Good day, and welcome to Sempra Energy Investor Day Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Faisal Khan. Please go ahead.
Good afternoon, and welcome to Sempra Energy's 2020 Virtual Investor Day. Due to the evolving situation with COVID-nineteen and in an abundance of caution for all of our stakeholders, we decided to change the format of our presentation to be strictly virtual. A live webcast of this teleconference and slide presentation is available on our website under the Investors section. We appreciate everyone's flexibility during this time and look forward to giving you a robust update of our business. Our strategic vision is delivering energy with purpose, which means ensuring the safe and reliable delivery of electricity and gas to our customers and communities.
Recognizing the world is going through an unprecedented time, not just in the economy, but even how we are all going about our daily lives. We believe our role is now more important than ever by keeping the lights on and providing further energy accessibility. We will continue to be an integral part of everyone's daily lives during this challenging period. Now let's move on to 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 filed with the SEC. It is important to know 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 a reconciliation to GAAP measures. I'd also like to mention that the forward looking statements contained in this presentation speak only as of today, March 24, 2020, and the company does not assume any obligation to update or revise any of these forward looking statements in the future.
With that, let's briefly review today's agenda. We'll first hear from our Chairman and Chief Executive Officer, Jeff Martin, on how we're addressing the risks associated with COVID-nineteen, followed by an overview of the strategy and vision of our company. We'll then hear from our Vice President of Communications and Sustainability, Lisa Alexander, on our sustainable business practices. Next, we'll dive into the utility presentations for San Diego Gas and Electric, Encore and Southern California Gas Company. Afterwards, we'll go through our infrastructure presentations on LNG and Sempra Mexico.
Following this, we'll hear from Trevor Mychajluk, Executive Vice President and Chief Financial Officer, who will present the financial section. And after that, we'll open it up to Q and A with the entire executive leadership team. With that, let me hand the call over to Jeff.
Thanks a lot, Faisal. At Sempra, we believe that what we do matters. Our country is facing an unprecedented health crisis. That's why I want to start by saying that our hearts go out to everyone that has been impacted by this ongoing pandemic, and we understand that we have an important role to play. So let me share our approach to protecting our employees and building resiliency into how we serve others.
I'll make 3 quick points. 1st, I want to echo Faisal's comments and welcome everyone to our investor conference. Over the last several weeks, many of you reached out to me directly and our Investor Relations team with ideas on how to improve the safety of our conference. In response, we canceled our plans to host many of you here in San Diego and moved to a webcast only format. So thank you for expressing your concerns and your ideas.
We're always open to new and better ways to do things. 2nd, as a California based company, we've prepared in-depth for many years to manage our business effectively through a variety of emergency situations. On this slide, we've outlined a series of steps that we've taken: number 1, to activate an enterprise wide emergency task force number 2, to revise our operating protocols to limit employee exposure and third party access to our facilities, while ensuring safe uninterrupted service to our customers. Number 3, drawn on top level medical expertise to make fact based decisions to support health and safety in our communities and stayed closely integrated with federal, state and local officials to ensure strong alignment in serving the public interest. And finally, we're communicating broadly with our employees and stakeholders.
As a company, we understand and have a deep commitment to our mission in society. Every day, the Sempra family of companies serves the basic energy needs of over 40,000,000 consumers. In fact, we serve more Americans every day than any other company in our industry. But remember too, all across California and Texas, we serve urgent care centers, public and private hospitals and primary care facilities. The same is true in Mexico, Peru and Chile.
That's why part of our emergency preparedness includes close coordination with our health care system operators to ensure we're prepared in every way possible to support those on the front line of defending our customers' health and well-being. So as we turn to today's conference, many of these same themes will be addressed in greater detail with a view toward inspiring confidence in our ability to execute through a variety of market cycles. These themes include our commitment to build safety and resiliency into our infrastructure model, our commitment to build a high performing culture, our commitment to being mission focused and values led and our commitment to deliver compelling long term shareholder value to you, our owners. And with those themes in mind, our success starts with having a defined and clear strategy. Please turn to the next slide.
Here at SIPRA Energy, we believe that the global energy ecosystem is going to change fairly dramatically over the next 30 years. In advanced economies, change will come in the form of innovation and technology that improves energy efficiency and supports a shift toward renewables and natural gas. The challenge will be different in developing nations where over 80% of incremental global electricity demand is forecasted. Here, improving energy diversity will be the central effort as renewables and natural gas again take market share and displace higher carbon forms of energy. It's against this backdrop that innovative companies with a compelling value proposition, focused on solving energy challenges market by market, will have a competitive advantage.
