Good morning, everyone, and welcome to Sempra's 2021 Investor Day. I hope you found the opening video informative. I think it does a good job of capturing why we're so excited about the future of our company. Today, we'd like to address many of the key questions and topics that a lot of you have raised leading up to this conference. In doing so, we will cover our 3 growth platforms: California Utilities, Texas Utilities and Sempra Infrastructure.
In each of those presentations, we'll cover the business strategy and capital plans, as well as spotlighting some key areas of innovation and technology. Afterwards, I'll wrap up with a fulsome update on our financial plan. Our three business platforms are strategically positioned in what we believe are the most attractive markets in North America to play a critical role in the energy future. Our strategic priorities continue to be centered around executing on our $32,000,000,000 base capital plan, strengthening the balance sheet and returning cash to shareholders. Moreover, our robust capital plan focused on our California and Texas utilities provides visibility into the strength of our forecasted EPS growth.
We're excited about today's event, where you'll have the opportunity to hear from several members of our management team and we'll be sure to allow plenty of time for Q and A at the end of today's session. And with that, I'll turn the presentation over to Neli.
Thank you, Trevor. Good morning, everyone. It is my pleasure to welcome you to Sempra's 2021 Investor Day. We truly appreciate you taking the time to join us virtually today. As Trevor stated, today, we intend to convey why we are so excited about the progress we are making on our mission to be North America's premier energy infrastructure company and also to address many of the questions you've asked us recently.
Let's start with some housekeeping items. 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 discussed today. The factors that could cause our actual results to differ materially are discussed in the company's most recent 10 ks and 10 Q filed with the SEC. It's important to note that all of the earnings per share amounts in our presentation are shown on a diluted basis and that we'll be discussing certain non GAAP financial measures.
Please refer to the presentation slides that accompany this call for reconciliation to GAAP measures. I'd also like to mention that the forward looking statements contained in this presentation speak only as of today, June 29, 2021, and the company does not assume any obligation to update or revise any of these forward looking statements in the future. With that, let me provide some details for the agenda today. In a moment, you will hear first from our Chairman and Chief Executive Officer, Jeff Martin, on how we're enabling the energy transition and his long term vision of our company. Next, we'll dive into the Sempra California presentation by Kevin Sagara, Group President and then hear from Alan Nye, Chief Executive Officer of Encore followed by the Sempra Infrastructure presentation by Justin Bird, Chief Executive Officer of Sempra LNG.
And lastly, we'll hear from Trevor Mihalik, our Executive Vice President and Chief Financial Officer, who will present the financial section. And after that, we'll open it up to a question and answer session with the executive leadership team. Also joining us for the Q and A portion is Lisa LaRocque Alexander, Senior Vice President of Corporate Affairs and Chief Sustainability Officer and Tania Ortiz, CEO of Vianova. With that, let me now hand the call over to Jeff.
Thank you, Nelly. I know the summer months are a busy time, so let me again thank everyone for joining us. In kicking off today's conference, I thought what would be helpful is to share with you what we're seeing in the energy markets, how we think about opportunities generally and how these considerations inform our business strategy. As we look across the balance of this decade, we see the economies of North America becoming increasingly integrated. We see this in a variety of areas such as the recent passage of the new North American Trade Agreement, which is intended to further reduce trade barriers new efforts to increase the integration of our transportation, rail and energy networks, greater collaboration on the monetary and political front and renewed efforts to reshore supply chains from Asia right back to this continent.
As a company, believe we're well positioned to build the critical energy infrastructure that will be needed to support this new growth, while also accelerating North America's transition to cleaner forms of energy. And in terms of key themes you'll be hearing about today, we believe our competitive advantage lies in our enterprise wide commitment to innovation, sustainability and leadership. Please turn to the next slide. Here at Sempra, we believe the global energy markets are going to change pretty dramatically over the next 30 years. And with an expected rise in global living standards and population growth, there will be a real challenge to meet sustainability goals.
Here in North America, we expect that energy investments over the next 2 decades will be centered around decarbonization strategies, specifically investments in new infrastructure to expand and modernize North America's energy networks. That's why we believe innovative companies with a compelling value proposition, a strong balance sheet and a commitment to decarbonization, particularly companies focused on solving energy challenges market by market will perform well over time. This long term view of the energy transition and the opportunities we expect along the way is central to our overall infrastructure strategy. Please turn to the next slide. One of the greatest challenges of the 21st century is how to produce more energy for more people with lower carbon content.
By 2,040, 90% of growth in greenhouse gas emissions is expected to come from emerging and developing countries. This really frames the nature of the challenge. Advanced nations like the United States will need to decarbonize at home, while also leading crucial investments that are necessary to support decarbonization pathways in developing nations. To achieve net 0 by 2,050, the United States needs to lead this challenge through a commitment to electrification and renewables at home together with the greening of natural gas networks, all while innovation and supporting energy diversification in developing economies. Please turn to the next slide.
Based on the policy goals that support a low carbon economy, North America's energy markets require significant capital And our portfolio, which extends from California to Mexico City and across the Gulf Coast to Louisiana is well positioned. For example, the population in Texas is expected to grow by almost twice the national rate through 2,040 and economic growth in the Southwestern United States and Mexico is expected to outpace the rest of the U. S. At the conclusion of our conference, I'll rejoin you by video to provide some key information that highlights the significance of economic growth as a key driver of utility growth. Please turn to the next slide.
As previously mentioned, our energy networks are situated in the leading markets in North America and are well positioned to create strong future value for our shareholders. We're doing this by delivering low and 0 carbon energy through our T and D infrastructure, delivering affordable natural gas through our network to support additional renewable energy penetration and through our LNG infrastructure to help displace higher carbon emitting fuels such as coal and oil in emerging markets. And we're also investing in renewable energy projects to provide carbon free energy to the grid in both Mexico and the Southwestern United States. Please turn to the next slide. We've shown a similar version of this slide several times now, but as the global energy markets continue to evolve, we think it's important to again highlight the value of our T and D platform.
Within the energy value chain, we're strategically focused on the investments we believe provide attractive risk adjusted returns. And that means we're focused on building smart new energy infrastructure with a transmission and distribution like risk profile. This strategy is specifically intended to limit commodity and retail risk across our franchise, while providing strong visibility to future earnings. When you think about the current commodity cycle or weather events like we've recently experienced in California and Texas, it really reinforces why our commitment to T and D like investments positions us to deliver consistent financial returns and a growing dividend across a variety of market conditions. Please turn to the next slide.
All three of our infrastructure platforms play an important role in advancing safety, reliability and de carbonization. At our California utilities, we continue to focus on improving our safety systems and integrating renewable energy and advanced batteries into the system and supporting California's goal of getting 5,000,000 electric vehicles on the road by 2,030. At Encore, we're also benefiting from improvements in safety and reliability, while also connecting customers to cleaner renewable energy by expanding and modernizing Texas' vast transmission and distribution network. And lastly, at Sempra Infrastructure, we're building our energy networks to improve access to lower carbon energy. Please turn to the next slide where I'll review the role of each of our infrastructure platforms.
Our infrastructure platforms benefit from 3 competitive advantages: scale benefits in attractive markets, T and D benefits of lower risk and consistent cash flows and the benefit of positive growth trends that we're seeing across the footprint of our company. Our three platforms combined for nearly 290,000 miles of transmission and distribution lines, all in key markets in North America, while serving approximately 36,000,000 consumers. California, Texas and Mexico are established market leaders in solar and wind production here in North America and support both economic growth and the clean energy transition. Lastly, our 3 platforms generated Since 2018, we've been laser focused on executing our North American infrastructure strategy. That focus has culminated today with our announcement that we're updating our corporate brand.
We have three goals here. 1st, shifting our focus squarely onto our infrastructure strategy. By removing energy from our name, it also emphasizes the strength of the Sempra wordmark. 2nd, we're modernizing our art mark to further reinforce the ideal of service to others. This was one of our foundational values in 1998 and remains just as relevant today.
And finally, a strong and modernized brand platform reflects our company's commitment to be a leader in solving some of the greatest challenges that face our industry. Please turn to the next slide. A high performance culture is key to the success of any organization. We strengthen the alignment around our infrastructure strategy. We also believe we have some of the best employees in the industry.
And by investing in an increasingly talented and diverse workforce, it helps us continue to grow our company, to become more profitable and to better serve the common good in society. Please turn to the last slide. To conclude, over the years, we've invested time and energy into building a high performing culture on top of 3 of the leading infrastructure platforms in our industry. Overlaid with a commitment to capital discipline, we think it creates a competitive value proposition, one that has historically supported attractive adjusted EPS growth as compared to both the S and P 500 and S and P 500 Utility Index. We're excited about the future at Sempra and the critical role that infrastructure companies like ours will play in supporting our customers and the energy transition.
Now let me hand the call over to Kevin Segarra who will provide an overview of our California utilities.
Thank you, Jeff. I'm very excited to be with you today to talk about our California platform. Both SDG and E and SoCal Gas are top tier franchises in the California market where clean energy innovation and technology is at the forefront for the rest of the nation with that I'll kick off the presentation. Over the past several decades, California has led the United States in progressive regulation focused on safety, reliability and clean energy. Over that same time, we've built a leading utility franchise in California and we're enabling the energy transition by closely aligning our investments to deliver the climate objectives of the state.
Please turn to the next slide. At both SDG and E and SoCalGas, we're committed to providing safe, reliable and cleaner energy to all of our consumers throughout Southern and Central California. As Jeff mentioned earlier, our California utilities serve over 26,000,000 consumers. In addition, California is the largest economy in the United States and the 5th largest in the world. It's also the leader in manufacturing and home to some of the largest industrial ports in North America.
In short, California is a dynamo of economic growth. As we go through this presentation, I'll highlight the company's operational excellence, key accomplishments in areas such as innovation and technology, and how the company's plan to play a leadership role in advancing cleaner energy solutions as well as future investment opportunities. Please turn to the next slide. There have been many important milestones recently that underscore our California utilities strong performance and help provide positive momentum and future earnings visibility. SDG and E and SoCalGas received a decision in their petition for modification of the 2019 general rate case establishing attrition rates for 20222023.
This decision supports the already constructive outcomes of the GRC, which established a one time transitional 5 year period and was based on the risk assessment mitigation phase process that is focused on continued safe and reliable service to our customers. Turning to pipeline safety, SoCalGas has made significant progress and has already nearly met California's 2025 goal of 20% greenhouse gas emission reductions. It's also continuing to execute on its strategy to achieve at least a 40% emissions reduction by 2,030. In the area of wildfire mitigation, SDG and E continues to be a leader by investing in fire hardening to support public safety. We're always innovating, and I'll share updates on our top tier wildfire mitigation program later in the presentation.
In the area of sustainability, both SDG and E and So Cal Gas recently announced their goal to achieve net 0 GHG emissions by 2,045 across scopes 1, 23. Lastly, I wanted to quickly highlight SDG and E's recent renewal of its franchise agreement with the City of San Diego. The completion of the franchise agreement earlier this month was an important milestone for SDG and E. We feel positive about the continued collaboration with the City of San Diego, and we look forward to continuing to serve the city's residents who are also customers. Please turn to the next slide.
