---
title: "Sempra's Texas grid plan grows 20%; California's $188 million rate denial pushes 2027 toward the low end"
description: "Oncor, the Texas grid utility majority-owned by Sempra, drove a third-quarter beat and a five-year capital plan set to rise about 20% from $47.5 billion. A proposed California decision denying a $188 million rate correction would pull 2027 toward the bottom of guidance, and at $82.90 the stock still trades below its 200-day average."
publisher: "The Inference"
section: "Power"
published: 2026-11-08T15:24:28.769Z
modified: 2026-11-08T15:24:28.769Z
canonical: https://theinference.org/article/sempra-s-texas-grid-plan-grows-20-california-s-188-million-rate-denial-pushes-2027-toward-the-low-end
language: en
keywords: "Sempra, Oncor, Utilities, Data Centers, ERCOT, Earnings"
---

# Sempra's Texas grid plan grows 20%; California's $188 million rate denial pushes 2027 toward the low end

> Oncor, the Texas grid utility majority-owned by Sempra, drove a third-quarter beat and a five-year capital plan set to rise about 20% from $47.5 billion. A proposed California decision denying a $188 million rate correction would pull 2027 toward the bottom of guidance, and at $82.90 the stock still trades below its 200-day average.

[Sempra](https://theinference.org/markets/companies/sempra), the San Diego-based utility holding company (NYSE: SRE), answered the question [our November 1 preview](https://theinference.org/article/sempra-reports-november-5-with-a-cameron-lng-unit-down-eca-lng-late-and-shares-at-24-9-times-earnings) asked: the Texas load queue behind the AI buildout is real, and it is already producing earnings [1][2]. [Third-quarter adjusted earnings of $1.40 a share beat the $1.20 consensus](https://finviz.com/news/417523/sempras-texas-driven-beat-lifts-2026-outlook-but-a-california-ruling-clouds-2027), and management guided 2026 to the high end of its $4.80–$5.30 range [1][2]. The same call, on November 5, put a price on California: a proposed decision at the California Public Utilities Commission denies a $188 million rate correction for 2027 [1][3].

Sempra affirmed its 2027 range of $5.10–$5.70 but said the denial, unless corrected on appeal, pushes the year toward the range's lower half [2][4]. The shares closed at $82.90 before the November 5 report, 7.2% below their 200-day average of $89.37, so the market had not yet paid for the Texas growth [1]. The report supplies the numbers to test whether that discount still fits.

## The AI buildout arrives as a queue, not yet as load

The demand is data centers. Oncor, the Dallas utility that delivers power to more than 4 million Texas homes and businesses and is majority-owned by Sempra, [ended September with roughly 293 gigawatts of data-center interconnection requests](https://www.prnewswire.com/news-releases/oncor-reports-third-quarter-2026-results-302930053.html) [5]. Its system set a record peak of 33.3 gigawatts on August 24 [5]. That was 6% above the prior record [5].

Governor Greg Abbott's August 3 directive ordered verification of every data center advancing through the state's interconnection process; the Electric Reliability Council of Texas, the state's grid operator, paused Batch Zero, its new process for classifying large loads, and will not let big projects energize until the audit finishes [6].

## Twenty-four gigawatts hangs on a December audit

About 24 gigawatts in Oncor's territory is conditionally classified as base load, a status Sempra said reflects customer commitment through financial security, site control and other ERCOT qualification requirements, and it holds only if an ERCOT audit expected in December confirms it [2][5]. ERCOT has already sent second information requests to roughly 80% of Batch Zero customers whose first answers failed validation [7].

*Chart: **Oncor's data-center queue is almost nine times its record peak** Column chart comparing Oncor's roughly 293 gigawatts of data-center interconnection requests with its 33.3 gigawatt ERCOT record peak and 24 gigawatts conditionally classified as base load.*

*Gigawatts as of late September 2026: data-center interconnection requests pending at Oncor, the ERCOT system record peak set August 24 (6% above the prior record), and Oncor load conditionally classified as base load pending ERCOT's audit. Source: Oncor's third-quarter 2026 results [5]. [5]*

## Verified load becomes wires, and wires become earnings

This is the link that turns AI demand into utility earnings. Load that survives the audit becomes transmission and distribution capital earning a regulated return, and Oncor is the builder being paid to close that gap. New base rates took effect June 1, and the year-over-year increase in Sempra's Texas equity earnings grew every quarter of 2026 [5][1]. Oncor will spend about $9 billion this year, its largest annual plan ever, and in February finalizes [a five-year plan it expects to land about 20% above the current $47.5 billion](https://finance.yahoo.com/energy/articles/sempra-expects-20-increase-oncor-161036651.html) [5][7].