This long term view of the energy transition and the opportunities we expect along the way is central to how we've developed our overall business strategy. By investing in our infrastructure platforms right here in North America, we can improve the energy systems that serve our local communities, while also exporting LNG to global markets. This approach creates jobs and economic growth here at home, improves our trade balances and provides a cleaner fuel alternative to the world. So here are the key elements of our strategy. We're positioning our business squarely in the most attractive markets in North America, investing in the section of the energy value chain that optimizes our risk adjusted returns, launching a utility driven $32,000,000,000 5 year capital program, maintaining our liquidity and balance sheet strength to execute our plan over a variety of market conditions delivering unique visibility to expected sustainable earnings per share growth and leading the energy transition through safe and sustainable business practices and a firm commitment to our strategic initiative, which we call people, priorities and culture.
I'll provide additional details on each of these items later in my presentation. As you'll recall, our mission at Sempra Energy is quite clear. We're building North America's premier energy infrastructure company. And to support that mission, we substantially changed the composition of our business mix since 2017. Let's review our progress.
From 2017 to 2019, we grew our U. S. Utility footprint by acquiring a majority interest in Encore and followed on with Encore's acquisition of InfraREIT, all in combination diversifying our U. S. Utility business into the high growth Texas market and boosting our adjusted earnings growth by about 1.4x.
As we closed out last year, our California and Texas utilities comprised approximately 58% and about 21% of total adjusted earnings, respectively. Looking forward, we expect to close the sales process of our South American businesses in the next 3 to 6 weeks and longer term project all of our 2021 earnings to come from North America with 75% from our U. S. Utilities and 25% from our infrastructure businesses. This should result in consolidated earnings for 2021 that are expected to be roughly 1.8x higher than the adjusted earnings in 2017.
By taking steps to optimize our business mix, we have effectively re centered our strategy on strong regulated utilities in California and Texas and significantly improve the quality and growth profile of our earnings. On this slide, the key takeaway is how well positioned we are in what we think are the strongest markets in North America. In fact, if you add together the economies of California, Texas and Mexico, it would be the 3rd largest economy in the world. So with the pending sale of our South American companies, we will be reducing our geographic footprint, while further improving the quality and strength of our earnings. Market?
I'd like to point to 5 considerations: large robust economies above average GDP growth constructive regulatory environments, strong demographics and realizable portfolio synergies. California, Texas and Mexico check all these boxes, and we have a Tier 1 leadership position in each of these core markets. Bottom line, we position our portfolio where we think we can have the most success over the long term. I briefly touched on the energy transition earlier. So in addition to improving safety and reliability, our strategy also calls for us to create value for a broader group of stakeholders by enabling the delivery of low carbon energy, delivering 0 emission energy that's generated by others through our T and D infrastructure, delivering affordable natural gas through our transportation systems, which when used in power generation supports additional renewable energy penetration and investing in LNG infrastructure that helps displace higher carbon fuels around the world.
At Sempra, our employees are laser focused on our mission and understand that we can grow and improve earnings while also striving to serve the public interest here in North America and abroad. We've shown a version of this slide in previous presentations, but it's important and worth highlighting again. Within the energy value chain, we're strategically focused on investments that produce the most attractive risk adjusted returns. That means we're focused on building smart new energy infrastructure with a transmission and distribution like risk profile. Notably, this limits commodity and retail risk while improving the certainty of our financial performance.
Please move to the next slide. There are a couple of key points on this slide. We're fortunate to have both scale and leadership positions in contiguous growth markets. These markets are ones that we know well and understand and where we have built valuable relationships with stakeholders over a long period of time. Bottom line, in combination, these factors give us a lot of confidence in delivering our 5 year capital program because we're focused on markets where we have a competitive advantage.
Please turn to the next slide. Last March, at our Investor Day, we introduced our refreshed vision, mission and values, which are directly aligned with broader ESG goals and our strategic initiative around people, priorities and culture. This slide organizes some of our accomplishments under 3 categories: environmental stewardship, safety and stakeholders and responsible governance. I won't touch on every bullet, but the key takeaway is that we've been long standing pioneers on the ESG front, and we think it adds to our company's overall business resiliency and our ability to create long term value. Lisa Alexander will go into greater detail on our priorities in this area, but you should know that our work here reflects my commitment as the CEO of the company and that we will look to assert ESG leadership in every market we serve.
You've heard me mention our strategic initiative, which is focused on people, priorities and culture. Let me tell you what it means to us. First, the foundation of our company is our employees. At Sempra, everyone counts. That's why it's important that we attract, develop, reward, inspire and retain the best employees in the industry.
We've set up a best in class human energy program to do just that, and we're already seeing it pay dividends through record setting employee engagement results just last year. 2nd, we've set very clear priorities centered on safety, capital discipline, technology and innovation. Through the active involvement of our leadership team, these priorities are roundly discussed and then pulled throughout the organization. The result is clear and transparent objectives being executed by hyper aligned organization. 3rd, we've invested time and energy into building a high performing culture.
This was done by clearly laying out and communicating our refined vision, mission and values. In doing so, we've created a culture where employees have a clear understanding of our strategy and just as importantly, a clear understanding of their role in advancing that strategy. The result is a purpose driven organization comprised of 20,000 employees that are engaged to deliver our priorities. Let's turn to the next slide and I'll conclude my remarks. I talked earlier about how we expect the energy markets to change in the future.
