuing external common equity. Please turn to the next slide where I'll discuss our near-term EPS guidance ranges and projected long-term EPS growth rate.

We're reaffirming our 2022 EPS guidance range of $8.10 to $8.70 per share, and we're introducing our 2023 EPS guidance range of $8.60 to $9.20 per share. The aforementioned guidance includes plans to continue returning capital to our owners in the form of $1 billion of share repurchases. This would be an addition to the $500 million of share repurchases we recently completed. Now let me talk about our longer-term growth.

Our historical execution, combined with the growth opportunities in front of us, give us confidence in providing a long-term EPS growth rate of an annual average of 6% to 8% starting at the midpoint of 2022 EPS guidance through 2026. This 6% to 8% growth is driven by our five-year capital plan and continued operational excellence across our businesses. It is anchored by an 8.5% projected rate base growth at our utilities and only includes projects currently in construction at Sempra Infrastructure. Importantly, we see opportunities to outperform this projected growth rate through incremental investments across our three platforms.

A few examples would include additional spending on energy storage, wildfire mitigation, electric vehicle infrastructure and related make-ready work and pipeline safety and reliability in California, further economic growth driving transmission and distribution expansion in Texas and lastly, executing on incremental LNG and other development projects at Sempra Infrastructure that are currently outside the plan. Please turn to the next slide where I'll highlight our historical execution. This slide is a good depiction of how we've historically met or exceeded our published EPS guidance ranges and done so consistently, reflecting our long track record of disciplined capital allocation, thoughtful execution and a commitment to deliver on our financial projections. Please turn to the next slide.

Let me summarize our investment proposition. We've invested time and energy in building a high-performing infrastructure company that is well-positioned in some of the fastest-growing markets in North America, overlaid with a commitment to capital discipline, we have a track record of operational excellence, disciplined financial execution and dedication to consistently returning value to our shareholders in the form of dividends and opportunistic share repurchases. Bottom line, we're excited about the future of Sempra and the critical role that our infrastructure will play in supporting future economic growth in the energy transition. Please turn to the last slide.

Over the last four years, we've continued to update our portfolio with a view toward prioritizing markets with strong fundamentals and constructive regulation and simplifying our business model to improve execution and building scale, financial strength and a high-performing culture to deliver improved financial results. With the benefit of those strategic efforts, it allowed us to end 2021 in a strong position and looking forward we have three integrated platforms with improved visibility to future growth. With that, this concludes our prepared remarks. We'll now stop and take your questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] And we'll take our first question from Shar Pourreza with Guggenheim Partners. Please go ahead.

Shar Pourreza -- Guggenheim Partners -- Analyst

Hey, guys. 

Jeff Martin -- Chairman and Chief Executive Officer

Good morning, Shar. Good morning.

Shar Pourreza -- Guggenheim Partners -- Analyst

So really comprehensive update, Jeff and Trevor. But I just -- starting off as we look at your 6% to 8% growth profile, we get a pretty good sense of the utility growth. But as we think about maybe drilling down a bit further and bifurcating the growth, can you just elaborate a little bit more on the drivers of SIP. Any color on the cadence of growth there as ECA Phase 1 moves to completion in '24.

Do you see a more level earnings contribution from renewables and energy networks?

Jeff Martin -- Chairman and Chief Executive Officer

Well, thank you for that question. And certainly, I think you're making a very interesting point. You can tell that 94% of our five-year capital program is dedicated to our utilities. And this is not the first year that we've made that type of prioritization.

You've seen us grow our U.S. rate base from the end of 2017, which was about $14 billion to roughly $41 billion today. So that remains an ongoing priority. The capital that is in the plan today for Sempra Infrastructure is fairly conservatively projected.

As you know, Shar, our convention really is to focus on projects where we have already taken FID and they're in construction. And I might refer you to Slide 34, where it outlines a basket of incremental opportunities that we certainly think could be quite positive for the company. There's about $5.2 billion to $5.7 billion of incremental opportunities. I think part of that informs our view that our projections are fairly conservative.

Shar Pourreza -- Guggenheim Partners -- Analyst

And then just a follow-up on that one is tallying up today's disclosures, when you look at the utility growth, the contribution from SIP buybacks, what's really embedded in that 6% lower end?

Jeff Martin -- Chairman and Chief Executive Officer

Well, I think you're making the point that is it possible that our projections are conservative. And I think that if you look at our track record over the last 10 to 20 years, we produced earnings-per-share growth of about 7% or 8%. And we always have assumptions you have to account for future rate cases. You've got to account for execution of your capital plan in a positive economic environment.

But I think that we have a clear visibility based upon a similar attrition mechanism for the forward rate cases the visibility we have in Texas and a fairly conservative approach that we've taken at Sempra Infrastructure that we have a fair amount of confidence in that 6% to 8% range. And to your point, I think we execute quite effectively that could prove conservative.

Shar Pourreza -- Guggenheim Partners -- Analyst

Got it. Perfect. And then just really quick lastly for me, Jeff. This is super helpful.