California is helping to lead the nation in clean energy policy and the state has set ambitious goals to decarbonize various industries across different sectors of the economy such as transportation, which represents a big tailwind for potential future investment opportunities. In addition, customer demand continues to be robust and is expected to nearly double over the next quarter of the century. Altogether, this creates a very favorable environment for the California utilities to operate and invest in critical energy infrastructure. Please turn to the next slide. We continue to think of California as having a constructive regulatory environment that supports both SDG and E and SoCalGas as they help advance a cleaner energy system.
Our California utilities combined had a rate base of over $19,000,000,000 as the end of last year and are projecting a rate based compound annual growth rate of approximately 10% through 2025. As you know, since California has decoupled SDG and E and SoCalGas are T and D regulated businesses with no earnings exposure to fluctuations in volume or commodity prices. As California looks to decarbonize other sectors of the economy, both utilities have a role to play in this transition. For example, transportation emissions are the single largest contributor to GHG emissions in California, accounting for over 40% of the total emissions. Therefore, to achieve the state's policy goals, there must be a transition to electric and other vehicles that run on cleaner fuels such as RNG and hydrogen.
Other important examples are the industrial and agricultural sectors. For instance, we partnered with large industrials to provide RNG to the gas system as a cleaner source of gas molecules and eventually renewable hydrogen could be produced and blended in the gas system. We see all of these as opportunities to increase our overall system utilization and ultimately the value of our T and D systems well into the future. Please turn to the next slide. Our California utilities have implemented several innovations and technological advancements to better serve our customers, focusing on improving safety, reliability and operational efficiencies.
For example, we're implementing artificial intelligence and machine learning models that are enabling the automatic detection of electric infrastructure asset damage. SD Ginnie also has an award winning app for tracking usage and reporting outages. Both utilities have increased their usage of aerial technology and wildfire mitigation and methane detection, and have implemented process automations to increase operating efficiencies. This culture of fostering innovation and continuous improvement for the benefit of our customers and the communities we serve is what state needs to help meet its ambitious clean energy goals. Please turn to the next slide.
As California looks at ways to decarbonize the future energy systems, it will require a combination of clean electrons and clean molecules. This will happen through deploying innovative technologies in our energy networks to provide solutions to our customers such as 0 emission vehicles, distributed energy, RNG and hydrogen. You can see here by the tremendous breadth of the offerings on this slide, this portfolio of solutions represents a sizable opportunity for the California utilities as it signifies additional necessary investments in infrastructure to support connecting cleaner energy to load centers and modernizing our energy systems to help enable the energy transition. I'm excited to point out that just this month, SoCalGas' H2 Hydrogen Home Project was named a 2021 world changing idea by Fast Company Magazine. Please turn to the next slide.
As part of the California utilities innovation and technology spotlight, I wanted to talk about how we're continuing to advance what is an industry leading wildfire mitigation program. I know many of you have had the chance to visit and see our emergency operations center yourselves over the past few years. SDG and E has invested more than $3,000,000,000 in making our system more wildfire resistant and safer. We've been at this for well over a decade, building out our weather networks and developing an in house meteorology team to monitor real time weather events. We then continue to build out our weather modeling and analytical tools, while also continuing to fire harden SDG and E's infrastructure assets.
We work with communities regarding safety protocols and set up alerts that forecast weather conditions several days in advance. We then developed a vegetation risk index, which helps quantify risk associated with vegetation and high fire risk areas. Currently, the SDG and E's latest advancements were further implementing artificial intelligence, greater use of micro grids and mobile technology to keep customers energized and informed. Please turn to the next slide. As we look at where we are today, as a result of innovating over the past 14 years, we believe we've achieved differentiated outcomes for SDG and E's customers through our efforts to reduce and mitigate wildfire risks.
That said, SDG and E will never rest in this area and continues to innovate. Please turn to the next slide. Before I wrap up, I'd like to quickly highlight the robust capital plans of both SDG and E and SoCalGas. The 2021 to 2025 plan represents an increase of $900,000,000 over the 2020 to 2024 plan. You can see from the graph on the right that we're forecasting a strong rate based compound annual growth rate of approximately 10% over the 5 year plan period.
And our plans have strong visibility given the current 5 year GRC cycle that runs through 2023. Please turn to the next slide. In summary, I want to leave you with 5 key takeaways. Our California utilities are working to deliver cleaner, safer and more reliable energy to 26,000,000 consumers. They're seeing strong organic growth and earnings visibility, operating in a constructive regulatory environment, continuing to be a leader in innovation and technology and are supporting the build out of a cleaner energy system.
So with that, I'll conclude and turn it over to my friend and colleague, Alan Nye, the CEO of Encore. Thank you.
Thank you, Kevin, and good morning, everyone. I'm Alan Nye, and I have the pleasure of serving as CEO of Encore Electric Delivery Company. Today, I will only be addressing Oncor's business, which is part of the Sempra Texas platform. While I wish we could all be together today in person, I very much appreciate the opportunity to update you on our great company, all of the exciting things going on in Texas, across our service territory and on our many accomplishments over the last year, all made possible by the incredible efforts of our almost 4,400 dedicated employees. Oncor is proud to have a long history of service to the state of Texas.
As a state, Texas produces the most energy in the United States. At Oncor, we understand the fundamental importance of reliability in delivering that energy. We believe that our strong T and D franchise and substantial service territory will allow us to play a pivotal role in developing the critical infrastructure needed by our state. Please turn to the next slide. The last year was incredibly challenging for all of us.
However, I am here today to tell you that Texas continues to show incredible resiliency and Encore continues to perform exceptionally well. First, let me give you a brief overview of our company. With over 139,000 miles of transmission and distribution lines and more than 1100 substations, Encore is the largest transmission and distribution utility in Texas and the largest pure play wires company in America. Over 10,000,000 Texans count on us 24 hours a day, 7 days a week to provide safe, reliable and affordable electric service. We're also able to serve those Texans with some of the lowest rates of any investor owned utility in Texas.
Our service territory covers over 54,000 square miles. It's a growing, vibrant, economically diverse area and home to a wide variety of businesses and industries. Turning to Texas as a whole. We have a top tier position largest economy in the United States. This leadership position paired with the strength and diversity of the Texas economy makes the area we serve one of the premier service territories in the nation.
Please turn to the next slide. Despite the challenges over the last 15 months, from an operational perspective, we had another great year. We successfully constructed or reconducted more than 2,300 miles of transmission and distribution lines. We achieved top quartile in the industry for reliability, a full year ahead of schedule and with significant additional improvements to come in the years ahead. These results were attained while incurring 0 lost time injuries or LTIs and achieving industry top decile performance in both LTIs and DARTs or days away restricted or transferred injuries.
Finally, we produced strong financial results as seen in the right column and we expect to continue to deliver in the years ahead. Please turn to the next slide. As I've alluded to before, the Texas Miracle continues to be alive and well with strong demographic growth. Texas continues to grow by more than 1,000 people per day. In fact, the Dallas Fort Worth Metroplex gained more residents over the past decade than any other metro area in the U.
S, leading all metro areas for the 2nd decade in a row. But it's not just DFW that is seeing significant growth. Over the past decade, Encore has and continues to serve 3 of the top 15 fastest growing cities and 4 of the top 10 fastest growing counties in America. With regard to our service territory, when I talk to you all about growth, I generally discuss 4 categories: 1, premise growth 2, transmission points of interconnection 3, West Texas metrics and 4, economic development. As you can see in the center column, we have very strong indicators for each category.
We have record premise growth, more than 2 times the national industry average, and additionally, transmission points of interconnection are currently at a historic high for our company. In West Texas, we continue to see strong growth and opportunities to invest, driven by significant demand. In the far right column, you can see the continued robust development of renewables in Texas. As I've said before, given the size and location of our service territory, Oncor is well positioned to capture growth associated with the energy transition in Texas. In conclusion, we believe the Encore service territory continues to offer one of the most attractive macro environments in the nation.
Please turn to the next slide. Notwithstanding the challenges of winter storm Yuri and the resulting changes at the PUC and ERCOT, we continue to believe that Texas remains one of the premier regulatory jurisdictions in the country. We have efficient capital recovery tracker mechanisms, which limit the regulatory lag associated with our investments. Encore has a strong track record of working collaboratively with our regulators and fellow market participants to reach mutually beneficial outcomes. The most recent example being our request to delay our regularly scheduled rate case, which is supported by our primary stakeholders, including commission staff and should be ruled on by the commission in the near future.
We have a long history of service to our customers, to the state and to the ERCOT market and will continue to do so in the future. Please turn to the next slide. Currently at Oncor, our culture of innovation is helping us to deploy new innovative technologies and programs that help improve our operations and enhance the service we provide to our customers. For example, ENCORE's data network provides the platform for stakeholders to transact in the ERCOT market. In 2020, more than 119,000,000 electronic data interchange transactions occurred between Encore and other ERCOT market participants.
As the largest utility in the state, constantly looking to provide our customers with better service, we've now provided a full suite of digital tools designed to enhance the customer experience. While the EV market in Texas is still very much in its infancy, with a high CAGR and projected material growth by 2,030, Encore has recently built and deployed an industry leading green fleet planning tool capable of forecasting EV impact on localized transmission and distribution infrastructure, 5 to 7 years out and beyond. This will help us to ensure that we can develop the necessary infrastructure to power EV fleets. A similar growth area for us over the past several years has been in the field of aerial technology. Using helicopters and drones that can measure and track thermal emissions, we can preemptively identify potential safety and vegetation management issues we need to address.
Please turn to the next slide. Continuing on Encore's innovation culture, I'd like to highlight some really interesting ways in which we're deploying advanced technologies focused on providing innovative solutions to our customers. Leveraging the power of machine learning, are able to automatically identify information or visuals submitted by our customers and route them to the necessary team internally to respond. Similarly, more than 3,500,000 customer outage minutes have been avoided in the past 5 years, thanks to our predictive transformer maintenance program. A particularly innovative program that we've developed and actively deployed in our everyday field operations is our AI Satellite Vegetation Management program.
Essentially, we combine advanced analytics and artificial intelligence with low cost, publicly available satellite imagery to identify vegetation system wide to forecast growth rates, so we can better target potential problem areas and streamline our vegetation management spend. Please turn to the next slide. The significant growth across our service territory we've discussed is driving an unprecedented capital plan. Over the next 5 years, Oncor plans to spend more than $12,200,000,000 in CapEx. I will have more information later this year after the Encore Board approves our 2022 capital plan, but we're seeing significant growth above what we've previously projected and expect to increase our capital plan more in 2022 and possibly beyond.
Based on our current capital plan, we're projecting an approximate 7% rate base CAGR through 2025. Please turn to the next slide. While the Encore Board of Directors approves annual capital plans every year at our October Board meeting, I can tell you today that we're forecasting that Encore expects to increase its capital plan for 2022 by $325,000,000 to $400,000,000 In addition to our 5 year CapEx plan, there remain additional incremental opportunities to invest on our system. As before, we'll continue to evaluate those opportunities and make investments that are reasonable and necessary to serve our customers and support the ERCOT market. Please turn to the next slide.