In part, that long term perspective has informed today's business strategy. As we look to complete our capital recycling program, we believe our North American portfolio gives us the strength and flexibility to be successful in a variety of market conditions. Compared to other peers, our company offers an attractive value proposition. In times of uncertainty, whether it's the current or a future market, having a clear strategy makes a difference, but it doesn't stop there. We also have a strong leadership team, a remarkable group of talented employees, and we're committed to executing on our financial and operational targets, all while maintaining a disciplined focus on long term value creation.
Again, we very much appreciate your participation on this call during a very challenging time, and I'll be available for Q and A at the end of the call. I'd now like to turn it over to Lisa, who will discuss our sustainable business practices.
Thanks, Jeff, and good afternoon, everyone. Over the past year, we've had a number of conversations with many of you regarding ESG. In response to your interest, today I'm pleased to provide a brief presentation about how Sempra is driving resilient operations and sustainable long term value by actively managing environmental, social and governance factors. Let's start with the definition. Fundamentally, ESG is the identification and management of non financial material risks and opportunities that influence business performance.
These are factors that one can't derive from balance sheets or fundamentals analysis alone. In our company, those factors include safety, diversity, cybersecurity, incentive compensation, greenhouse gas emissions, to name a few. When we're exceptional at managing these factors, you see differentiated performance. It's about delivering outstanding results year after year. As examples, consider SDG and E's FireSafe 3.0 program, SoCalGas' Renewable Gas and Green Hydrogen strategy, Oncor's vegetation management approach, EONOVA's management diversity.
Earlier, Jeff shared Sempra's response to the coronavirus. What you need to know is that our response is an expression of Sempra's deep, competent, managing environmental, social and governance factors. Our proactive integrated response is not an accident. At Sempra, ESG is a deeply held practice of actively managing the risks and opportunities that drive resilient operations and sustainable long term value. It's not about publicity.
It's about building a strong enterprise and delivering for all stakeholders, including shareholders. I want to be clear that our ESG strategy and position is differentiated and strong. We're the only U. S. Utility company on the Dow Jones Sustainability World Index and we're included on 200 indices, including ESG and sustainability oriented portfolios.
We outperformed the sector on MSCI, CDP and a number of Sustainalytics categories. And our leadership is recognized by Fortune, Forbes, Barron's, Investors Business Daily and a number of other key ESG lists. But what's really important to understand is why we have this leadership position. It starts with our origins in the regulated utility business, where the business model itself demands a multi stakeholder view, accountability, transparency, strong safety SIP focus. Think the general rate case process, it's a great example.
Then consider that our origins are as a California regulated utility business. Sempra has grown in an environment that's significantly forward thinking in areas including safety, energy efficiency, diversity and climate resilience. For decades, we've been operating with these views in mind. We've made managing ESG risks and opportunities part of our business processes, our governance, our culture. ESG isn't exogenous.
It's part of who Sempra is. It's what elevates and unites our companies. Throughout today, you're going to see how our experienced and differentiated capability in anticipating and managing risks enhances value. Case in point is environmental stewardship. Our strategy is to invest in T and D like energy infrastructure in the most attractive markets in North America.
In every market we operate, our energy infrastructure is reducing the carbon footprint of energy systems. In Mexico, our natural gas pipelines and renewables projects are enabling access to reliable energy, while displacing fuel oil and coal for electric generation. In California, SoCalGas and SDG and E are leading the nation in reducing the carbon footprint of the energy system, with SoCalGas' voluntary commitment to deliver 20% renewable gas by 2,030 and SDG and E's plan to deliver 100% renewable electricity by 2,045. In Texas, Oncor's infrastructure is connecting enormous amounts of wind energy to demand centers. As you'll hear in Alan's presentation, there are 24,000 megawatts of installed wind capacity in ERCOT and over 100 gigawatts of renewable projects under review.
And our LNG liquefaction infrastructure can help offset fuel oil and coal in critical and fast growing energy markets around the world. What's really important to know is that our business strategy underpins the energy transition in the markets we serve. When you think about long term sustainable value creation, this couldn't matter more. As I said earlier, our business performance starts with safety and we deliver on that through an integrated approach that includes technology, innovation and leadership. In our operating company presentations, you'll see how in each of our businesses, we're using integrated technology led programs to mitigate risks and drive opportunities.
I also want to highlight that stakeholder engagement is a key component of this approach, and we're very proud to have earned constructive relationships with the people who count on us. We strive to manage the external environment rather than letting the environment happen to us. I want to emphasize that we're bringing this approach to address coronavirus. Think back to Jeff's earlier remarks about Sempra's coronavirus response. Holistic perspective on risk, using data and world class analytics tools, listening carefully to our stakeholders.
We're bringing our expertise and competence to an unprecedented contemporary crisis. Let's now look at the governance systems we have in place that focus on managing risks and driving opportunities. What I'd like to emphasize is our high performance culture. It's anchored by Sempra's vision, mission and values. Our values are shared across our operating companies and our vision and mission create alignment and cohesion around our strategic objectives.