It's just -- as we're thinking about the incremental opportunities at SIP, I mean, you're calling up to $9 billion, right? I just want to confirm, as you guys are looking at incremental LNG and other opportunities, you don't see any need to raise equity kind of over the trajectory just given sort of the opportunities to flex that balance sheet or maybe pursue more sales on the private side. Is that fair?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah, it's completely fair. And I think Trevor made this point in his remarks, Shar, which was we finished the year with an 18% FFO to debt. Our debt to total capitalization was around 47%. And not only do we not expect to issue parent equity to support a record capital program, we've got a line of sight to do another $1 billion of share repurchases here through 2023.

Shar Pourreza -- Guggenheim Partners -- Analyst

Terrific. Thank you very much, guys. Congrats on this messaging, it's a big change. Thank you.

Jeff Martin -- Chairman and Chief Executive Officer

Thanks a lot. Thanks a lot, Shar.

Operator

We'll take our next question from Jeremy Tonet with J.P. Morgan. Please go ahead.

Rich Sunderland -- J.P. Morgan -- Analyst

Hi, good morning. It's actually Rich Sunderland on for Jeremy. Thanks for taking my questions. 

Jeff Martin -- Chairman and Chief Executive Officer

Hi, Rich.

Rich Sunderland -- J.P. Morgan -- Analyst

Maybe circling back to return of capital. I just want to parse the slide and dig into a little bit more that $11 billion versus the $1 billion buyback to '23. It seems like if you take the $1 billion plus the math around the dividend, there's still incremental room within that $11 billion figure. Is that the case? And is that tapped for either return or reinvestment? Just how to think about the waterfall of opportunities within that.

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. There's obviously a variety of puts and takes in there, but I think you're on to something which is it does include dividends and it includes share repurchases. And one of the things you might be missing is it also includes distribution to our equity partners at Sempra Infrastructure.

Rich Sunderland -- J.P. Morgan -- Analyst

Got it. That's helpful. Just real quick on that front. The timing of the repurchases through 2023, I think you referenced opportunistically at one point.

Is that the approach you're taking? Or are you looking for something programmatic at some point as well?

Jeff Martin -- Chairman and Chief Executive Officer

I would say that historically, when we think about returning capital to our investors, we certainly like to privilege the dividend, which today is about 3.2%, 3.3% yield. And we supplement that opportunistically from time to time by buying back shares. In this case, it will be programmatic. We have an opportunity, we're making a commitment to do a $1 billion share repurchase before the end of 2023.

Rich Sunderland -- J.P. Morgan -- Analyst

Understood. Thank you. And then just circling up with LNG, Cameron expansion, are you still targeting FID this year? And could you maybe just speak to the contracting environment more broadly across the portfolio?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. Let me do this. I know this will be a topic of interest to a lot of our callers today. I'll provide a little bit of some macro background, and I'll pass it to Justin to provide a more clear view of the development portfolio and some of the contract discussions.

Let me just start by saying that we're really in uncharted territories, I think, in the global energy markets. Just yesterday, we saw Brent crude pass $105 a barrel, hasn't passed $100 since 2014. Natural gas futures in Europe were over $40, roughly eight or more times what you're seeing in the United States for a similar amount of natural gas. And even when you look at storage levels, Rich, in Europe, the five-year average today, they're about 25% below the five-year average heading into the spring.

So it is a really challenging environment in Europe. This is calling on a lot of different nations to step forward and make sure that we can provide more energy security. But if there's one takeaway, and we're seeing this in all of our conversations, that conversation around security of supply and security market is becoming more important. People today in all these developing and OECD nations, they want to make sure that they can enter into contracts where there's a rule of law.

And I think over the next midterm and long term, you're going to see the United States really flex its muscle in the LNG space, and we're seeing this in a lot of our conversations. So Justin, perhaps we can talk about the development pipeline and some of your contract negotiations.

Justin Bird -- Chief Executive Officer of Sempra Infrastructure

Great. Thank you, Rich, and thank you, Jeff. So I think, as Jeff mentioned, given the robustness of the LNG market and what we view as our privilege platform in the Pacific Gulf -- Pacific and Gulf Coast locations, I think you're seeing two things. One, we're seeing a dramatic increase in the market interest for our facilities.

And two, I think you're seeing heightened confidence in our ability to execute on our development projects. First, speaking of Cameron, we're making great progress on the expansion project at Cameron. Given the timing of the filing of the amendment to the FERC permit, we're now targeting FID in the first portion of 2023. We're also making great progress on Vista.

We are actively marketing about 10 million tonnes per annum of offtake and we are seeing extremely high levels of interest. So make no mistake, we're working with our partners and customers to get them supply as soon as possible. I wish we could give them more now. But as many of you know, the projects take time to develop, permit and build.

Also, we've made great progress in the last 24 months on Cameron. We reached full COD in 2020, hit record production last quarter, and we're working with our customers and partners to accelerate debottlenecking of the Phase 1. We took FID on ECA in November of 2020. As Trevor mentioned, the projects on time, on budget and being done safely.

We expect first LNG there toward the end of 2024, and you should expect us to optimize volumes out of ECA once we reach full production. So to really sum it up, Rich, we're focused on delivering LNG to our customers under long-term 20-year contracts. LNG demand is growing about 5% to 10% per year, and you should expect us to grow with the market or better. And lastly, we think we can deliver superior risk-adjusted returns to our shareholders by making disciplined investments in our LNG infrastructure.

Rich Sunderland -- J.P. Morgan -- Analyst

Great. Thank you for the commentary there.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you.