To summarize, Encore is an innovative and cost effective pure play T and D infrastructure company with a premier market position and a fast growing service territory. We deliver cleaner, safer and more reliable energy. We have strong and persistent growth with a constructive regulatory environment. We have a culture of innovation that allows us to implement advanced technologies, programs and analytics across our system. We're investing in critical T and D infrastructure and we're playing our part to support the energy transition.
And with that, thank you very much for the opportunity to present to you this morning. I very much look forward to your questions.
Thanks, Alan. I'm Justin Bird, the CEO of Sempra LNG. As you will recall, we announced a series of transactions designed to advance our strategy organizing our infrastructure business around a common growth platform. Today, I'm excited to walk you through the investment opportunities at Sempra Infrastructure. Please turn to the next slide.
Through the combined strength of our assets in North America, we are dedicated to investing in infrastructure to build the energy systems of the future. At Sempra Infrastructure, our mission is to deliver energy for change. Our infrastructure provides services and solutions to our customers to help reduce greenhouse gas emissions and facilitate the energy transition. We see a pathway where natural gas and renewables can help reduce global emissions significantly in the next 2 decades. We look forward to investing in this solution.
Please turn to the next slide. As you can see on this slide, we've successfully built a profitable and robust franchise serving the energy infrastructure needs of our customers in North America and around the world. Our franchise is critical in supporting international trade and the North American economy and that's why we've been able to secure long term take or pay U. S. Dollar denominated contracts.
Our LNG assets have exported to 25 countries around the world. As Jeff mentioned earlier, our infrastructure supports the integration of the U. S. And Mexico economies. Our terminals and port facilities support both the export and import of transportation fuels.
Our gas network support over 9.5 Bcf per day of natural gas exports to Mexico. Our renewable power assets and transmission tie lines support the flow of electricity between the two countries. Furthermore, we forged high quality relationships with strong counterparties around the world. Please turn to the next slide. Before we go into some of the major trends that we're following, let me talk about some of our operating highlights.
I'm proud of our operating results. I'd like to note that my leadership partners in the infrastructure platform, Tanya Ortiz and Lisa a that exist across the border. In this regard, we reached COD on our Don Diego solar project at the end of last year. Earlier this year, we finalized the acquisition of the remaining 50 percent equity interest in the ESJ wind project, substantially expanding our renewable capacity. 2nd, ECA LNG Phase 1 was the only LNG project to reach a final investment decision last year.
We're always focused on safety and reliability. We delivered with our partners almost 90 1,000,000 work hours without a lost time incident during the construction of the Cameron Phase 1 facility. 3rd, we began commercial operations of our marine terminal and associated rail facilities at the Port of Veracruz. Lastly, we continue to find efficient ways to finance growth in our infrastructure business. Earlier this year, we announced our agreement to sell a 20% non controlling interest to KKR for $3,370,000,000 Subject to customary closing conditions and certain approvals from third parties and regulatory agencies, we're on track to close the transaction in the coming weeks.
Please turn to the next slide. Now let me talk about the trends we're seeing in the infrastructure space that give us confidence in the growth opportunities ahead. First off, in North America alone, nearly $15,000,000,000,000 of investment is needed over the next 2 decades to support aging infrastructure. Additionally, it is estimated that over $2,000,000,000,000 need to be spent over the next decade in order to position the U. S.
To reach net zero by 2,050. Outside of the U. S, global greenhouse gas emissions are mainly driven by the combustion of coal and oil. Not only do we need to invest in affordable, cleaner energy solutions in North America, we also need to invest in exporting affordable, cleaner energy out of North America to the rest of the world. Again, we believe the combination of renewables and natural gas can help lower global greenhouse gas emissions over the next 2 decades, and this is where our infrastructure platform is extremely well positioned.
Turn to the next slide. Now let's get into Sempra Infrastructure's major business lines and the value proposition that we have in front of us, starting with clean power. We are currently operating and constructing approximately 1,000 megawatts of renewable projects in Mexico. We also have nearly 3 Gigawatts of Cross Border Solar, Wind and Battery Development Projects that could provide renewable power to the U. S.
Southwest. When you consider our development pipeline combined with our ownership and cross border transmission lines, we offer a low cost and efficient renewable power resource to these markets. A great example of this is ESJ, where we are currently developing over 100 megawatts of capacity from a wind resource that offers 37% capacity factor. Additionally, this land position has the potential for an incremental 300 megawatts. It can also support our battery storage project, which I'll touch on later.
Please turn to the next slide. Turning to our LNG business, you will note that we have expanded our focus to include net zero solutions. While we expect natural gas to continue to play a role in the energy transition, we see exciting and new opportunities in carbon capture and sequestration as well as hydrogen. As highlighted by IEA, natural gas is projected to become of the largest global energy sources by 2,040. Our liquefaction projects in operation, under construction and in development are strategically located on the Pacific and Gulf Coast to provide access to abundant and affordable U.
S. Natural gas. At ECA LNG Phase 1, construction has commenced and is going well, and we expect first LNG by the end of 2024. Phase 1 of this project has an expected offtake capacity of approximately 3,000,000 tons per annum and given its location on the Pacific Coast is positioned to competitively serve customers in Asia who value the shorter shipping distances and the depth of the U. S.
Gas markets. At Port Arthur, we're evaluating design changes to reduce the proposed LNG projects overall emissions, including electric drives, renewable power sourcing and other technological solutions. We have been approached by parties interested in participating in carbon capture and or hydrogen facilities at Port Arthur. These are in addition to the proposed LNG facility and we are actively pursuing these exciting opportunities. As we evaluate these opportunities at Port Arthur and Aramco reevaluates its international gas strategy, we have mutually agreed to let our existing agreements between Aramco Services Company and Sempra LNG expire.
Our relationship with Saudi Aramco is important to us and as we continue our discussions with them, we look forward to partnering with them in the future. Turning to Cameron, we're excited about the Cameron expansion opportunity is shaping up. We expect Cameron Phase 2 to be a cost competitive LNG project. While we were previously looking at 2 additional trains at Phase 2, innovations in train design coupled with the high performance of Trains 1 through 3 are expected to result in a highly capital efficient expansion, allowing us to achieve a lower CapEx per ton of capacity with 1 larger train and without the need for additional tanks or berths. With this configuration, we expect to achieve an offtake capacity of over 6,000,000 tonnes per annum while still preserving opportunities for debottlenecking and up to 3 more LNG trains or other types of clean energy infrastructure.
We are also actively evaluating the incorporation of E drives for the refrigeration compressors for Train 4. Doing so will not only increase production, but has the potential to reduce greenhouse gas emissions by 60% to 65%. We have existing MOUs with Total, Mitsui and Mitsubishi and we're currently working with our partners through pre FEED with the objective of starting FEED this year and reaching FID around the end of 2022. Please turn to the next slide. Moving on to the Energy Networks portfolio.
We have a significant market position in key growth areas. We're the owner of 11 of 25 cross border natural gas pipelines in North America and the developer of 30 percent of new fuels storage capacity in Mexico. Within our portfolio is the South Texas Tuxpin Pipeline, an approximately 500 mile natural gas marine pipeline. It is one of the first natural gas marine pipelines of its type in Mexico, with a capacity of approximately 2.6 Bcf per day with 1 compression station. The asset is critical to serving the Southeast of Mexico's growing energy needs by connecting it to U.
S. Abundant supply. Separately, our Gulf of Mexico terminal network includes the recently completed marine terminal in Veracruz, which is interconnected approximately
3,400,000
barrels, supporting the approximately 3,400,000 barrels, supporting the stability of transportation fuels in Mexico. Please turn to the next slide. Now let's move on to what drives the future of our business, innovation and technology. At Sempra Infrastructure, we use innovation and technology to improve all aspects of our business. Along these lines, we're investing in emissions reduction technology, carbon capture and sequestration, hydrogen and battery storage.
We're very excited about what we're doing in our Hackberry carbon sequestration project that we're developing with our Cameron LNG partners. It is expected to have a projected sequestration capacity of 4,500,000 tons per annum, which would allow us to not only sequester CO2 from Cameron, but also from other industrial facilities in the vicinity. Once completed, we expect Hackberry Carbon Sequestration would serve as the beginning of a hub for the Lake Charles area to help the region reach its net zero goal. We also expect that the facility could be eligible for U. S.
Tax credits. Let me highlight one more opportunity I'm also excited about. Tanya and her team are developing a 500 Megawatt battery storage system adjacent to our TDM power plant directly connected into the California ISO system. We're currently working with potential customers for offtake from this proposed facility. Please turn to the next slide.
Now let's talk about what the future of our infrastructure platform looks like. We've demonstrated capability to build large scale infrastructure. Over the last 25 years, we've built over 3 gigawatts of renewable power, world class LNG and re gas terminals, thousands of miles of natural gas pipelines and a network of fuels terminals as well as associated marine terminal capacity. Looking at the graphic on this slide, we believe we can compete in these parts of the value chain and 0 emissions goal. Please turn to the next slide.
Here I'd like to quickly touch on a few financial highlights. Our current 5 capital plan calls for us spending approximately $3,000,000,000 primarily for ECA LNG Phase 1 and its associated pipeline facilities. Sempra Infrastructure is expected to have approximately $1,570,000,000 of proportional adjusted EBITDA in 2022, which represents Sempra's 80% share. Our business is supported by contracts with an average remaining tenure of approximately 20 years. Over 90% of prospective GAAP revenues are from investment grade counterparties, state owned enterprises and BP Tengu.
Lastly, Trevor and his team are working with the rating agencies and are targeting investment grade credit rating for Sempra Infrastructure. Please turn to the next slide. As you've heard me discuss today, we see tremendous potential for future investment opportunities supporting the energy system of the future. In this table, we've identified our share of over $5,000,000,000 of potential capital investments across several areas, including opportunities in new technologies such as carbon capture and hydrogen, all of which are incremental to our existing plan. Some of the projects in this estimate include our share of the proposed Cameron expansion, our battery storage opportunity and the proposed expansion of our wind capacity near the border.
Please turn to the next slide. Finally, let me summarize for you the value proposition for Sempra Infrastructure, a leading North American platform with significant scale. We're building a business that we expect will play a crucial role in the global energy transition. We're investing in high quality assets in attractive markets that support sustainable economic growth. Our revenues are backed by long term contracts with strong creditworthy counterparties.
And as I've discussed, we're well positioned to advance significant future growth opportunities. Thank you. And now I'll hand the call over to Trevor, who will go over Sempra's financials.
Thank you, Justin. I will now provide an update on Sempra's financial outlook as well as articulate how our mission to be North America's premier energy infrastructure company supports our strong financial performance. Please turn to the next slide. We feel very optimistic about the strong organic growth and enhanced earnings visibility resulting from the $32,000,000,000 5 year capital plan that is primarily centered around our U. S.
