With a multibillion-dollar utility acquisition under its belt, Sempra Energy easily landed first among power companies in terms of planned capital expenditure growth at 237.30%, according to an S&P Global Market Intelligence analysis. The majority of the companies on the list are investing more in 2018.
Sempra has a planned CapEx of $13.32 billion for 2018. This includes approximately $9.45 billion in merger consideration and $250 million in capital contribution and transaction costs associated with its deal for Energy Future Holdings Corp. and its majority stake in Dallas, Texas, transmission and distribution utility Oncor Electric Delivery Co. LLC.
The acquisition closed on March 9.
Without these merger-related items, the company's planned capital expenditure of approximately $3.62 billion is slightly lower than the $3.95 billion it allotted for 2017. The bulk of these other 2018 investments are planned to go toward improving the electric and natural gas distribution systems of San Diego Gas & Electric Co. and the natural gas distribution, transmission and storage systems of Southern California Gas Co.
Sempra is also earmarking $320 million for the development of LNG and natural gas transportation projects under its Sempra LNG & Midstream unit. The company is currently building the Cameron LNG three-train liquefaction project.
Trailing Sempra at a distant second is DTE Energy Co. with planned CapEx year-over-year growth of 58.22%. DTE Energy is allotting investments of $3.56 billion in 2018, compared with $2.25 billion last year.
"The next few years will be a period of rapid change for DTE Energy and for the energy industry. DTE Energy's strong utility base, combined with its integrated non-utility operations, position it well for long-term growth," the company said in its annual filing.
Over the 2018-2022 period, DTE estimates capital investments at DTE Electric of $10.4 billion for capital replacements, distribution infrastructure and new generation, and at DTE Gas of $2.1 billion for base structure, pipeline integrity programs and NEXUS Pipeline-rated expenditures.
By planned CapEx amount, Duke Energy Corp. comes second to Sempra Energy at $10.95 billion, representing a 29.34% increase from 2017. The company, however, plans to reduce its CapEx over the 2018-2022 period by approximately $1 billion to strengthen its balance sheet and bolster cash flows.
For 2018, Duke Energy is investing approximately $8.18 billion for electric utilities and infrastructure, $2.35 billion for gas utilities and infrastructure and $425 million for commercial renewables and other.
The expenditures for electric utilities and infrastructure are mostly for grid modernization and maintenance. It also includes $780 million for new generation and $610 million in environmental investments, which will drop to $260 million and $35 million, respectively, in 2019.
Investments on regulated renewables, on the other hand, are expected to grow from $155 million in 2018 to $415 million in 2019.
"Looking forward, we have the right long-term strategy in place, supported by a solid capital growth plan," Duke Energy Chairman, President and CEO Lynn Good said back in February. "Our vision is clear: we are investing in infrastructure our customers value and delivering sustainable growth for our investors.
Meanwhile, NextEra Energy Inc. is lowering its planned CapEx by 14.66% to $9.17 billion in 2018. The company aims to continue scaling back its capital investments to $6.04 billion in 2019 and to $4.85 billion in 2020.
Of the total 2018 CapEx, NextEra is allocating $5.05 billion for regulated utility Florida Power & Light Co. and $4.07 billion for competitive unit NextEra Energy Resources LLC.
Over half of the planned investments at FPL will go to transmission and distribution and new and existing generation.
For NextEra Energy Resources, approximately $2.11 billion will go to wind-related investments and $955 million for natural gas pipelines. Wind related-investments will drop to $1.81 billion in 2019 and to $110 million in 2020, while pipeline investments will drop to $50 million in 2019 and $25 million in $25 million.
"With the certainty provided by the new tax reform legislation and the anticipated continued strength of the investment opportunities at both FPL and NextEra Energy Resources, NextEra Energy is also extending its longer-term growth outlook to 2021," the company said in January. NextEra expects compound annual growth in adjusted EPS to be in a range of 6% to 8% through 2021.
Other companies that have lowered their planned CapEx in 2018 include Dominion Energy Inc., Public Service Enterprise Group Inc. and Avangrid Inc.