Operator

We'll take our next question from Durgesh Chopra with Evercore ISI. Please go ahead.

Durgesh Chopra -- Evercore ISI -- Analyst

Hey, good morning team. Thank you for taking my question. Jeff, big picture, where do you see sort of the regulated versus nonregulated earnings mix sort of evolving here from '22 to 2026 in light of like the majority of the increase in capex is dedicated toward utilities. How are you thinking about that? Any updated thoughts there? Or how should we think about that business like the [Inaudible] over time?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. One of the things I was excited about for today's call was one of the slides that showed that at the end of 2017, our U.S. utility rate base was $14 billion. Today, it's $41 billion.

And by the end of the five-year period that you're addressing, it's going to be $62 billion. And we have a fair amount of confidence to be able to grow that size of rate base. That's a 4.4 times growth over that nine-year period of time. And I think what that really reflects is the benefit of over the last four years, our capital recycling program and our focus on these T&D marketplaces where if you're in the right markets with good regulation, you can continue to produce higher recurring cash flows and grow your business faster than your peers.

We certainly think that one of the arguments that comes through in our materials is the important role that Sempra Infrastructure plays in supporting that growth. So if you go back to the December time frame of 2020, the market was valuing the IEnova business and the LNG business at about $9 billion. We have a slide here today that shows our ability to basically extract roughly $7 billion out of that business to support the type of growth you're seeing in our utility. So I think my conclusion would be we have three very strong platforms that are very capable of growing.

Each of them have scale and a leadership position in the markets they serve. And I think we've got this thing teed up to deliver really good results in the years ahead.

Durgesh Chopra -- Evercore ISI -- Analyst

Got it. That's helpful, Jeff. Thank you. Just one quick clarification.

On the MOUs at Cameron LNG and the Vista Pacifico, that would be sort of the additional capex there. Are you -- do you -- what's kind of the balance sheet room? Do you need equity for that additional capex? Or do you think you can absorb that within in the context of upside to the capex plan?

Jeff Martin -- Chairman and Chief Executive Officer

Right. Justin talked about this opportunity that we're working on for 10 million tonnes per annum of new capacity. They have a self-funded business model today where they can resource third-party equity at the project level. They can also call on their equity partners.

And one of the things that's really exciting about the Sempra Infrastructure transaction was, we set that business up with an investment-grade balance sheet and a mandate that they self-fund their business, and when they can return capital to the parent to support our share repurchases and our dividend program and our growth in our utilities, they can do that. So I think one of the things that Trevor oftentimes says is that business produces a flywheel of cash and that has been very instrumental to Sempra's success in growing its utility platform, and we'll look to them to help finance their growth on the LNG side.

Durgesh Chopra -- Evercore ISI -- Analyst

Got it. Thank you so much, guys. Appreciate the update today.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you for joining us.

Operator

Our next question comes from Steve Fleishman with Wolfe Research. Please go ahead.

Jeff Martin -- Chairman and Chief Executive Officer

Good morning, Steve.

Steve Fleishman -- Wolfe Research -- Analyst

Yeah. Hey, hi. I guess, good afternoon here. The -- just a follow-up on LNG and specifically, Cameron.

If you do get to FID in the first half of '23, when would Cameron likely be online [Audio gap] expansion?

Justin Bird -- Chief Executive Officer of Sempra Infrastructure

So in terms of the additional train, it would roughly be four years after that. I think the other thing to remember about the Cameron project as a whole, as I mentioned, we're looking to accelerate the debottlenecking which we think can produce an incremental 1 million tonnes per annum, and we would expect that to come online prior to the full second train -- or sorry, the full additional train at Phase 2.

Jeff Martin -- Chairman and Chief Executive Officer

So the way to think about it, Steve, would be fully online by 2027, which is about a 48-month period of time. But Justin is making a great point. We're looking to have access to additional volumes from debottlenecking probably within our five-year plan period.

Steve Fleishman -- Wolfe Research -- Analyst

OK. And that would be incremental to the plan, the debottlenecking upside?

Jeff Martin -- Chairman and Chief Executive Officer

That's correct. That's something we're following very closely. It's important.

Steve Fleishman -- Wolfe Research -- Analyst

OK. That's great. And then Jeff, obviously, you've got a new long-term growth rate out. The stocks been doing better this year, and that's great.

And so -- but I'd be curious if you were to -- what would make you consider changing the structure of Sempra i.e. breaking off SIP or selling more [Audio gap] what are the things that could change the way it is or you're likely given the way this is kind of all coming together just to kind of continue the path you laid out today?

Jeff Martin -- Chairman and Chief Executive Officer

Well, I'll give you a couple of comments, Steve, and I mentioned some of this earlier on the call, but I think today's call really is a culmination of what we've been talking about in terms of our strategy and the value of being focused on a T&D platform that really privileges U.S. utility growth, right? So we're very pleased with the progress we've made over the last four years and be able to grow our earnings per share over that four-year period at about 11% rate. And fund these record capital plans while returning capital to shareholders. So we've got a pretty virtuous model going for us right now.

One of the things I would ask you to think about is we have a very rigorous strategy discussion with our board. We met earlier this week. Strategy is discussed at every single regular meeting of the Sempra board through the lens of how we can push more and more value back to our shareholders. And I think you can tell from the last three or four years, we're not going to be bashful.