Utility businesses. Our near term priorities continue to be focused on funding this 5 year $32,000,000,000 base capital plan, strengthening the balance sheet and returning cash to shareholders. With regards to the sale of the 20% non controlling interest in Sempra Infrastructure, we are on track and still targeting to close the transaction in the coming weeks. Please turn to the next slide. This slide is a good depiction of how historically we've been able to grow our capital investments over time and how our capital plan has been predominantly centered around investments in our regulated U.
S. Utilities. Our historical capital deployment consistent with Sempra's strategy of focusing on what we believe are the most attractive markets in North America and investing in critical T and D infrastructure and have set up a strong foundation for future growth and earnings visibility. Please turn to the next slide. Since 2017, we've narrowed our strategic focus while also growing the business at the same time.
The key takeaways from this slide are that we've simplified our business mix by focusing on T and D infrastructure, focus our strategic footprint on attractive markets in North America, improve the visibility into future earnings, all while growing adjusted earnings by 19%. Today, we have 3 growth platforms in premium markets that are delivering strong financial results with nearly 80% of earnings coming from regulated utilities with no commodity or generation exposure. Please turn to the next slide. This is a great slide that shows that we have a strong track record of returning value to our shareholders and have increased our dividend over the past 11 consecutive years, growing it at a 9% CAGR over the past decade. As we look towards future dividend growth, we're targeting a 50% to 60% payout ratio as we believe this optimizes the balance between funding future growth in the businesses, while also continuing to return additional value to our shareholders and maintaining a strong balance sheet.
Please turn to the next slide. We've shown a version of this slide a few times now, it's important to highlight for you again our capital allocation priorities as we work to optimize our capital structure. Our number one priority continues to be investing capital towards safety, reliability and other ESG priorities at all operating companies. 2nd, we continue to prioritize investment in our U. S.
Utility businesses. As a reminder, approximately 90% of our 2021 to 2025 capital plan is projected to be spent at our U. S. Utilities and is primarily driven by a focus on safety, reliability and cleaner fuels. 3rd, we continue to strengthen the balance sheet.
The cash proceeds from the Sempra infrastructure transaction are expected to be used to further pay down Sempra parent debt as well as to fund future growth. The next priority is returning cash to our shareholders through our growing dividend and lastly, to invest in infrastructure growth projects that are backed by long term contracts with strong creditworthy counterparties. We believe this disciplined capital allocation approach will continue to support strong organic growth, enhanced earnings visibility, a strong balance sheet and competitive dividends in the future. Please turn to the next slide. As we look ahead, we feel very positive about the robust organic growth opportunities in front of us.
As you can see from this chart, our capital plans tend to be more heavily weighted to the beginning years of the plan. As we roll forward our 5 year capital plan from last year's Investor Day and added a year to the back end, it resulted in increases in every year of the plan period, even though the total $32,000,000,000 5 year capital plan is similar in size to our prior plan. In particular, there is roughly $1,500,000,000 of total incremental capital in 2021 2022 alone compared to the prior plan and $2,000,000,000 over the same 4 year period compared to the prior plan. This increased capital is primarily driven by incremental opportunities from our U. S.
Utility infrastructure businesses. When you compare this trajectory with the historical capital deployed that we showed a few slides ago, it really underscores the fact that there's opportunity for further increases, particularly in the outer years. Please turn to the next slide. Our U. S.
Utilities platform has robust future rate base growth projections. By 2025, we're projecting that the combined rate base across our U. S. Utilities will be nearly $56,000,000,000 with 70% coming from our electric utilities in California and Texas. Please turn to the next slide.
As I mentioned previously, we remain committed to continue strengthening our balance sheet. Since 2017, we've completed a series of transactions as part of our capital rotation strategy. And during that time, our total debt to capitalization has improved from approximately 55% to 49% at the end of 2020. We were able to accomplish this while continuing to grow earnings in each of the businesses and supporting a healthy and growing dividend. While I certainly understand that debt to cap is only one way to measure the strength of the balance sheet, We also saw our FFO to debt metric at 17% at the end of 2020.
We continue to see further balance sheet improvement potential with the Sempra infrastructure transactions as we're targeting to use a portion of the proceeds to pay down parent debt. Additionally, we continue to maintain strong investment grade credit ratings and are targeting a long term 16% FFO to debt ratio at the Sempra consolidated level. Please turn to the next slide. Looking at our high level sources and uses, we expect to generate strong projected operating cash flows of over $27,000,000,000 over the next 5 years. This cash inflow will be used to support the growing dividend and fund the capital plan.
I would also like to highlight that the current 5 year plan does not assume any new equity issuance to fund the base capital plan. Please turn to the next slide. As we think about the long term financing strategy for Sempra Infrastructure, it is underpinned by the strong operating cash flows generated by our infrastructure investments. These cash flows are underpinned by approximately 20 years of average contract life. Beyond operating cash flows, we'll continue to optimize our capital structure and consider financing solutions at both the project and partnership level.
Beyond traditional debt capital markets, private infrastructure capital continues to be an attractive source of financing. For instance, as we have done in the past with Cameron LNG, we would look to sell an equity interest in future development projects where and when it makes sense to do so. As we've articulated in the past, our counterparties at Cameron LNG are also our JV Equity Partners, which better aligns the interest of the project as well as offering a competitive financing solution. We'll continue to be prudent stewards of capital by raising capital efficiently to fund growth across the Sempra infrastructure platform. Please turn to the next slide.
When we embarked on the path of forming Sempra Infrastructure, the goal was to unlock additional shareholder value by simplifying our business model under 1 unified North American infrastructure platform, highlighting the value through the sale of a non controlling interest and funding future growth in Sempra's businesses at a lower cost of capital. Since we announced the transaction, we have seen some of the value show up in the sum of the parts valuation. While we did not expect the full value to be immediately recognized in our stock, it still shows that there is incremental value to be highlighted in the infrastructure franchise given its strong earnings potential and T and D like risk profile. Please turn to the next slide. On this slide, we presented the 2 year earnings guidance ranges in our typical fashion broken out by the various business segments across our 3 business platforms.
We continue to see robust earnings across our 3 businesses anchored by continued capital investments in our T and D infrastructure platforms. Additionally, I wanted to highlight why the total weighted average share count is increasing over the years presented. This is primarily driven by our completed Enova exchange offer as well as the Series B preferred stock converting in mid July this year that was part of the Encore acquisition financing. As a reminder, 2021 includes only half a year with these incremental common shares outstanding, whereas 2022 will include all of these additional shares outstanding for the full year. Please turn to the next slide.
As a result of our solid execution across our three business platforms, we're very pleased to be raising our 2021 adjusted EPS guidance range by $0.25 from $7.50 to $8.10 per share to $7.75 to $8.35 per share. The increase in our 2021 adjusted EPS guidance is primarily driven by stronger expected California and Texas utilities earnings from continued robust capital investments and operational efficiency. We're also introducing our 2022 EPS guidance range of $8.10 to $8.70 per share. I would note that both the revised 2021 adjusted EPS guidance range and the 2022 EPS guidance range do incorporate the effects of the Sempra infrastructure transactions. Please turn to the final slide.
As we conclude today's financial presentation, I'd like to remind you of our historical execution as well as the strong future projections across all three business platforms. Today, we've highlighted how we continue to refine our overall business mix, while being able to grow both adjusted earnings and EPS, provided visibility into our 2021 and 2022 earnings broken out by business segment as well as highlighted our robust capital plan for 2021 through 2025. And lastly, raised our adjusted EPS guidance for 2021 as a result of continued execution across our 3 business platforms. In summary, we feel very positive about where our business is headed and our ability to execute our financial plan. I will now like to turn the call over to Jeff to wrap up the prepared remarks with a closing video before we open up Q and A.
Thank you again for joining us today.
As we wrap up today's conference, I'd like to make a few concluding comments. At Sempra, we certainly understand that the global energy markets are undergoing dramatic change. On the one hand, we're facing the challenge of rising global CO2 emissions with potentially dire impacts to our environment. And on the other hand, there's a need to meet the rising demand for energy as economies all across the globe continue to expand. One of the key takeaways from this conference is that our business strategy is squarely focused on addressing both challenges, And we have the opportunity to do that by making critical investments in transmission and distribution infrastructure in what we believe are the most attractive markets in North America.
Let me explain why this is so important. Over long periods of time, utilities have historically experienced rates of growth similar to GDP. For example, over the last 10 20 year periods of time, the median adjusted EPS growth rate of U. S. Utilities has roughly matched GDP growth at 3% to 4%.
In contrast, Sempra has successfully grown its adjusted EPS over the same 10 20 year periods at approximately 7% to 8%. That's why owning leading franchises in markets like California and Texas, which have historically benefited from above average economic and demographic growth and thoughtful regulation is so important. By 2025, we're forecasting $56,000,000,000 of combined rate base in these two markets. We're also investing in critical infrastructure to help enable the energy transition and have a real impact on lowering CO2 emissions and we're doing this by focusing on innovation and technology. By allocating capital into what we believe is the lower risk portion of the value chain, we're limiting exposure to commodity and retail risk, while focusing more narrowly on investments that are expected to produce attractive risk adjusted returns.
Let me leave you, if you will, with 3 key takeaways. First, we're building a top tier T and D infrastructure franchise in what we believe are the most attractive markets in North America. And by doing so, we think we're very well positioned to succeed in the future under a variety of market conditions. And second, North should create new opportunities in energy infrastructure and beyond, and we believe our core competencies and portfolio synergies provide a real competitive advantage. And third, we believe our portfolio is well positioned to deliver strong financial results on a consistent basis going forward, all built on the foundation of the 3 business platforms that we discussed today.
So we're proud of our long term financial performance. We like the markets that we're in and how our portfolio is positioned. And taken together, these considerations cause us to have a lot of confidence in our ability to continue delivering long term value well into the future. And with that, I'll stop now and take your questions.
Our first question comes from Shar Pourreza with Guggenheim Partners.
Hey guys, good morning. How are you doing?
Good morning, Shahriar.
Jeff, can I just start at a high level and maybe ask you to elaborate on the sources and uses of funds? You have $2,000,000,000 to $3,000,000,000 of SIP proceeds for deployment. How do you sort of see the timing for that aside from sort of encore upsides? What opportunities do you see in the near term to maybe accretively deploy capital? And maybe how much are buybacks a part of the picture since the program is already Board approved, especially given where the stocks are trading or should we be thinking about only short term debt reduction investment capacity for future projects?
I appreciate the question, Shar. And this has been a topic that has had a lot of interest over the last couple of months. We're pleased to be able to talk about it today. I would direct you to Page 83 in Trevor's presentation and we list some of the key assumptions chart for our 5 year plan and it includes the expected accretion for this transaction, which we approximate at about $0.10 per year on average over a 4 year period. I would also note that the impacts of the integrated transactions forming separate infrastructure include the exchange offer and the minority sell down both of which are included in our EPS guidance.
But perhaps, Trevor, you could give us a little bit more detail in terms of how you think about the accretion and use of proceeds.