This is critical. It's critical because it helps us be resilient and act with agility as an enterprise. Our high performance culture helps us adapt and focus on the right thing. It enables predictable business outcomes and strong performance. Look, in conclusion, we're pleased to be a recognized industry leader in ESG.
That means we're a leader in managing risks and opportunities that drive superior performance and predictable outcomes. We're a leader because it's been in our DNA for decades and you can see that competency shine through across our operating companies with our current coronavirus response and SDG and E's wild fire program as examples. And we're going to continue to be a leader because our business strategy and business model are in alignment with the increasing expectations of our stakeholders on issues of environmental stewardship, safety and stakeholder engagement and governance. As a result of this, you can expect us to continue to outperform our sector on ESG. You can expect us to continue to be transparent in how we manage key risks and drive opportunities.
And by extension, you can have confidence in our differentiated delivery capability and the strength of our businesses' resilient operations and sustainable long term value. Thanks very much for the interest you've had in this area and our conversations over the past year. Next, I'd like to introduce Kevin Segarra to walk through what we're doing at SDG and E.
Thank you, Lisa. Before I start, I want to briefly talk about what we're doing at SDG and E in response to the coronavirus. As Jeff mentioned earlier, the safety and well-being of our employees and customers is always our top priority across the Sempra family of companies. As an operational company, SDG and E provides critical services to customers and communities we serve that depend on our electric and gas service every day. With that in mind, we've assembled an executive and director pandemic team operating through an incident command structure and have taken a number of actions to reduce risks and mitigate impacts such as physically separating critical operations groups such as our call centers and switching centers.
Groups like these have split their workforces and are working in different locations. Suspending all service disconnections to keep the lights on for our customers, postponing all non critical planned outages and moving forward only with outages related to public safety, emergencies and wildfire mitigation. I'm proud of how the team at SDG and E has responded to this situation and how it continues to provide safe and reliable service to our customers and communities. Our mission at SDG and E is to improve lives and communities by building the cleanest, safest and most reliable energy infrastructure company in America. This mission is intentionally aligned with Sempra's mission as well as with the policies and priorities of the state.
As we go through this presentation, I'll highlight these 3 key themes. 1st, we received a constructive rate case decision reflecting our alignment with state policy around safety and reliability. 2nd, the continued advancement of our award winning wildfire mitigation program. It's too bad we can't get you out here today, but we'll work with IR to reschedule the tour when the time is right. And lastly, I'd like to remind you that the state's progressive clean energy goals will provide for future investment opportunities in SDG and E service territory.
2019 was a great year for SDG and E and really sets the stage for the future. Let's take a look. Constructive legislative and regulatory decisions substantially improve the regulatory model in California. First, we secured critical wildfire legislation establishing a prudency standard and liability cap that mitigate shareholder exposure. 2nd, we received a constructive GRC decision, which provides strong visibility into our 5 year capital plan.
And third, we secured a final cost of capital decision at the CPUC and an all party settlement at the FERC. We also had big wins and successes in advancing our mission. Our number one goal is to keep our community safe. There have been no major utility caused wildfires in our service territory over the past 12 years. And on this front, we're continuing to innovate and evolve every single day.
In terms of reliability, we are proud to continue our leadership position as the most reliable electric utility in the West for over 14 consecutive years. Lastly, our T and D infrastructure and investments help to advance the state's clean energy policies, integrating more renewables and supporting the proliferation of electric vehicles. And in this context with different outcomes, it was great to have the governor acknowledge SDG and E is one of the nation's best run utilities. We're really proud of that. The policy drivers that support our business strategy fall into 3 main categories.
Safety and operational excellence, which is always our focus and drives investment in improving the overall safety and reliability of our system. Decarbonization, California's clean energy policies will drive investments in electric vehicle infrastructure, energy storage and grid modernization. And customer choice, which enables us to move away from a utility centric supply model. I'll remind you that in California, utilities don't earn on the sale of electricity and natural gas. We essentially have a T and D model with no exposure to volume and commodity prices.
Safety and operational excellence continue to be at the forefront, providing ample opportunity for investment in wildfire risk mitigation, pipeline safety and reliability enhancements. Over 80% of our capital plan, the largest capital plan in SDG and E's history is being deployed to enhance safety, reliability and mitigate wildfire risk, investments which are directly in line with the priorities of the state. Nearly all of our 5 year capital plan is what you call our base business and our bread and butter business of providing safe and reliable service to our customers. You can see from the graph on the right that we're forecasting strong rate base growth of 9% over the 5 year plan. On top of that, we have much greater visibility in this 5 year plan than in the past given the recent rate case decision that runs through 2023.