*Chart: **Oncor's five-year capital plan is set to rise about 20%, to roughly $57 billion** Column chart showing Oncor's 2026 annual capital plan of about $9 billion, its current five-year plan of $47.5 billion, and the stepped-up five-year plan of roughly $57 billion expected in February.*

*Capital spending plans, in billions of dollars: Oncor's roughly $9 billion 2026 annual plan, its largest ever; the current five-year plan of $47.5 billion; and the stepped-up five-year plan Sempra expects to finalize in February, about 20% higher, which excludes the Eastern STEP 765-kilovolt projects, system resiliency and all Batch Zero load. Sources: Oncor's third-quarter 2026 results [5]; Q3 earnings call coverage [7]. [5][7]*

## The step-up leaves its biggest upside uncounted

That step-up excludes the Eastern STEP 765-kilovolt transmission projects, a system resiliency program and all Batch Zero load [7][1]. The Permian Basin Reliability Plan sits on a separate track: the state commission approved both segments of Import Path 1, worth about $3.9 billion, in August, though rehearing motions have been filed [2][1]. The private-equity firm KKR's purchase of a 45% stake in Sempra Infrastructure Partners, Sempra's infrastructure arm, is expected to close within two weeks, paying down debt ahead of the build [2].

*Chart: **Sempra Texas equity earnings accelerated every quarter of 2026** Column chart showing the year-over-year increase in Sempra Texas equity earnings rising from $25 million in Q1 2026 to $138 million in Q2 and $154 million in Q3.*

*Year-over-year increase in quarterly equity earnings from Sempra's Texas utilities, in millions of dollars, from the Q3 2026 earnings call and coverage. [1][7]*

## California's bottleneck is the regulator itself

Texas's bottleneck is verification, with a December deadline; California's is the commission. The proposed decision, issued October 29, denies correction of how the 2024 rate case accounted for capital invested after its test year [2].

Management frames it as a one-year error: rates reset in January 2028 under the next rate case, the decision is not final, and further regulatory avenues remain open [3][7]. The quarter's reported results already absorbed a $149 million after-tax charge from related proposed decisions [1], and Sempra's filing warns that damages from the January 2025 [Eaton](https://theinference.org/markets/companies/eaton) fire could materially reduce or exhaust the wildfire fund backing its California utilities [3].

## The discount now has a size and a calendar

[ERCOT's audit report is due December 10](https://www.msn.com/en-us/money/general/ercot-probes-whether-texas-data-centers-are-downsizing-projects-to-avoid-grid-review/ar-AA2gTKEG) and goes to the Public Utility Commission on December 17 [8]. Measured against the build, the $188 million item is about 2% of the roughly $9.5 billion the Oncor step-up adds to the five-year plan [1][2]. That is the trade in plain terms: if the audit confirms the queue and the commission corrects what management calls an accounting error, 2027 moves back toward the top of its range; if neither happens, the discount was earned [1][2].

## Takeaway

Oncor's data-center queue is turning into regulated capex and a five-year plan set to rise about 20%, but a California rate denial and an unverified Texas queue hold 2027 near the bottom of guidance until December's ERCOT audit and any appeal land.

## Sources

1. [Earnings Whispers via Finviz, Sempra's Texas-Driven Beat Lifts 2026 Outlook, But A California Ruling Clouds 2027, November 5, 2026](https://finviz.com/news/417523/sempras-texas-driven-beat-lifts-2026-outlook-but-a-california-ruling-clouds-2027)
2. [Sempra press release via MarketScreener, Sempra Reports Strong Third-Quarter 2026 Results, November 5, 2026](https://www.marketscreener.com/news/sempra-reports-strong-third-quarter-2026-results-ce785fdcde88f62d)
3. [Utility Dive via Yahoo Finance (Diana DiGangi), Sempra expects 20% increase to Oncor's spending plan, driven by load growth, November 6, 2026](https://finance.yahoo.com/energy/articles/sempra-expects-20-increase-oncor-161036651.html)
4. [Ad-hoc-news, Sempra stock resets outlook after stronger third-quarter results, November 6, 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/sempra-stock-resets-outlook-after-stronger-third-quarter-results/70471171)
5. [Oncor Electric Delivery via PR Newswire, Oncor Reports Third Quarter 2026 Results, November 5, 2026](https://www.prnewswire.com/news-releases/oncor-reports-third-quarter-2026-results-302930053.html)
6. [Baker Botts via JD Supra, Texas Large Load Interconnection Update: ERCOT Batch Zero Pause and Verification Process, August 18, 2026](https://www.jdsupra.com/legalnews/texas-large-load-interconnection-update-4882708/)
7. [MarketBeat, Sempra Energy Q3 Earnings Call Highlights, November 7, 2026](https://www.marketbeat.com/instant-alerts/transcript-sempra-energy-q3-earnings-call-highlights-2026-11-07/)
8. [San Antonio Express-News via MSN (Kelsey Brown), ERCOT probes whether Texas data centers are downsizing projects to avoid grid review, November 6, 2026](https://www.msn.com/en-us/money/general/ercot-probes-whether-texas-data-centers-are-downsizing-projects-to-avoid-grid-review/ar-AA2gTKEG)


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Sempra's Texas grid plan grows 20%; California's $188 million rate denial pushes 2027 toward the low end — The Inference. Canonical: https://theinference.org/article/sempra-s-texas-grid-plan-grows-20-california-s-188-million-rate-denial-pushes-2027-toward-the-low-end