If we see an opportunity to unlock the balance sheet and buy back more shares or adjust our dividend policy, we're going to do that. But I think right now, the key takeaway from this call is we have a record capital campaign. We've gone from 2017 when I was the CFO of having a $16 billion five-year plan, Steve. It's $20 billion higher in over a four-year period of time.

So our No. 1 opportunity is to make sure that we're funding as a first priority, what we think is a very attractive capital program and continue to look for opportunities to unlock value. And I think we've demonstrated a willingness to do that.

Steve Fleishman -- Wolfe Research -- Analyst

Great. Just last question on the balance sheet. I appreciate the FFO-to-debt metric and the like. Just have the -- have you gotten any comment from the rating agencies on the updated plan and how they're thinking about it?

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Steve. I'll pass that to Trevor for commentary.

Trevor Mihalik -- Executive Vice President and Chief Financial Officer

Thanks, Jeff. Yeah, Steve, we have gone and highlighted the plan with the rating agencies and gotten some of their feedback. We will do it in a bigger way in subsequent weeks here. But they understand where we are on things.

And again, we feel very good about the 18% FFO to debt that we ended the year at and continue to strengthen the balance sheet, that is a priority of mine, and continue to fund the capex plan.

Jeff Martin -- Chairman and Chief Executive Officer

I would also mention, Steve, we've talked about strengthening the balance sheet probably every year for the last four years. And I think you're seeing that benefit. So you think about the high watermark in the second quarter of 2018 when we finished the completion of the Oncor acquisition, our debt to capitalization was about 57%. So we've really thickened our equity layer.

And today, at the end of the year of 2021, it was 47% right. So you're seeing us fortress the balance sheet with a view toward supporting more growth for our shareholders and the return of capital in the form of both dividends and share repurchases.

Steve Fleishman -- Wolfe Research -- Analyst

Great. Great. Thank you for the thorough update. Thank you.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Steve.

Operator

We'll take our next question from Michael Lapides with Goldman Sachs. Please go ahead.

Jeff Martin -- Chairman and Chief Executive Officer

Hi, Michael.

Michael Lapides -- Goldman Sachs -- Analyst

Hey, Jeff, congrats on a good end of your call and a great start to 2022. Lots of exciting things going on. Curious -- a couple of questions on the core utilities. One of which is that if I look at your rate base and your net income guidance, your net income growth rate at the California utilities are kind of mid-single-digit-ish range, I think I  just invented a word, digit-ish, mid-single digit for '22 and '23, but the rate base growth is double digit both of those years from '22 and '23.

And then at Oncor, it's kind of the opposite. The net income growth is low double digits in '22, but the rate base growth is kind of in that 8% to 9% range. Can you just remind us what's driving the big spread between rate base growth and net income growth, albeit it's a little different in California than it is in Texas?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. Let me just start with a little bit of context. I think one of the things we're excited about, and you've seen us dedicated our focus to improve the quality and scale of our U.S. utilities.

That's reflected in our rate base numbers, Michael. But California rate base projections are clipping along at about a 9% CAGR. And then Allen's organization, Oncor, is growing at roughly 8%. And on average, you put those two together and they're growing about 8.5%.

And I'll take your point, which you would expect earnings to roughly over long periods of time to reflect that type of rate base CAGR. In California, you recall that we're going into a rate case cycle, that first year where rates are in effect. You usually see a large step-up it's that portion of the new rate base that's coming into that cycle. And at Texas, you have a little bit of a lag in terms of how their mechanisms work.

But I think the larger point you're making is you don't have visibility to year three or four or five from a growth standpoint, but that differentiation you're seeing should basically come together closer to the overall rate base growth over the five-year period.

Michael Lapides -- Goldman Sachs -- Analyst

Got it. OK. And then this is a busy regulatory year. I mean you've got to file rate cases in California.

And I think you have to file in Texas. Is there any scenario where probably more so on the Texas side, you could get an incremental one-year delay? There are a bunch of other utilities like Entergy, Texas and others filing in Texas this year. Do you have -- do you feel you have the need to file in Texas? Or is this a filing that you're kind of required to make?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. Let me make a couple of contextual comments, and I'll pass it to my partner, Allen Nye, here in just a second. But you remember, here in California, we're going to file our cases later this year, both for SDG&E and SoCalGas. Those cases will flow into 2023 with a view that those rates will be effective on January 1, 2024.

In Texas, Allen is prepared and his team for his rate case filing. But Allen, I'll let you speak to how you're preparing for that case? How you think about the timing of that case relative to some of Michael's comments.

Allen Nye -- Chief Executive Officer

Sure, Jeff. Thanks, Michael. Yes. Just initially, let me say, when we extended our rate case deadline filing last year, we got a deadline set of on or before June 1 of this year.

So right now, we're required to make the filing on or before June 1. I'll tell you, probably looking at, call it, mid-May for a filing. We're putting together what we think is a very strong case. We have -- obviously very aware of what other utilities have done down there recently and what the outcomes have been.

I feel strongly, and I've said it before, rate cases are very company-specific, very fact specific. They relate in a large way to the way you run your company over time, your relationships with your constituents in the PUC, and we feel very good about all those connections and the history of how we perform with these rate cases. So I'm not going to front run my lawyers and my experts, my witnesses and I can't really get into what we think we're going to file. Obviously, ROE and cap structure are always big in these cases, and that will be a focus of our cases as well.