For our project spotlight, I wanted to talk about how we are continuing to advance our industry leading wildfire mitigation program. Many of you visited our San Diego office last year for an overview of the wildfire mitigation program in which we have now invested more than $2,000,000,000 over the past 10 years. This has been a journey for SDG and E and we've labeled our program FireSafe 3.0 to demonstrate how we've continued to evolve, iterate and innovate a lot of our mitigation strategies. We first initiated our FireSafe program back in 2007. We set the foundation by deploying the most highly concentrated network of weather stations with over 100 cameras and establishing a meteorology team, which we recognized was critical to analyze weather patterns.
We're very proud of the advances we've made in enhancing our operational capabilities through our modeling tools, daily alerts and fire hardening program. This culminated with SDG and E receiving the National 2018 Edison Award, the industry's most prestigious and coveted honor for greater resiliency and fire preparedness. Now we're focused on the next generation of innovations to continue to advance wildfire safety. We are very excited about our fire science and innovation lab. Through this effort, we are partnering with academia, government and public safety professionals to create forward looking solutions to help prevent ignitions, mitigate the impacts of wildfires and ultimately help build a more resilient region.
Here are some of our innovations: maximizing artificial intelligence and machine learning to improve situational awareness implementing a new vegetation risk index to help us better quantify the risk associated with different species of vegetation along high fire risk areas and developing satellite enabled wildfire alerts to identify and track wildfire activity from satellites in space, providing more precise wildfire location information. A new Wildfire Safety Community Advisory Council has been formed as a group of diverse local leaders, including the San Diego Office of Emergency Services, First Responders, Nonprofit and Academic Organizations. The council will provide feedback and recommendations on how SDG and E can continue to help protect the region from wildfires. But we aren't stopping here. This is a continuous process of innovation and improvement.
This slide highlights some new wildfire mitigation innovations, all of which are already in flight. These innovations center around continuing our commitment to harden our infrastructure against extreme weather conditions, improving our data analytics and situational capabilities and enhancing the way we communicate and engage with the communities we serve. Let's look at a couple of these. As part
of our
infrastructure strategy, we're incorporating a new circuit based approach to our system hardening in the high fire threat district that aims to reduce both the risk of wildfires and the number of customers impacted by public safety power shutoffs. We're also leveraging new technology. One that's really exciting is our falling conductor protection, which can detect and cut off power to a falling power line before it hits the ground, thereby helping avoid a possible ignition. Our customer strategy is focused on implementing wildfire mitigation solutions to help reduce ignition potential and keep critical facilities and customers energized during public safety power shutoffs or PSPS events. Key initiatives include providing backup generators for vulnerable customers, targeted emergency alerts to ensure customers are not surprised and are provided with advanced notification and partnering with community based organizations.
To this end, we have a goal of reducing public safety power shutoff impacts by 25% this year. So far, we've talked about safety and reliability opportunities. We feel there is a second tailwind in long term growth opportunity associated with California and its clean energy policies. We're committed to achieving the state's rigorous RPS goals and GHG emissions reduction targets. In order to achieve these goals, we must invest in a modern grid to integrate more renewables and energy storage as well as support the proliferation of electric vehicles.
As you know, the transportation sector is the largest source of GHG emissions in the state. In San Diego, the GHG emissions are even higher with over 50% attributed to transportation. In order to achieve the state's policy goals, there must be a transition to electric vehicles. California has a goal of 5,000,000 electric vehicles in the state by 2,030, which translates into 500,000 in San Diego. The CPUC has already authorized SDG and E to implement a number of electric vehicle charging infrastructure projects.
We see this as an opportunity to increase overall system utilization and the value proposition of our T and D system. At SDG and E, we have a culture of continuous innovation and improvement with everything we do from our wildfire mitigation programs to our mission of building the cleanest, safest, most reliable energy infrastructure company in America. Given our robust capital program and 5 year GRC, we're going to remain hyper focused on execution, delivering strong rate based growth and strong future earnings. So with that, I'll conclude and turn it over to Alan Nye, the CEO of Encore. Be safe everyone.
Good afternoon. It's a pleasure to be with you today, albeit under very difficult circumstances. Once again, I'm excited to share the Oncor story you all. But first, I'd like to start off by taking a moment to thank the men and women of ENCORE, who over the past few weeks have taken extraordinary measures to both combat the spread of the coronavirus and ensure the continuity of our operations. Thanks to the hard work and dedication of each of our 4,000 employees, Oncor will continue to provide the safe, reliable, affordable electric service that our customers expect.
When the coronavirus started to spread, Encore activated its pandemic response plan. That plan is now in full effect. On March 13, Encore employees who have the ability to work from home were instructed to do so indefinitely. We're also taking additional precautions to ensure the safety and well-being of our employees in the field. They are going above and beyond the call of duty to continue to serve our customers, and I'm so grateful for their hard work and dedication.