Sure. Thanks, Jeff. Good morning, Shar. So I think the best way to think about this is we initially expect to use a majority of the proceeds in paying down debt and this really creates capacity and we'll use that capacity to redeploy those dollars over time into utility CapEx over a 4 year period. And our presentation today really did cover some of those additional opportunities across the utilities.
This is really, I would say, similar to the convention that we used when we announced Encore, where we used an average accretion over a 4 year period. And we think the $0.10 on average is a reasonable forecast for this. I would say, we are very pleased to have a 4 year average accretion as a result of this transaction, where we were sourcing the lowest cost of capital. But what we're most excited about on this transaction is we've really accomplished the objectives we set out to and that's really to streamline the business, strengthen the balance sheet and highlight the value. But really I think if you step back and think about it, it's deploying those capital, those proceeds into utility capital over a period of time as we shrink the debt layer and then increase the capital into the utilities.
Got it. Thank you for that. And then just on the Texas side, how are you sort of thinking about the upcoming rate case? The guidance assumptions are still the 9.8% ROE and 42.5% equity layer. Is there kind of a desire from the PUCT staff to kind of bring all the utilities in line?
Or is there more of a case by case basis? And then just on a side note, have you guys had sort of any conversations with your partners, TTi, on rate case strategy? And is there any kind of desire on the Sempra side to consolidate ownership and perhaps maybe have a better value proposition with the next GRC?
I appreciate the question. Obviously, there's several questions embedded there, but I think maybe we'll take these, Sherry, Autumn, if you could. And I think I'll start Sharva talking about the rate case and after I do that and I know Alan will help me, we'll come back and maybe give you a little bit broader picture on the capital side, which I think will clear up some questions we saw from some of the early morning notes this morning. But I would start by saying that we were expecting to have a rate case filing at ENCORE later this fall. But as we mentioned in our prepared remarks with support from PUCT staff and the company's primary stakeholders and other interveners, Encore actually requested a new rate case filing date of June of next year, June of 2022 and we expect a ruling later this summer, which will be an important step for us.
But Alan, if you don't mind, would you just provide a little bit additional color on the rate case and then I'll come back and reframe the capital question for Shar.
You bet. Thanks, Jeff. Yes, Shar, so as Jeff said, we filed on May 10 a good cause exception to extend our rate case deadline filing. It is supported or not opposed by all the major stakeholders in our usually participate in our case. I think while we are waiting for a commission decision, which should come in the next few open meetings, So we'll have to wait and see.
I do think it's significant that it's not it is supported or not opposed by every major stakeholder as well as the fact on June 4, staff filed a recommendation in support of our motion. And then on June 24, the ALJ issued a proposed order agreeing to extend our deadline. So we'll wait and see what the commission does, but that's kind of where we are. And the reason we did it, there's been some question about that. Coming out of winter storm, Yuri, there's a lot going on, resource constraints around investigations and rulemaking.
So there's going to be a lot of rulemaking coming out of session. And then still getting the commission back up and running from logistically coming out of COVID. So it's got broad support and we'll see what the commission does, but that's where we are. I
appreciate it, Alan. And what I thought I would do, Shar, to go to the other questions you asked was, we certainly have a very constructive relationship with our partners both at GIC and Olmer's. Trevor and I sit on the board with Alan at On and certainly there's a lot of broad collaboration as we think about that rate case and future capital deployment. But the question you just asked is also tied to the prior question relating to potential accretion on Sempra infrastructure. And I thought it might be helpful for us to reframe, number 1, the year over year changes in our capital, which really sets up some new things that Alan has seen on his system.
Let's see if we can take those in tandem because I think that's what Vance are thinking charts. So Trevor, if you don't mind, let's just talk about the $32,000,000,000 capital plan from last year relative to this year and then let Alan elaborate on what he's seen in Texas.
Sure, absolutely. So again, Shar, as you know, last year we laid out a record $32,000,000,000 capital plan. And then in the 3rd quarter, Oncor increased their 5 year CapEx by $300,000,000 So then coming into this year, when we came back, we laid out a $32,000,000,000 capital plan, but that $32,000,000,000 capital plan given our planning convention, really is an increase of $2,000,000,000 over 4 years in the front end of the plan because we laid on a 5th year and the 5th year is substantially smaller than what the year that just rolled off is. So when you take a look at that in combination with what Alan also spoke about with other opportunities, we feel very positive about deploying capital into the utilities. Again, I think if you look at the forecasted $56,000,000,000 rate base, we believe this is a huge positive for us over a 5 year period.
So I'd give you 2 things to take away. 1 is the run rate is higher in the front end of the plan and 2, it's disproportionately allocated to the utilities. Alan, I'd let you kind of supplement anything on Encore.
Yes. Thanks, Trevor. I mean with regards to Encore, as I mentioned in my opening remarks, as you all recall, we raised our 5 year plan by about $300,000,000 in October. And what we're doing today in addition to that is we're forecasting what we're going to do is we're going to recommend to our Board at our July Board meeting an increase of $325,000,000 to $400,000,000 for 'twenty two alone. So that's an addition that will change our 'twenty two plan if it's approved by our Board from around $2,450,000,000 dollars to about between $2,775,000,000 and 2,850,000,000 time we ever did $2,000,000,000 in our company's history was in 2019, and we're already talking about doing potentially $2.85 next year.
You all know how we do our 5 year plan. We're doing this in July to try and get ahead, to try and make sure we have the resources. This changed for 'twenty two to try and make sure we have the resources and equipment lined up that we need in order to execute next year. With regards to those next 4 years that will be in our 5 year plan, we will take those up with our Board at a regular time in October. But what I can tell you is, based on what we're seeing now on our system and based on the really strong growth that I described in my opening statement, I can explain more if you'd like, It is not unrealistic to believe, and we believe that it is very possible that we'll see similar changes to those outer years in our 5 year plans or that we'll recommend similar changes to our Board in our October meeting, and we'll obviously have more information after that.
That's all subject to continuing to see this incredibly strong growth we're seeing, to continuing to identify these opportunities that we're presently seeing on our system, seeing what comes out of this legislative session with regard to hardening and resiliency and things like that, continuing to have a strong economy and getting board approval. So there's a lot of caveats there. But we strongly believe we need to make this change for 2022. That's why we're doing it in July. And we're going to be looking at the outer years in October, what we see some possibilities there as well.
Thanks, Trevor.
So Shar, I mean, I think to answer your questions, number 1, we think that the rate case will be shifted to June of 2022 and that's going to be obviously supported by the ALJ in Texas. Number 2, we've developed a broad working relationship with the folks at TTi. We obviously have a convention of not commenting on M and A type of activities, but there's been broad support by both owners relative to the capital plan. And I thought it was helpful to talk about not only how the capital within the $32,000,000,000 capital plan has been shifting toward utilities, which helps facilitate our use of proceeds from the Sempra infrastructure transaction. But probably just as importantly, the $32,000,000,000 capital plan is a little bit conservative just based on a lot of things we're seeing really in Texas as Alan outlined.
Terrific. Thank you guys. I'll jump back in the queue. Appreciate it.
Thanks a
lot, Shahriar.
Thanks, Shahriar.
Our next question comes from Durgesh Chopra with Evercore.
Hi, Durgesh.
Hey, good afternoon, Jeff. Thanks for taking my question.
No worries.
Just a few quick clarifications. Just on the FFO to debt, Trevor, the 16% FFO to debt, does that assume that you use $2,000,000,000 to $3,000,000,000 of those of the proceeds to pay down debt? I'm just trying to see you're at 17% at the end of 2020. And when you pay down whatever your commentary suggested you pay down debt first, build the balance sheet capacity, then replace it with CapEx. Trying to understand whether that 16% includes that debt pay down, yes or no?
Yes. I think, Dhigesh, that's just really a long term FFO to debt target that we've laid out in conjunction with the rating agencies around what we're forecasting for our current credit ratings. But generally, I would say it's all incorporated in the use of proceeds as we pay down debt and then deploy that over a period of time into capital. But the long term forecast is 16%.
And Durgesh, I would just supplement that just to say conceptually what happens is for a very short period of time, you're going to pay down parent debt, which thickens your equity layer and that creates the capacity to come back and unwind that equity layer as you start meeting higher CapEx needs in our utilities.
Understood. That makes sense. That makes a lot of sense. So you'll probably be under that 16% initially and then make your way to that 16%. Do I have that right?
Yes. I would just say, remember, we finished last year at 17% and the 16% is just a long term guidepost that we work on with the agencies. The actual FFO to debt will fluctuate from time to time, but I think the point Trevor is making is what we're going to do to pay down debt is a temporary issue. As you start to meet new CapEx needs, you'll unwind that additional equity layer to meet those needs.
Perfect. Thank you for explaining that. And then just my question and I'll jump back in the queue. Does the 9% overall rate base growth CAGR, does that include deployment of that $2,000,000,000 to $3,000,000,000 in excess proceeds? Or will that be would that $2,000,000,000 to $3,000,000,000 be excess of that 9% rate base
growth? If you're talking that would be in excess of that. In excess, okay, perfect.
That's what I thought I just wanted to clarify.
Yes, you've got a 10% CAGR across the Sempra California platform of rate based growth for 5 years. You've got a 7% CAGR of rate based growth across Encore. Collectively, it's a 9% growth rate and we're expecting to deploy the use of proceeds to meet incremental needs across the 4 year period that we've discussed.
Understood. Thanks so much guys. I'll jump back in the queue. Thank you.
Thank you.
Our next question comes from Steve Fleishman with Wolfe.
Good morning, Steve.
Yes. Hi. Can you hear me okay?
Yes, I can. Thank you.
Hey. So just I guess a couple strategic questions maybe first. Jeff, just on the as you look to the future, you may be one of only a couple remaining utilities that are not just pure utility companies, regulated utilities and have some kind of mix. And at least today, it still looks like you're not getting full credit for your infrastructure business. So just could you give a little flavor on how you're thinking about how you and the Board will be looking at that going forward if a year from now that's still the case?
Yes, sure. I appreciate the question and we've had this conversation before. I think I was with you at a fireside chat last fall and went through some of these discussion issues. And clearly, there's been a trend line over the last 12 to 18 months as people's strategic narrative have focused more on simplicity. But if you look at some of the transactions that have been announced, Steve, and you're closer to these than I am, you've seen utilities sell assets and reduce their EPS and you've seen some utilities sell assets, reduce their EPS and cut their dividend.
And across the last 3 years, we've done close to $30,000,000,000 of enterprise transactions, become very, very focused in terms of our business model. I think we're simpler today. We're leaner and more focused. And more importantly, I would argue that we're generating higher returns and delivering more capital back to our shareholders than we were even 3 years ago. So today, going back to your question of mix, roughly 50% of our earnings comes from our California utilities with the rest now being evenly split between Encore and Infrastructure.
And if you think back to 2018, Steve, our earnings primarily came from California and our international operations. So I think our takeaway is our business today generates a lot of portfolio synergies. This impacts how we manage risk and operational excellence. And I think our business today is better positioned in our peers to facilitate the energy transition. So as we've done in the past, I think we're not shy about making changes to the portfolio when it's needed.