And then the only other thing I would add, and I think somebody said in the opening comments, I think everyone is aware, we do have the lowest rates of any IOU in Texas. And if you're going in for a rate case, that's a good place to be. So all in all, right now, we're looking at mid-May. We don't think there's going to be another extension.

There's obviously a lot going on at the commission right now, but we feel good about where we are, and that's our current plans.

Michael Lapides -- Goldman Sachs -- Analyst

Got it. Thank you, Allen. Thank you, Jeff.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Michael.

Operator

We'll take our next question from Ryan Levine with Citi. Please go ahead.

Ryan Levine -- Citi -- Analyst

Hey, everybody. What's included in the $1 billion to $1.1 billion of energy network potential project? And how is the contracting and development environment today in light of the commodity and political backdrop in comparison with previous quarters?

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Ryan, for that question. You'll recall that we announced a recent MOU with CFE. And one of the things that the country is trying to address is as they went through their reforms from 2013. They have essentially overbuilt their pipeline network at the time with a view toward building a lot more natural gas-fired generation to replace a lot of their oil-fired plants or their older plants.

Some of that pipeline capacity is unused. So one of the things that's important in that MOU is that our partnership with CFE is designed to basically utilize some of their pipeline system to support the Vista Pacifico project which reduces the cost that they're bearing for that capacity. And secondly, there's a workaround plan where they've agreed to help us put the Sonora pipeline back into service and that will involve additional capital. And we've got opportunities here, particularly in Baja.

One of the things that Tania always reminds us of is Baja California and Baja Sur is literally disconnected from a gas and electrical standpoint from Mainland Mexico. So this situation where San Diego Gas & Electric sits and this north Baja position that we picked up in terms of our power position in renewables, as well as our pipeline position, we think there will be continued opportunities there and in the future for pipelines to be built to support growth in Baja.

Michael Lapides -- Goldman Sachs -- Analyst

Got it. Thank you for that. And then in terms of your guidance, what are the components of the parent cost reduction between 2022 and 2023 that you're guiding toward?

Jeff Martin -- Chairman and Chief Executive Officer

So I will tell you that we're managing a number of things. The biggest obvious issue in our parent cost is how we manage our overall interest cost. And the second thing, and we talked about that in the prepared remarks about some of our preferred equity going away year over year, but we also have been managing down our overall SG&A for the parent. I don't know if, Trevor, if you want to add any additional remarks on our parent costs year over year.

Trevor Mihalik -- Executive Vice President and Chief Financial Officer

Yeah. No, Jeff, I think you pretty much touched on it. The higher parent losses were primarily due to less interest savings driven by a higher capital plan.

Ryan Levine -- Citi -- Analyst

OK. And then last question for me. In terms of battery outlook, recognizing the recent regulatory filings, do you see any upside to the spending in California? And are you looking at any electric batteries for Mexico?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. We definitely have a Volta project very much adjacent to TdM in Mexico. You may remember that when TdM was built back in the 2000 period, they had plans for a second combined cycle plant to be built adjacent to TdM. That project has now been dedicated to batteries and Justin's team is evaluating a 500-megawatt battery project out of that location.

I'll turn it over to Kevin. We actually are quite bullish on batteries here at San Diego Gas & Electric. And maybe, Kevin, you can kind of contextualize that opportunity for the utility.

Kevin Sagara -- Executive Vice President and Group President

Yeah. Thank you. Hey, Ryan. So we were happy to see the PUC approved earlier this month, our advice letter around three new energy storage projects that totaled about 160 megawatts.

That's about $300 million -- $380 million of capital investment. There were three different projects there, all lithium ion. I think we're going to see more and more of this. We're seeing with the CAISO study that came out.

There's a big need for a lot more resources like this. And I think we're going to see a tremendous amount of energy storage still to get built, and we'll get our fair share of that like we did here.

Ryan Levine -- Citi -- Analyst

Thank you.

Operator

And we'll take our next question from Julien Dumoulin-Smith with Bank of America. Please go ahead.

Jeff Martin -- Chairman and Chief Executive Officer

Hi, Julien.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Hey, good morning team. Congratulations on the continued results.

Jeff Martin -- Chairman and Chief Executive Officer

Thanks.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Absolutely. Just with respect to Ryan's last question, maybe I'll start with the strategic one here. As you think about the Sempra Infrastructure side, you all have done a lot in the gas base. You're also obviously located in California principally.

Renewable natural gas as mentioned in your comments here, how do you think about leaning into opportunities that might avail themselves specifically as some of those opportunities become perhaps more ripe, if you will, across the Western U.S?

Jeff Martin -- Chairman and Chief Executive Officer

Well, I'll give you a couple of thoughts and maybe, Kevin, you can follow me. But I think one of the things, and I actually had the opportunity to follow Edison's call yesterday, too, that you're seeing is there is no longer a conversation about whether there's going to be a clean energy transition, Julien. The conversation now is about how fast it can happen and what the different mix of technologies and fuels will be. And I think in California, one of the areas that we're fairly proudful about our leadership position is we see a marketplace here where there is a big and growing role for electrification in the form of green kilowatts but there's also a big role for green molecules.