The coronavirus is presenting a number of challenges in Texas, but our federal, state and local officials are united in the response. Oncor is proud to do our part in this process and ensure that hospitals, first responders, emergency workers, nursing homes and other critical infrastructure continue to receive reliable electric service. We are prepared to help Texas through this trying time and together, we will come through this stronger and more unified. With approximately 140,000 miles of combined transmission and distribution lines and over 1100 substations, Encore is the largest electric utility in Texas and the largest pure play wires company in The Encore service territory encompasses approximately 54,000 square miles stretching from the Red River down to just north of Austin and from the Piney Woods of East Texas all the way west to Midland Odessa and much of the Permian and Delaware Basins. In summary, we provide safe, reliable and affordable electric service, have a strong visible and diverse growth profile, which drives a record CapEx plan, which should result in strong earnings and strong earnings growth, supported by a constructive regulatory environment in a pro business state.
From a liquidity standpoint, Encore is in a very strong position. We have a $2,000,000,000 revolving credit facility, which also supports our commercial paper program. At Twelvethirty Onetwenty 19, we had approximately $1,944,000,000 available to be drawn on the facility or used for commercial paper issuances and have slightly more available now due to our decreased commercial paper balance. In addition, as you would have seen this past Friday, we issued $800,000,000 worth of new senior secured notes. We believe we have plenty of liquidity to fund our operations, capital program and all maturities for some time even if we cannot access the capital markets.
As you have all seen over the past few weeks, there have been significant disruptions in the financial and energy markets, both here in the United States and abroad. It is important for all of you to know that at Encore, we build our business around long term generational growth, investing in long live electric infrastructure assets. While there may be some disruption in the near term, we are very bullish on the long term prospects of our business and the long term growth across our service territory. Slide 3 highlights some of our major accomplishments from 2019. 2019 was a very busy and productive year at Encore.
We invested more than $2,100,000,000 in our system, a record for Encore. In addition to our unprecedented CapEx spend, we purchased our 1st publicly traded company, Infarete, and successfully integrated 1575 miles of transmission lines and 46 substations into our system. We constructed 1100 miles of new transmission and distribution lines and connected a near record 73,681 authorized locations. We had record earnings of $651,000,000 we improved reliability by over 6% and we completed a successful legislative session that was highlighted by SB 1938, a piece of legislation that was passed with overwhelming bipartisan support in both the Texas House and the Texas Senate and signed by Governor Greg Abbott in May of last year. SB 1938 is significant because it codifies the existing ERCOT transmission planning protocols based on endpoint ownership into law.
As I previously mentioned, Encore owns and operates more than 1100 endpoints more than any other utility in the state, which makes us well positioned to capture transmission growth moving forward. Thanks in large part the pro business and pro growth environment we mentioned earlier, the Encore service territory offers 1 of the strongest growth profiles anywhere in North America, and Encore is in a premier position to serve and capitalize on that growth. For example, Texas is growing and used to be the largest growing metropolitan area in the Oncor serves 3 of the top 10 fastest growing counties in the U. S, 6 of the top fastest growing cities in the U. S, and 3 of the top 10 fastest growing metro areas.
The leading demographic growth across the state is driving record growth across the Encore service territory. System wide, we continue to see 2% premise growth. As previously mentioned, we came close to topping our 2018 record for new premises by connecting almost 74,000 authorized locations in 2019. I want to direct your attention in particular to the next two bullets. As you may recall from last year, historically, we would average around 20 to 30 new transmission POIs per year.
In 2019, we interconnected 145. Finally, in 2019, we set another record, this time for large commercial and industrial growth, which was up 43% since 2018. To support the growth on the system, Texas and the ERCOT market are seeing an influx of generation to meet demand. The current Texas grid is one of the cleanest in North America, with approximately 24,000 megawatts of wind and approximately 2,000 megawatts of utility scale solar. We expect the growth of renewables to continue with approximately 77,000 megawatts of utility scale solar, 30,000 megawatts of wind and 10,000 megawatts of storage presently in the queue at ERCOT.
Given our extensive transmission footprint, especially the West Texas and Panhandle portions of our system, where much of the renewable generation is developing, Encore is particularly well positioned to capture growth associated with the integration of additional renewables into ERCOT. In my opening remarks, I mentioned the strong and diverse growth presently occurring in the Encore service territory. When we talk about growth in Encore, all too often we focus primarily on the strong growth in the DFW Metroplex and the areas in and around the Permian Basin in West Texas. However, the Encore service in 2019, our McKinney District led in multifamily location growth. The Tyler District in Far East, Texas led in single family location growth.
Our Temple District led in subdivision growth. The Midland Odessa area continued to be the clear leader in commercial and industrial location growth, and the DFW Metroplex led in overall premise growth count. As you can see, Encore serves a growing and diverse service territory, both geographically and by customer type, with ample opportunities to invest in nearly every corner of our service territory. Turning to CapEx and rate base. Over the next 5 years, Oncor plans to invest approximately $11,900,000,000 in CapEx to further support our customers, our state and the ERCOT market.