It's a continuous process with our Board. We're very engaged. So as you indicated, we're certainly going to always come back and test what the portfolio and how it should be adjusted to create the most value. And as opportunities change, I think you can take a lot of confidence. We'll continue to adapt and adjust to that change as well.
Okay, that's helpful. And then I guess second strategic question is on the gas utility business in California. You highlighted a ton of different things that you're doing on technology and the like to look at whether it's RNG or hydrogen or related to provide cleaner version of gas. But just could you just talk about maybe your vision of what those businesses will be 10, 20 years out in California? Is it basically whatever the product is, we'll end up using your pipes essentially, whether it's gas, RNG, hydrogen or whatever else or some mix of it?
Yes, I would as a direct response to your question, I think you've seen particularly European utilities make great progress in their move toward green molecules. And I'll pull Kevin, if you don't mind, in to supplement my comment. But I'll give you one kind of high level thought, Steve, that will inform how we're thinking about this. You've followed our company for several decades. And you remember in the middle part of last decade, kind of that 2,005, 2,006 timeframe, Separate Energy was very much an energy company.
We had a combined cycle fleet in the west of about 3,000 megawatts. We had one of the largest commodity desks in the world. We're basically represented on five continents in the world. And since then, over the last decade, we've really matured the business and become much more focused as an infrastructure company. And one of the reasons today that we wanted to flag innovation, sustainability and leadership is by the middle of this decade, we plan to be a technology company.
And I don't mean a technology company in the classic sense, but as an infrastructure company, we think we can create an increased competitive advantage in terms of how we serve customers and how we can be safer and have better operations by making sure we're challenging ourselves with technology in every aspect of the value chain, right. So this goes to driving down your non fuel O and M cost. It goes to giving customers more choice in terms of the energy decisions that they make in their portfolio. So as you bring that back to California, we wanted to emphasize in today's materials, our commitment to be a leader around innovation and technology. And as you look at the evolution of the grid, there's no question that in the last 20 years, the United States has led every country in the world in the sharpest decline of carbon.
And that's been largely attributable to the fact that renewables has been such a big nationwide commitment and natural gas has supported those intermittent resources as you backed away from coal. So this idea that over time you can pursue the efficient frontier of renewables with batteries and natural gas and at the same time you continue to green natural gas. And I'll pass it to Kevin. And Kevin, I think it would be helpful as you think about discussing the role of green molecules in California's future. If you don't mind starting with the recent commission report on renewable natural gas.
Sure. Thanks for that, Jeff. And I think we're seeing just from a high level policy perspective, Steve, I think we're seeing broad recognition around the world really that the success of the energy transition depends significantly on the development of these clean molecules that Jeff was talking about and they really support the decarbonization of these more difficult to electrify sectors of the economy like industrial processes, manufacturing and heavy duty. And so as Jeff mentioned, first, I'm going to talk about renewable natural gas. We saw this bill in California SB 1440.
And we all know that methane from agriculture and organic waste is a really big contributor to climate change. Methane is somewhere between 20 to 80 times worse to put up in the atmosphere than CO2. So it's better to capture these streams and burn them. And so SoCalGas has set a bold voluntary goal of having 5% of its core gas be deliveries from RNG by 20 22 and 20% by 2,030 and we're well on our way to meeting those goals. And so again, as to SB 1440 in June, the PUC Energy Division staff issued a report recommending really a mandatory program for gas utilities for QRNG on behalf of their customers.
So this is really an RPS for RNG. And these levels are based on California statutory obligation to divert organic waste from landfills. And so by 2025, the staff report calls for the procurement of biomethane from organic waste equal to about 75% of the state's obligation, which is to divert this organic waste away from landfills. And that's about 5.5% of core load. And by 2,030, go to 100% of the obligation, which is about 12.5% of the core load.
So this is a really positive validation of the gas company's early commitment and support for growing an RNG market in this state. And we hope that the CPUC takes action soon based on the staff report. I'll just hydrogen really quickly too. I don't know if you want me to do that, Jeff, but we're really optimistic about hydrogen. So we see hydrogen coming behind and a little bit further out than this RNG.
But super excited about hydrogen and using these clean molecules to decarbonize these hard to electrify sectors. And I think you saw in our materials, we're working on a bunch of projects right now, kind of mostly pilot project in size, but hopefully lead to larger strategic investments in the area because as you know really scale matters in energy and before we start investing at scale, we want to do these smaller projects across the value chain to really better inform ourselves of where we should be investing on behalf of our customers in the future. So we've got a bunch of really exciting hydrogen projects going on, especially at the gas company, but also at SDG and E. And just going back to what Jeff was saying, you can look back and you can see that it's really going to be our gas and electric networks that kind of tie all this together, right? So in Europe, we're forecasting 70% to 80% of the existing pipeline system.
It's going to get used to distribute these clean molecules. And I think that will be true for our system. And our electric grid is going to play a big role as well because we need a lot of clean molecules and we're going to need clean electrons to make them all. So both sets of networks are going to
be have
a lot of opportunity in the future.
So Kevin, I appreciate that. And I think 2 comments here, Steve, as you can obviously hear Kevin's enthusiasm for the topic. But I would give you one last kind of concluding comment, which was you recall that obviously in Texas, it's a pure play T and D as Alan indicated. And in California, remember, we're decoupled, right? So we make money in the state by deploying capital into infrastructure where the natural gas demand goes up or down.
And one of the metaphors that I would always return to when we talk about this in our management team, Steve, is if you go back to 2012 or 2013, the most commonly talked about subject was the death spiral of the electric utility because rooftop solar is expected to take market share. And what we found out was what's unique about electricity is it's a derived fuel. It's not a primary fuel. And because it's just derived fuel, as we change the feedstock to lower carbon sources to create electricity, not only could it take market share relative to other areas, it can move into the transportation sector. So effectively, we determined that rooftop solar may take 15% of America's load, but it couldn't cover the other 85%.
And as you decarbonize electricity, it could compete favorably in transportation. So using that metaphor as people think about the natural gas infrastructure business, there's no question that the natural gas infrastructure both at the residential level and non core customers can be repurposed and is needed to take this exogenous methane out of the environment and repurpose it for a lower carbon purpose. And I think that infrastructure is going to be critical to making sure that clean electricity can work with clean molecules in the future. So we have a pretty robust business case around this.
Great. Thank you very much.
Thank you, Steve.
Our next question comes from Jeremy Tonet with JPMorgan.
Good morning, Jeremy.
Hi, good morning. Good morning. Thanks. Just wanted to touch base on the LNG strategy starting off if I could here. Just want to see if I heard it right with regards to Port Arthur right now.
Is it kind of pushed off or kind of the focus is really in other areas at this point, be it Cameron, further expansion there or even ECA and ECA Phase 2, I'm not sure if that came out. So just wondering how the overall LNG strategy is kind of focused today and how would you prioritize, I guess, those different opportunities?
Sure. Thank you for that question. I'll kick it off and I'll pass it to Justin to supplement my comments. But I think as we finish 2020, global capacity for LNG was running right around 350,000,000 tons per annum and most market watchers believe it will be closer to 550,000,000 tons per annum by the end of the decade. So we think the overall market size on a capacity standpoint has the opportunity to grow by about 50% and EIA expects that America's contribution to that capacity will double across this decade.
So I think the business case for LNG remains solid. As to our strategy, I would start by saying the ECA Phase 1 is our top priority. We've got about a $2,400,000,000 capital program to support that project, which we hope to turnkey into operation by the end of 2024. Lisa Glass is leading that project for Tanya and Justin and it remains on track and on budget. Secondly, in my comments over the last couple of years, I've always expressed optimism around Cameron expansion and the potentiality that it might leapfrog the actual sanction in a Port Arthur.
And earlier this year, I talked about that we did not expect Port Arthur to take FID this year. I would say that as we continue to be excited about Cameron on one hand on Port Arthur, what Justin indicated in his prepared remarks is we think we have the opportunity to go ahead today and make that project more competitive by evaluating design changes that could rely on electric drives for power and sourcing renewable sources of power for the plant. If we do that as we're targeting, we could expect to reduce emissions from that facility by about 60% to 65%. So we still remain bullish on the overall business case for Port Arthur, but clearly it's moved back in terms of the timeline. But I would just stop there and say we feel quite positive about the LNG strategy and business case.
But Justin, would you like to add anything about how you think about Port Arthur as a larger energy center some of the things you have under evaluation?
Yes. Thanks, Jeff. And so, Jeremy, yes, as Jeff mentioned, as we look at the LNG business and we look at our strategic objectives, again, we're going to be prudent stewards of our capital. And at Port Arthur, I think there's 3 things that I'm seeing. 1, as Jeff mentioned, the LNG market fundamentals over the long term are great.
We're seeing some short term headwinds in the long term contracted market. But we again, as we see the demand increase and supply reduce, we see some opportunities there. The other thing that I think we see exciting about Port Arthur and again, I was at the site a few weeks ago with our leadership team. It's a 3,000 acre site. It's got 3 miles of waterfront.
There isn't another site like this in North America. But one thing we're seeing that's interesting is we're being approached by others to look at the expansion side of that site. So this is in addition to the base LNG project for hydrogen production, carbon sequestration or other uses. So this has been a really interesting development and we think this is going to produce some new exciting opportunities. And in my prepared remarks, I talked about the Saudi Aramco agreements expiring, but what's interesting is, as Saudi Aramco reevaluates its priorities and you've probably read, they're looking at things like blue hydrogen and other opportunities, It is an area where we're completely aligned with them.
So we still think there's a lot to do with Saudi Aramco. Although these current agreements for the current LNG that was contemplated have expired, we see additional opportunities to work with them both in the LNG space, blue hydrogen or other opportunities. So we remain pretty excited about that relationship and expect it to come to fruition.
Got it. That's really helpful there. And then maybe rounding out the LNG side here. I believe there was a Polish contract at Port Arthur. Could that be moved over to Cameron?
Is that something that's possible there just to think about that? And I guess carbon capture was something you talked about there. And I was wondering if you might be able to provide a bit more thoughts on timeframe of if that were to be possible, what type of timeframe could that would that look like? And do you believe current 45Q economics are sufficient to develop carbon capture at this point? Or is more kind of policy needed from DC to move forward here?
Yes. Thanks, Jeremy. So yes, PGNIG, the Polish National Oil and Gas Company is a customer at Port Arthur. They have 2,000,000 tons per annum. And as we think about can they be moved to Cameron, if that's what makes sense, that's something we would contemplate.
We have not had those discussions with them, but it is something we exist to meet our customers' needs. And if our customers' needs can be better met at another facility, it's something that we'll look at. As to carbon sequestration, in the prepared remarks, I talked a little bit about Hackberry. This is carbon sequestration and storage around Cameron. What is important is not only can we capture the carbon associated with Cameron, it provides the base to capture other carbon from other LNG facilities or other industrial processes in that area.
So it's something we're really excited about. We're working with the partners. You should expect some news from us in the future. Timeframe, it's the permitting process is about a year and a half to 24 months and then construction is about another 2 years after that. So it's early stages there, but it is really exciting.