So I think this decision you saw yesterday very much validates the adjacencies and the existing value of SoCalGas' system. They just completed 4% of their core deliveries last year from renewable natural gas, and this new mandate will up that number to about 12.5% by 2030. And that ruling came after SoCalGas had already committed to get to 20% by 2030. So I think the role of renewable natural gas, our recent announcement around the Angeles Link for hydrogen.

These are going to be big opportunities. And I think our footprint, to your point, it's going to give us a lot of opportunities both on the regulated and unregulated side. And Kevin, you've long been a leader in our innovation at the company. Maybe you could provide some color around how you're thinking about renewable natural gas and hydrogen.

Kevin Sagara -- Executive Vice President and Group President

Yeah, I think we've spoken about this before, too, Julien, which is just around this idea that clean molecules have a big role to play in this energy transition. And I think, obviously, you saw what we announced with Angeles Link. This we got some favorable feedback from various stakeholders around the state around that project. And you see this decision by the CPUC authorizing this renewable nasgas -- natural gas standard for the utilities, which is kind of an acknowledgment that, hey, the gas company's infrastructure are going to have a big role to play in this clean energy transition within the state, helping the state reach its aggressive decarbonization goals.

So we view this as all kind of like a positive step, and it's demonstrating that there is a role in the state for clean fuels along with a lot of electrification.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Got it. Excellent. I'm curious to see when it becomes more material. Maybe if I can, just on numbers here.

As you think about this new CAGR that you've all laid out, can you talk a little bit about the fungibility between buybacks and use of deployment just in share repurchase versus, say, going to an LNG FID or the debottlenecking. Obviously, there's several different scenarios that could play out here. Can you talk about how maybe capital going into an LNG FID could potentially effectively delay some of that earnings recognition into '27, could ultimately be accretive to your CAGR, as best I understand it? So maybe what's assumed in the form of BioMag? And then ultimately, what is that incremental opportunity if you can kind of define it relative to the CAGR?

Jeff Martin -- Chairman and Chief Executive Officer

Well, let me take a shot at it. And if I don't answer it accurately, please come back and we'll try to make sure I get a more fulsome answer. But I would start with the fact that you've seen our capital program grow from about $16 billion over five years in 2017 to $36 billion. So the cornerstone of our program going forward is the fact that all three of our platforms have very strong growth.

And against that backdrop, we understand that we're a company where we need to privilege the dividend, right? So our investors expect us to return capital in a very competitive way with our dividend. And what you've seen us do in the summer of 2020, Julien, and now most recently in the last 90 days, is put $1 billion of share repurchases to work. And again, as someone mentioned earlier, flexing the balance sheet a little bit between now and the end of 2023 to put another $1 billion at work. So when we think about that return of capital, it's really a two-pronged opportunity of dividend juxtaposed besides the share repurchases.

Now to your point, as you go forward in the plan, there are a variety of things that could cause our plan to get bigger. When you think about LNG, I made this comment earlier in my prepared remarks, but we certainly think what's unique about Sempra Infrastructure is we've given them a mandate to be self-funded, right? So they're in a position where with an investment-grade balance sheet, they can source the capital market. They can source debt. They can raise money at the project level.

They've demonstrated a willingness to do that. So think about Cameron as an example. We originally owned about 50% of that project and through our sell-down at Sempra Infrastructure to a 70% level today, our look through equity participation at Cameron today is roughly 35%. So we have a lot of flexibility under Faisel's leadership and Justin's leadership to make sure that we're very, very disciplined before we spend dollars on the LNG business, but their job is to risk adjust those cash flows in a way to make sure these are accretive opportunities for the Sempra shareholder.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Got it. Excellent. So just on buyback commitment, that's assumed in the plan, there's no specific number per se.

Jeff Martin -- Chairman and Chief Executive Officer

So I think what we're saying is that we have identified programmatically that we're going to spend another $1 billion around share repurchases between now and 2023. And beyond that, we'll be opportunistic based upon what's in front of us and what we think creates the best kind of adjusted total shareholder return for our investors.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Yeah, absolutely. A lot of moving pieces here. Thank you again and congrats once more. [Inaudible] soon.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Julien. I appreciate it.

Operator

We'll take our next question from Craig Shere with Tuohy Brothers. Please go ahead.

Craig Shere -- Tuohy Brothers -- Analyst

Hi, congratulations on another good quarter and the ongoing growth.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Craig.

Craig Shere -- Tuohy Brothers -- Analyst

Jeff, you mentioned the stressed and uncharted global energy market and the related opportunities on Slide 34 for more Sempra Infrastructure projects. Now up to $9 billion of incremental accretive projects is certainly nothing small. But does that seems to ignore Port Arthur and ECA Phase 2. I realize for various reasons, some of these additional projects may be more toward the end of the decade.

But in a perfect storm of global energy and security, there may be quite an appetite for multiple large-scale project that while maybe not [Inaudible] exactly at the same time, maybe they could overlap in construction over one or two years and be quite a bit to digest in terms of their overall size. So the first part of my question is in a perfect storm where the world needs help, would you be willing to take on that much. And if we're looking at perhaps $20 billion-ish of SIP growth, capex through decades end. And I know this was asked in a different manner, but what I'm trying to get at is if it got to be that big, does that necessarily augur for additional structural change?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. It's a really interesting set of question, and I don't want to compliment you because you have long been a follower of the LNG markets and we've always appreciated our dialogue with you and your firm about this, but you used twice this reference to a perfect storm. And we don't take too much confidence or happiness in the fact that we've been predicting this for over five or 10 years. This need for what needs to happen in the middle of the decade, and we certainly -- no one forecasted what's currently taking place.