More than 2 thirds of our capital plan is pure growth and approximately 97% of all CapEx is tracker eligible. As you can see, this capital plan is projected to give Encore an approximately 8% rate base CAGR through 2024. By 2024, we project rate base of approximately $22,000,000,000 which would be about 2x 2017 rate base or the level of rate base when Sempra Energy began its acquisition of an indirect majority interest in Oncor. A breakdown of the $11,900,000,000 CapEx plan by project category is presented in the appendix as well as information concerning potential incremental CapEx opportunities. As we do each year, we will be reviewing our CapEx plan this fall and will seek to determine whether impacts of global oil and gas prices or the coronavirus will impact growth in our service territory.
Speaking of coronavirus, it is our sincere hope that the United States will quickly see a decrease in coronavirus infections and that the long term U. S. Economic impact will be minimal. On the customer demand side, while it's early in the process, we expect to see a drop in C and I demand. However, we expect impacts to us to be mitigated due to the mechanism by which LC and I rates are designed and Lower natural gas prices and lower prices at the gas pump typically lead to higher consumption and with so much more activity in the homes, it is hard to predict the impact the coronavirus will have on residential load.
However, we still expect weather to be the major driver
on the residential side. As shown
on the right side of this slide, we operate our company safely, efficiently and continue to increase the reliability of service to our value and we do so by being safe, increasing reliability and controlling our costs. Like last year, I want to take the next few slides to highlight some of the exciting projects we're presently working on at Encore. First, we highlight the dramatic growth occurring on and around the BFW Airport area. BFW Airport is one of the top 5 busiest airports in America and is experiencing tremendous growth and transformation. Not only is it the largest airport in the world to achieve carbon neutral status, but it is also building its 6th terminal, terminal left.
DFW Airport has low growth potential in excess of 150 megawatts. Total project cost for Encore is between 100 $140,000,000 In 2019, Encore invested $30,000,000 in this area, but in 2020 beyond, we plan to invest between $70,000,000 $95,000,000 to support this growth. Strong growth continues in Arlington, Texas as well. In 2019, we energized Texas Live as well as the new Texas Ranger ballpark, totaling 16 megawatts of load and a 2019 investment of $5,000,000 Moving forward, we believe long term potential to be 100 megawatts or more with a projected total investment from Encore of $30,000,000 to $40,000,000 In Fort Worth, we are seeing strong growth around the new Dickies arena and the Fort Worth cultural arts area. Last year, I spoke to you about our Far West Texas transmission project and with all the recent focus on the Permian and Delaware basins, I want to give you an update.
Transmission infrastructure in West Texas is needed not only to support the growing oil and gas community, but also to help facilitate new renewables growth. By 2021, Encore expects to have invested over $700,000,000 in greenfield transmission projects to serve our West Texas, I'd like to direct your attention now to the bullet labeled additional transmission investment needed in
West Texas.
Based on a recent Delaware Basin study presently being discussed at ERCOT, West Texas is anticipated to add an additional 5,300 megawatts of load by 20 24. This dramatic increase in load is shown on the bottom left of the slide, which shows expected load growth over the next 10 years. In order to serve this load, multiple project options ranging from 425 to 4 85 circuit miles of new 345 kV transmission with projected cost of $618,000,000 to $873,000,000 are being considered. Based on the application of the SB nineteen thirty eight criteria, a significant portion of this construction would involve Encore. If this plan is implemented, this would be incremental CapEx that is not presently included in our 5 year plan.
Last year, I discussed how Encore is leveraging technology and data analytics to better serve our customers by replacing equipment like transformers before they fail, as well as providing better planning for storm recovery by using data to predict potential impacts to our system and staging crews and equipment in advance of anticipated weather events. Today, I want to tell you about an exciting new project. At Encore, we're combining artificial intelligence with low cost publicly available satellite imagery to identify system wide vegetation management projects and to guide and streamline VM decisions. This will present a number of operational benefits, improving our service reliability and allow us to more efficiently deploy capital on the system all to the benefit of our customers. In conclusion, Oncor's story continues to be strong.
We feel very good about our liquidity and ability to manage working capital needs as well as support our capital program even if volatility continues in the capital markets. We are still seeing strong growth and are planning on approximately 75,000 new premise in 2020, resulting in 2% premise growth that is double the national average. Rate base is expected to almost double between 2017 2024. Strong projected earnings and earnings growth and all the while providing better service to our customers and maintaining low rates. With that, I'd like to turn it over to Mia for an update on SoCal
Thank you, Alan, and thank you all again for joining us today via the webcast. I'm happy to discuss SoCalGas and how we fit into the overall Semper mission to become a premier energy infrastructure company. But first, I'd like to address the evolving coronavirus situation as it relates to our company. As you already know, safety is paramount at the Sempra Family Companies and SoCalGas is no exception. We're doing everything in our power to ensure the safe and reliable delivery of natural gas to our customers.