The other thing that the carbon sequestration and capture would allow us to do is to really use natural gas and carbon capture and sequestration to produce blue hydrogen, which is another exciting opportunity that you heard me previously talk about. On the 45Qs, again, as we look through the economics, this is part of the mix similar to our renewable business. You have both the tax credit and then you have some revenue. So as we think through that, that will definitely play a part in the economics as we look at this business.
Got it. And just one real last one, if I could, with regards to SiP Capital redeployment from the sale there. I guess, is there the potential that any of these dollars could find their way into buybacks or kind of encore kind of folding in the remaining interest there? Just trying to think of what's possible.
Yes. I think that as Trevor outlined, Jeremy, we're expecting in the near term to reduce our parent debt and then unwind that opportunity, that additional capacity to meet expected growth in utility CapEx. We've tried to outline that in some of our presentations. We've spoken a lot about how capital is moving forward in the plan and it's disproportionately focused on utility CapEx. So we think the highest likelihood that underpins our assumptions that we gave you today, which is both in our guidance and the $0.10 average that we provided you is the expectation that we'll unwind that on a pro rata basis across the 4 years to meet utility CapEx.
We are excited to have a $2,000,000,000 share repurchase program approved by the Board. It is not a programmatic share repurchase like you see other companies do. It's the type of thing we would use it on an opportunistic basis like we did last summer. But obviously there's no plans about that currently. Something that we would just monitor to the market on an as needed basis.
Got it. Thank you.
Thank you.
Our next question comes from Julien Dumoulin Smith with Bank of America.
[SPEAKER JULIEN
DUMOULIN SMITH:] Hi Julien. [SPEAKER JULIEN DUMOULIN SMITH:]
Hey, good afternoon team. Hey, or rather good morning to you guys. Thank you for the time. Perhaps just to clarify on some of the balance sheet questions thus far and just incremental CapEx. Can you elaborate a little bit?
I mean the plan seems to align with your FFO to debt metrics with the $32,000,000,000 capital plan. How do you think about funding incremental plans, whether they be utility or infrastructure oriented? Would that be incremental needs coming out of perhaps a sell down or further sell down in SIP? Just want to understand how to sort of baseline here on the balance sheet, if you don't mind in brief?
Yes, I'll take a shot at it, Julien and Trevor can support me if there's other additional information needed. But I would just say that we announced a record $32,000,000,000 capital program last year. This year, we were pleased to come back and reconfirm that we would execute on the roll forward 5 years at $32,000,000,000 But what's different is that the plan is disproportionately moved forward in the plan and it disproportionately favors utility CapEx relative to last year's plan. So we're seeing more utility CapEx in the $32,000,000,000 number 1. And number 2, we're seeing Alan signal today his willingness to go back to his Board in July to raise his CapEx for next year.
So he's looking at the potential of getting to about a $2,800,000,000 capital spend next year and the possibility that could be the new run rate on a going forward basis for him in years 2 through 5 as he rolls forward. That's not committed. That's subject to his Board's review in October. So I think you're hearing us say we have really good visibility to a plan that will deliver roughly $56,000,000,000 in rate base by the end of 2025. It will be disproportionately favoring our utilities instead of our unregulated businesses.
And when the great news is the unregulated business today for the first time in our company's history, we expect it to be self funded by its own balance sheet for the base plan. So in terms of using the $3,370,000,000 from the transaction, we expect to use that to initially pay down parent debt, while over time using that excess capacity to meet the incremental CapEx that we're expecting from our utilities, which I think we've been signaling quite strongly this morning.
Right. That incremental is in the 32 or above the 32, just to clarify. I know there's a couple of different definitions.
Yes. This question came up earlier today. It's in excess of the 32.
Right. Just making sure we heard that right. Excellent. And if I can, this is more of a strategic point rather than clarification. As I think about you versus your peers, not only have we seen sort of a strategic back to basics, if you will.
The other consideration here is about a 5 year or multi year earnings CAGR, if you will. And I understand, clearly you're providing some of the underlying utility rate based metrics, which should arguably provide for a decent line of sight on where at least the underlying earnings contributions from those segments should drive at. So if I can, can you elaborate a little bit on the sort of the bookends, if you will, on where this infrastructure business can go in terms of that missing piece and kind of solving for that longer term EPS trajectory? And what I'm really asking for is sort of what are the big pieces? What are the milestones here, whether they be in Mexico or frankly on the renewable side in terms of the exports or what have you?
What are those key pieces that could get you higher and lower, especially with an emphasis outside of LNG since we've talked about that at length already?
Right. So what I would probably go back to is, and you saw this in my video this morning, I've made the point several times now, Julian, that in general, GDP growth is a good proxy for utility growth. And GDP growth has averaged 3% to 4% over the last 20 years and EPS growth in our sector has been closer to 3%. So over a 20 year period of time, Sempra has been able to grow its EPS at a 7% CAGR. Over the last 10 years, we've been able to increase that to an 8% CAGR and just in the last 3 years, we've grown it at a 13% CAGR.
So to your point, I'd like to believe that you get great visibility to how we'll deploy capital in our utilities to reach that notional $56,000,000,000 of rate base. When you come back to the infrastructure business, which is the specific part of your question, obviously we're going to deploy about $2,600,000,000 of that $3,000,000,000 shown in the capital plan directly to Eco Phase 1 and expect to bring that online by the end of 2024. And you can back into that thinking about 60% to 70% gearing in that business and mid double digit type of equity returns. And then beyond that, the things you should be focused on is we've got a pretty aggressive renewable program where I think we've got a cost advantage. I think the wind resource is higher in Mexico than it is in California.
And obviously, it's an area of high quality solar radiation. So our ability to basically use our existing transmission lines that go across the border of Mexico into California and look at that 3,000 megawatts of renewable development is also something that we'll be tracking. But we feel good about all three of our platforms. And I think that I'd like to believe, Julien, that our past will be reflected in how we perform in the future.
No, indeed. If I can clarify on the renewable side, obviously California has authorized probably one of the largest procurements I've ever seen. Just what's the timeline on some of that 3 gigawatt opportunity?
Well, you should expect us to be active in all the current solicitations in the state. One of the things that was mentioned in Justin's presentation also is a very large battery project. So remember, we own a high voltage transmission line that comes into the eastern edge of San Diego County right there at the Ivy substation as well as one here in the closer to San Diego. And one of the opportunities is that TDM power plant that we own in Baja had a sister facility that we originally wanted to be built of 600 megawatts and we're not going to build another gas plant, but we do have the opportunity to site a 500 Megawatt battery plant. So we have the opportunity to firm up intermittent resources and wind and solar just over the border and use 2 different excess transmission lines where we've got additional capacity to dispatch here into California and the Southwest.
So I think Justin's team will be very disciplined and they'll be asked to execute their program on their own balance sheet, not Sempra's balance sheet. That was one of the goals of this transaction was to ensure that platform was self funded. So I think the key is to focus on is staying on track and on budget for ECA Phase 1, continue to make progress on executing Cameron expansion and they'd be very deliberate about the renewable and battery opportunities which sit adjacent to California.
Our next question comes from Michael Lapides with Goldman Sachs.
Actually, I have a couple and maybe the first one or 2 are for Trevor and then kind of a high level one for Jeff. Trevor, just curious, I'm looking at your slide on earnings by segment for 2021 2022. And if I look at the growth rate, so just take the midpoint of the guidance for 2022, let's say, the growth rate in the California utilities is like 4.5% from 2021 to 2022. And then I look at the growth rate, just using the midpoint of guidance, the Texas assumes a really big uptick in 2021 like 10%, but then only 6% in 2022. Kind of just walk me through the trajectories at the California and Texas utilities in terms of the net income guidance midpoints you're giving?
Yes. So Michael, there are a couple of things that are moving. And I think it also helps to take a look at 2020 when you're taking a look at the California utilities because in the California utilities in 2020, there was the tax memorandum account that we released as a result of a regulatory decision. But what we're seeing is as we continue to deploy capital into the utilities, there's a bit of a lag with regards to seeing that manifest itself into earnings. And so there's some of that that you need to take into consideration there.
And then same thing on the Texas utilities, given the DCRF and the TCAS tracker mechanisms, it takes a while for the capital deployment to appear into earnings. And so that's largely what's driving that. And then of course, in a lot of scenarios, there's a lot of small things that move things back and forth with regards to some operational efficiencies and other things. But largely, it's how you deploy capital and when it shows up into rates and earnings.
Got it. So in other words, the significant capital deployment in 2019 2020 in Texas is what drives the major step up in earnings in 2021. And then things kind of start to normalize a little bit in 2022. Is that kind of the right way to think about it?
Yes, I think that's fair.
Okay. But then the growth rate from 21 to 22 at the California utilities, just kind of ignoring 20 I'm not sure I followed why that's a pretty sizably low growth rate relative to the rate base growth. Is that just what happened in 2020 and it's going to take beyond 2021 for that to normalize?
Yes. I think one of the things is that you need to take into consideration there is the rate case and the impacts of the rate case that are going into effect at that point. So that all gets layered into our calculation of when we layer out the earnings projections.
Got it. And then Jeff, kind of a macro question. I mean, if I and some people have brought up the concept of kind of the back to basics trend that's playing out. And I even want to kind of go an out higher than that. If I just look at your equity price relative to the sector index for the last half decade, basically as a stock performed in line, do you think that A, Semper is an in line company or B, do you think the market, the public equity investment community for half a decade is kind of missing something?
And if so, what do you think that confusion could be in the investment community? And just curious for any thoughts, given how much change you've made to this company over the last 5 years?
Yes. Well, you mentioned the change and I certainly think, Michael, people would give us a little bit of credit for being willing to continue to challenge our portfolio. And obviously, it's not been a process of actually filling assets and smaller, it's been actually filling assets and improving our financial performance. And I've oftentimes thought back to that kind of February, March timeframe of last year, you recall, we were trading around $160 And I certainly think we're a more valuable business today than we were last year. But a couple of things in today's presentation, we talk about Sempra California and Sempra Texas being leading franchises in the best markets.
And I think over time, what you're seeing us do is recommit to our utilities. So within our portfolio, we've gotten shorter international and we've gotten shorter in California relative to other utility markets. And then within that portfolio, we're privileging utilities over the unregulated side, even taking the step in the last 4 or 5 months to make sure that our infrastructure business will be self funded away from Sempra's balance sheet. So on the Sempra infrastructure side, I think our next step is make sure we get it closed this summer, number 1. And number 2, Michael, bringing in that strategic partner to help us fund growth while continuing to recycle cash flows back to our utilities.
So I think we have a very good strategy. This has been an eternal question, not just for the last couple of years, but for the last couple of decades. And if you look at overall total shareholder return, which was captured in my video, I think over long periods of time, the market is efficient. It may not be efficient all the time every day. But I might conclude by saying that these businesses today, I believe, offer the investment community, number 1, relative safety.
3 years ago, our beta was closer to 0.85 or 0.9. Today, it's 0.65. These platforms also offer a sustainable dividend. We've grown the dividend at an average CAGR for the last decade of 9%. And I think the more you understand the macro story around North America and then you go into the detail of what's taken place in Texas, which Alan alluded to, plus California and Mexico, we think we're going to give investors the best exposure to the best infrastructure opportunities in the space.