And I think perfect storm is the right characterization of it. Look, there's no question that there is a commitment globally to a clean energy transition. But there is a growing recognition that that transition, Craig, has to happen in an orderly way. And as you think about both developing markets and OECD nations, there is a strong and growing role, a very important role for natural gas and LNG is really going to be the feedstock that allows both Europe and Asia to make that transition with order in a way which is affordable.

It is the natural partner to renewables. So I think we're in a very fortuitous position. I think you're really describing for us a high-class problem. So we do have a unique set of assets, both on the West Coast and the Gulf that can be responsive.

Now we can't -- to Justin's point, be responsive in the short term. But over the long term, we have a very bullish view of what can happen in our portfolio. And maybe Faisel, who is the CFO of that business, maybe you can think about to Craig's question, Faisel, how you think about that opportunity and how it could be flexed and how big it could be for our company?

Faisel Khan -- Chief Financial Officer of Sempra Infrastructure

Yeah, Craig, I think it would be awesome if we could do all these projects all at the same time, but obviously, we have to be disciplined about how we do it. So if we think about over the long run, how we're going to source that capital. So at Sempra Infrastructure, obviously, when ECA Phase 1 comes online, we're going to have a step up in cash flows there. So we have very strong internally generated cash flows to fund growth projects in the future.

The second part of it, too, is we have our partners now in KKR and ADIA They can also be a source of capital for big projects like that. And thirdly, we can pull capital at the project level. So similar that we've done at Cameron, we can do that in other projects, too. So I'd say, as we think about the future of funding these projects, we feel very good about how we can source the capital into that growth.

Jeff Martin -- Chairman and Chief Executive Officer

I would just maybe, Craig, as a final comment, say, in the perfect storm you're describing, I think there'll be a lot of alignment around government agencies and support across our industry to pull projects forward as necessary if we can to be helpful to improve the energy security of our allies.

Craig Shere -- Tuohy Brothers -- Analyst

One would hope that our societies would be so integrated.

Jeff Martin -- Chairman and Chief Executive Officer

We're on agreement.

Craig Shere -- Tuohy Brothers -- Analyst

Thank you.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you very much.

Operator

And we'll take our next question from Sunil Sibal with Seaport Global Securities. Please go ahead.

Sunil Sibal -- Seaport Global Securities -- Analyst

Yeah. Hi, good morning, folks. And thanks for all the [Inaudible] so actually, I had a couple of follow-ups on the LNG discussion. So it seems like in the European utilities over the last few years have been averse to kind of taking on long-term commitments with the 20-year contracts or so considering that the changes we are seeing currently.

Has that kind of discussions opened up again? I was just curious on that.

Jeff Martin -- Chairman and Chief Executive Officer

Yeah, sure. A couple of things have taken place. One is European utilities are doing several things. They are taking on longer-term contracts, number one.

You're seeing other companies make more investments in pipeline, what they call future-ready pipelines for hydrogen, which is probably further along than we are in the United States. But Justin talked about really the improvement in how he's envisioning the long-term contracting environment? And maybe, Justin, you could just recap that in terms of the nature of the conversation you're having with counterparties currently.

Justin Bird -- Chief Executive Officer of Sempra Infrastructure

Yeah. Thank you, Jeff. Yeah, Sunil, I think you had been seeing some reluctance on the European utilities to really go out on long-dated contracts. I think a lot of that was driven by uncertainty around the taxonomy, as well as carbon tax related questions.

So I think some of that overhang is still there. But I will say we're seeing a significant uptick in interest particularly given some of the things that we've described, as Jeff described in the global markets. The forwards clearly currently affected by what's happening in the Ukraine. But we are still seeing significant interest in the 10 million tonnes that I'm talking about marketing in Europe and Asia, all of it on a 20-year basis.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you, Justin.

Sunil Sibal -- Seaport Global Securities -- Analyst

Yeah. Thanks for that. And then one clarification on the one MTPA that you mentioned for the Cameron debottlenecking. So is that capacity all spoken for between your partners in that project?

Justin Bird -- Chief Executive Officer of Sempra Infrastructure

So yeah, that capacity would go to the current offtakers. And so it basically represent in a sense, captive customers for the marginal earnings that would come out of those additional volumes.

Sunil Sibal -- Seaport Global Securities -- Analyst

Got it. And then last question on that. I think you mentioned improvement in return profile on these projects. Could you give us a sense of directionally what kind of improvements are you seeing? And I presume that contract construct with regard to the nature of the contract is pretty much dissimilar to what we did for Cameron?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. I'll pass this to Faisel, but I think one of the things we're referring to here is the nature of scarcity that you see in the marketplace and the growing recognition that you're seeing about the growing role of natural gas is causing two things to happen. Number one, increase openness by customers to enter into long-dated contracts. And number two, greater competition for the capacity that we're looking to market both in the Gulf and the West Coast.

And Faisel, you want to add anything to that in terms of what we're seeing?

Faisel Khan -- Chief Financial Officer of Sempra Infrastructure

Yeah. I mean, Trevor has also laid this out in his capital allocation sort of framework, but it's targeting those sort of mid-to-high teens equity levered IRRs is kind of what we look at.

Sunil Sibal -- Seaport Global Securities -- Analyst

Got it. Thanks for that.

Jeff Martin -- Chairman and Chief Executive Officer

Thanks, Sunil.

Operator

And we'll take our next question from Nicholas Campanella with Credit Suisse. Please go ahead.

Jeff Martin -- Chairman and Chief Executive Officer

Hi, Nicholas.

Nicholas Campanella -- Credit Suisse -- Analyst

Hey, team. Hey, long time no talk. I guess just on the California utilities and in terms of what's assumed in the broader 6% to 8% CAGR here. I know we talked about the GRC cycle coming up.

You also have cost of capital coming. Are you just kind of assuming status quo through '25, '26? Or how should we think about that?

Jeff Martin -- Chairman and Chief Executive Officer

Yeah. A couple of things for you in terms of the five-year plan. Two of those years are under the old rate case. And then three of the forward five years will be covered by the rate case that goes into effect on January 1, 2024.

In terms of cost of capital, we're obviously following the proceeding very closely. I think in our current range for 2022, it's contemplated whether the trigger mechanism applies or doesn't apply, it's contemplated in the range. We view it as having between a $0.05 and $0.10 impact either way. And then in terms of the GRC assumption, as we think about forecasting these future periods, you'll recall, Nicholas, our convention has been to use substantially similar attrition mechanisms from the past.

So if you look at the attrition mechanisms that PG&E and Edison recently got, and our average attrition mechanism across both utilities over the last five years, that's a good proxy for our expectation and the plan going forward.

Nicholas Campanella -- Credit Suisse -- Analyst

Great. Thanks a lot. And just one more cleanup question here on LNG -- or sorry, the SIP EBITDA, you gave '22. We have earnings guidance for '22 and '23.

Is there any reason why '23 wouldn't track similar to how you framed the change in earnings from an EBITDA perspective? Just trying to think about EBITDA at SIP for '23? Thanks.

Faisel Khan -- Chief Financial Officer of Sempra Infrastructure

Yeah. So the earnings for -- the earnings you see in our guidance range for '22 and '23 assumes the proportional amount of earnings. So the NCI is in there. So for example, in '22, you're seeing roughly 25% interest to our noncontrolling shareholders.

And then in '23, you're seeing 30% noncontrolling interest. That's why you see a little bit of a change there. But on a gross basis, the EBITDA is basically fairly straightforward.

Trevor Mihalik -- Executive Vice President and Chief Financial Officer

But let me just say this. The reason we just put '22 in there, there was nothing with regards to why we didn't put 23, it's largely the same.

Nicholas Campanella -- Credit Suisse -- Analyst

Yup. Just wanted to confirm that. Thanks for the time. Really appreciate it.

Jeff Martin -- Chairman and Chief Executive Officer

Thank you.

Operator

And that concludes today's question-and-answer session. At this time, I will turn the conference back to Jeff Martin for any additional or closing remarks.

Jeff Martin -- Chairman and Chief Executive Officer

Sure. In closing, I wanted to make sure we took the time to summarize some of the highlights from today's call. We've nearly tripled our U.S. rate base in four years to $41 billion.

That includes current authorized blended ROEs today that are slightly higher than 10%. We posted record adjusted EPS results printing a number today of about $8.43. This was the 12th consecutive year that we've been able to raise our dividend. And today, we announced our long-term EPS growth rate of 6% to 8%.

And by the way, over the last 10 years, we delivered a 7% to 8% annual CAGR in terms of EPS growth. I would also note that we're really benefiting from a simplified business model with three T&D platforms with scale in the biggest economic markets in North America, and all of these results are being backed by shareholder-friendly repurchases, $1 billion in the summer of 2020 and another approximate $1 billion through 2023. We appreciate everyone joining the call. Trevor and Justin and our IR team will be attending the Credit Suisse conference next week in Vail, and also the Morgan Stanley Conference next week in New York.

And we hope we have the chance to see many of you there in person at both of those events. This concludes our call.

Operator

[Operator signoff]

Duration: 72 minutes

Call participants:

Nelly Molina -- Vice President, Investor Relations

Jeff Martin -- Chairman and Chief Executive Officer

Lisa Alexander -- Chief Sustainability Officer

Trevor Mihalik -- Executive Vice President and Chief Financial Officer

Shar Pourreza -- Guggenheim Partners -- Analyst

Rich Sunderland -- J.P. Morgan -- Analyst

Justin Bird -- Chief Executive Officer of Sempra Infrastructure

Durgesh Chopra -- Evercore ISI -- Analyst

Steve Fleishman -- Wolfe Research -- Analyst

Michael Lapides -- Goldman Sachs -- Analyst

Allen Nye -- Chief Executive Officer

Ryan Levine -- Citi -- Analyst

Kevin Sagara -- Executive Vice President and Group President

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Craig Shere -- Tuohy Brothers -- Analyst

Faisel Khan -- Chief Financial Officer of Sempra Infrastructure

Sunil Sibal -- Seaport Global Securities -- Analyst

Nicholas Campanella -- Credit Suisse -- Analyst

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