So over time, I think this will continue to be revalued. I doubt you'll talk to any CEO in their industry, in our industry, Michael, that will think that they're undervalued, I mean overvalued, but I certainly think there's room for this business to be revalued. And I think the consensus today from the sell side is about $151 over a 12 month period.
Industry, has the market rerated gas utilities? There's been a little bit of a recovery, but go back 3 to 5 years ago, 7 years ago in terms of how they traded. Do you think gas utilities are undervalued or do you think gas utilities are structurally facing lower earnings profiles and bigger headwinds?
No, I actually think that they're being undervalued. So if you look at our most recent rate case, I mean, you're looking at an 11% or 12% rate base growth at Southern California Gas Company. So clearly, the need to invest for safety and invest for reliability is important. I think you've seen all of the utilities, this is true in Europe too, the natural gas utilities got rated down a little bit, Michael. They've come back in Europe.
I think Europe is a little bit ahead of the United States in terms of rating gas companies. So I feel quite confident that the gas businesses are being valued too low in the United States. I think Europe is a little bit ahead of us.
Got it. Thank you guys. Much appreciated.
Thank you, Michael. I think we've got room for 2 or 3 more questions.
Our next question comes from James Thalhofer with BMO Capital Markets.
Good morning, James.
James, your line is open and we are unable to hear you. Please check your mute function.
Thanks, Jeff.
Hi, Jay. My primary question had been sorry about that. My primary question has been answered, but I had just a couple of quick follow ups. I know that the transaction hasn't closed yet with the SIP monetization, but could you remind us how you guys are thinking about what the after tax proceeds are?
So what's most important is, I'll answer a couple of things was we wanted to simplify that business, strengthen the balance sheet, highlight value, make sure the business was self funded going forward. We raised about $3,370,000,000 at what we thought was lowest cost of capital and it's accretive. And on the tax issue, there will not be any taxes paid. All those proceeds are available to be reused because of the net operating loss carry forwards we have.
Yes. The only thing, Jeff, I would add to that is there is a little bit of California tax, of course, that wouldn't get shielded by the NOLs. But generally, we have sufficient NOLs to shield. So we will be in a nominal cash taxpaying position on that transaction through the next 3, 4 years.
The question I had and this is more just as I'm looking at the LNG earnings for 2022, I understand that that reflects the partial monetization, but how are you guys thinking, I guess, about development cost over the next couple of years relative to that business line?
Sure. I'll pass it on to Justin to talk about how you're thinking about development costs. I think they're relatively nominal, but Justin perhaps you can share your thinking on that.
Yes. Yes. James, I do think, as I said before, we will be prudent stewards of capital. We allocate our development cost to where we think we can get the best risk adjusted returns. And to be frank, we are fairly conservative on our development dollars.
So I would expect them to remain small and we'll invest where we see the opportunity for solid risk adjusted return.
And I would mention, it's in the numbers, it's in the materials today for you, James. So it's roughly $25,000,000 to $30,000,000 per year, but it's embedded in the materials we provided you today.
And our next question comes from Ryan Levine with Citi.
Thank you for taking my question. Appreciate the color on Hackberry and potentially utilizing Port Arthur for further development for CCUS. Taking a step back, I was hoping you'd be able to kind of highlight your broader strategy around carbon sequestration in the U. S. Gulf Coast?
Coast? I would just probably make the larger point that I said this in the strategy portion of today's conference. It is going to be a challenge for the world to double its GDP, increase population by 20% and meet net zero goals by 2,050. And we're going to do everything possible all across the globe to innovate. The IEA has indicated over 50% of the technology that's needed to be commercialized by 2,050 to get to net zero, it does not exist today.
And there's a growing recognition that carbon sequestration is going to be a big part of the solution. So this is not just a U. S. Issue, it's an issue in the Middle East. It's an issue in different parts of the world.
So we think it's going to have a role in the solution stack here in North America. And I think particularly a lot of the depleted ore reservoir and salt dome storage you'd see around the Gulf Coast makes the Gulf a unique place. And I would also add, Ryan, that America's largest manufacturing base is in California and America's largest industrial base is in Texas along the Gulf Coast. So when you think about those hard to decarbonize areas of our economy, We're going to need to have opportunities where we can basically sequester carbon. And I think making sure we can have that available here in California and just as importantly in the Gulf Coast will be very important.
So it's something that we're looking at on both the utility side and the non utility side of our business. And I think Justin's team inside of Sempra Infrastructure has a little bit of a head start and we feel pretty optimistic about it.
In Page 60, you had highlighted $2,300,000,000 of incremental opportunities, which included CCUS. Any sense of how material the carbon sequestration part is of this incremental investment opportunity that's highlighted?
Sure. I'll pass that to Justin.
Yes. Ryan, I think the carbon sequestration is a relatively small portion of that. The majority of that is associated with the Cameron expansion. So it's a relatively small amount. And I think what's important, as I mentioned in the prepared remarks, is there's an opportunity to not just reduce emissions or capture the carbon associated with Cameron.
It can lead to a business line that can capture carbon from other industrial uses and can potentially support the creation of blue hydrogen.
Thank you, Justin. And just to clarify for you, Ryan, in that number that you cited, the carbon sequestration number is roughly $200,000,000
Thank you. And then also in the prepared comments, there was mention of raising capital efficiently at SiP. Would that include potential minority asset sale stakes within the current portfolio or is that comment intended to be more related to LNG stake sale?
No. The comment I was trying to make is that when you look at the Sempra infrastructure set of transactions, it was effectively a way of raising equity, right? You issued Sempra equity to buy out the Enova equity and you're issuing Sempra Infrastructure Equity to KKR and we're doing that at about a 13 plus times EBITDA transaction and about 21 times PE. So for us to go raise capital to grow our utilities, this was the lowest cost of capital that was available to us And that's why we're referencing that as our way of funding our business going forward. So our 5 year base plan doesn't have any equity issuances in it.
And separate infrastructures played a very important role of helping us grow our utilities without issuing equity, right. So we feel very good about that transaction and how it supports our utility growth.
And then last question for me on Cameron Phase 2. How are you thinking about optimizing that portfolio or that opportunity? You think there was some mention of debottlenecking opportunities within existing Cameron assets or trains. Can you elaborate on what you're seeing there?
Sure. So today we've got about 12,000,000 tons per annum across three trains or approximately 4,000,000 tons per annum per train. And we think we have the opportunity under Justin's team with Lisa Glatch to add one train and increase the capacity by 50%. So imagine adding 6,000,000 or 7,000,000 tons of capacity with one train. Part of that is that 4th train will be the most optimized train that we've built at Cameron.
And the second part of that is we'll go back and improve the efficiency by debottlenecking Trains 1, 23. And I think it puts us in a position to have some of the lowest cost new capacity in the world in LNG.
Great. Thank you.
Appreciate it. It.
Thank you, Ryan.
And our next question comes from Craig Shere with Tuohy Brothers.
Hi, Craig. Thanks for including me.
Hi. I just wanted to dig a little more into some of the LNG questions. Could you discuss ECA Phase 2 prospects for resolution with regas off takers and finding pipeline access? Any prospects for additional Mexican LNG? And at this point, is it pretty evident that Cameron Phase 2 is your most likely next FID?
And to degree SIP is self funding, does that really ultimately limit the pace of FIDs just as much as offtake commitments do?
Yes, I'll make a couple of comments and pass it to Justin. Let me start with the funding issue. I think one of the goals of this transaction that we've made from the very beginning is that separate infrastructure will be self funded. So we're going to expect Justin and his team and Tanya to make sure they live within their own capital budgets based upon their existing cash flows. Now there are opportunities outside the base plan to do things.
They can always come back to Sempra to talk about, but they can also raise equity at the project level. So I think they're going to have ample access to the capital markets and other sources of fund to grow that business. They will not be constrained by access to capital. The second thing I would say is, I talked a little bit about the robustness of the LNG market. We think that the capacity globally doubles, not doubles, I apologize, increases by 50% between now and 2,030, but America's production and capacity doubles across this decade.
So there will be more opportunities coming to the United States and to clarify our priorities because Justin and I talk about them a lot is number 1 is to deliver ECA Phase 1 on time and on budget. That's a very critical $2,400,000,000 being deployed between now and the end of 2024. And secondly, they've got the opportunity to create real value at Cameron expansion. And then beyond that, we're certainly looking at opportunities at Port Arthur, ECO Phase 2 and there's some new opportunities in Mexico. And Justin, maybe you could just talk a little bit to Craig's question on ECO Phase 2 pipeline capacity and why Mexico has a lot of excess capacity that could be fortuitous for some of your other options in the country.
Yes. Thanks, Greg. Nice to hear from you again. Yes, as Jeff mentioned, our clear priority is really to bring ECA phase 1 online on time, on budget and safely. As we look to ECA phase 2, I think there's some interesting things.
And again, I think what you've seen us do and now talk about at Cameron Phase 2 is illustrative of that. So really, it's an optimization game. How can we best build an expansion that reduces the cost per unit of LNG and frankly in Mexico can also support economic growth in the Baja region in Mexico. So we're looking at some exciting things around that, some of which involves pipeline capacity and what is the best way to get pipeline capacity or new pipeline capacity to that project. As Jeff mentioned, there is a lot of excess pipeline transportation capacity in Mexico.
Some of that can frankly be used to create LNG exports. So we're looking at some other opportunities there that we're frankly very excited about and looking for opportunities to really align our interests with those of Mexico. So I think you'll see some exciting things coming out of the LNG business, both in Mexico and at Cameron and at Port Arthur.
Okay. Just to summarize, I guess, if you're not capital constrained given opportunities at SiP, given how tight LNG markets are starting to look, do you see potential in the next couple of years for perhaps
2 FIDs? Craig, what I would say is, we're going to number 1, we're going to deliver ECO Phase 1 on time, on budget. The project that we think we're really excited about because of its competitive advantage is Cameron expansion. And we're going to continue to optimize Port Arthur and Eco Phase 2 for opportunities. We're not going to forecast any FIDs at this point.
We're going to make sure that we're going to be very disciplined with our capital. It's not going to impact our utility story. Our utility story is the number one story inside of Sempra and we're going to make sure our balance sheet supports that story. And if there's opportunities, we're going to be very patient. We're going to be capital disciplined.
We're going to do the development that Justin talked about earlier at about $25,000,000 to $35,000,000 per year. And there will be other LNG opportunities and we're going to solve for that with capital discipline.
Great. Thank you.
Thank you very much.
And that concludes today's question and answer session. At this time, I would like to turn the conference back to Jeff Martin for any additional or closing remarks.
Look, I wanted to thank everyone. I mentioned this earlier. I know June is a busy month, so we really appreciate everyone taking the time to join us. Hope everyone stays safe and healthy and feel free to reach out per custom to our IR team with any follow-up questions. This concludes today's call.
And once again, this does conclude today's call. Thank you for your participation. You may now