I'm proud of the proactive and preventative measures we've taken, including restricting access to critical facilities to assigned personnel only maintaining close communications with regulators, peers and the state to ensure the latest guidelines are implemented and important utility work can proceed and suspending service disconnections for customers experiencing financial hardships during this difficult time. Ultimately, our focus remains on delivering safe, reliable energy while also trying to ensure the health and well-being of our employees, customers and communities we serve. As the largest gas distribution company in the nation with more than 150 years of experience, we're providing premier service to nearly 22,000,000 customers every day. And our vision is clear. We want to be the cleanest gas utility in North America, delivering affordable and increasingly renewable energy to our customers.
Because safety is foundational to everything we do, as we work towards this vision, we're integrating industry leading safety. We're also innovating with technology as we work with California's legislature and regulators to transition to what we are calling the 21st century energy system. These steps are necessary in doing what we can to reduce greenhouse gas emissions and help the state meet its ambitious energy goals. Over the past year, we've achieved several important outcomes, which positions us well for the future. 2019 was an outstanding year for the company.
Early last year, we set our vision, path and plan and received some important regulatory decisions that further support our plan. As Kevin discussed earlier, we received our 2019 general rate case decision, authorizing $4,800,000,000 of primarily safety and reliability investments. This decision enables critical capital investment further enhancing the safety and reliability of our system. The California Public Utilities Commission also approved the extension of our recent GRC decision through 2023. This decision supports continued investment in our gas system into the future.
Along with SDG and E, we also received a decision on our 2020 cost of capital filing late last year, which approved the constructive rate of return and return on equity. In addition, 2 of our pipeline safety enhancement plan filings received constructive decisions, and we have a 3rd pending settlement approval. These three filings represent over $1,000,000,000 in projected project cost recovery over the life of the assets. Finally, SoCalGas continued its efforts in 2019 to retrofit pipelines to allow for in line inspections and made significant progress. 81% of total transmission pipelines and 85% of high consequence area transmission pipelines are now pickable.
2019 has put us in an ideal position moving forward. We have a strong foundation and from here 2020 is a year of execution for us. This is a time of growth and change for the industry, especially in the state of California, where the mission to reduce greenhouse gas emissions is well underway. However, that doesn't change our continued focus on safety and operational excellence. SoCalGas' leadership team is committed to promoting an environment where risks are identified and addressed in a timely manner.
This commitment is supported by 90% of our substantial capital program over the next 5 years dedicated to safety and reliability. We're supportive of California's decarbonization goals and believe that SoCalGas has a vital role play in the new energy future that's underway. 1 that considers all forms of energy and sets affordability and customer choice as critical components of future policy. The transportation sector is by far the biggest contributor to GHG emissions in the state, contributing 40% of total emissions. Natural gas emissions, on the other hand, only make up about a quarter of the state's emissions, with less than 1% coming from transportation.
If California is going to meet its goal of carbon neutrality by 2,045, then we need to reduce GHG emissions by far more than the percentage related to natural gas. At SoCalGas, we're doing what we can to help reduce emissions in all areas, even those not directly impacted by natural gas, such as transportation and agriculture. And customer choice is critical. The fact is the vast majority of Californians continue to prefer to use gas to heat their homes and water. Incorporating new technologies into our resource mix such as renewable natural gas, hydrogen and fuel cells will support the state of California's ambitious energy goals while continuing to provide reliable and affordable service to customers.
SoCalGas' 5 year capital plan is the largest in our long history with approximately $9,000,000,000 of investments and a 12% rate based CAGR over the 5 year plan period. As we carry out this robust capital plan, we also expect to maintain customer affordability. The capital plan is reflective of our supportive regulatory environment and our recent rate case decision. The majority of the planned capital investments will be spent on our core business areas, which include transmission, distribution, storage and information technology. 90% of these investments will be focused on safety and reliability, while also using innovation and technology as we look toward our energy future.
Over the next few slides, I will discuss this investment in more detail. We call this slide the energy continuum. It's similar to a slide Brett showed you last year. It summarizes the different energy options we see in addition to renewable electricity, which will help California transition to the 21st century energy system. There are a few key things to keep in mind as we transition to the new energy future.
One is that in order to maintain the same level of energy reliability and resiliency that customers are currently benefiting from and expect, renewable electricity will need a backstop to support the system when the sun isn't shining and the wind isn't blowing. Equally important, we need to find ways to store energy for when energy demand is at a maximum. The second incorporates technologies into the state's energy portfolio, allowing customers to continue to enjoy the cost advantage of gas technologies. And 3rd, integration between gas and electric is crucial for a successful energy future. This more inclusive approach is what will bring us success in achieving our climate change objectives in California.
I want to be clear, we're highly supportive of the state's environmental goals. Regulators understand and have demonstrated their support for continued investment into the future of California gas infrastructure. Proceeding to address a plan of action to ensure continued safe and reliable gas service through this transitional period. The proceeding emphasizes safety, reliability, preserving affordability for customers and improving integration between gas utilities and gas fired electric generators, which as I stated earlier are all goals that SoCalGas supports. We believe that traditional natural gas in combination with other existing and evolving gas technologies can provide the backstop needed to support safety, reliability and affordability.
Natural gas will continue to play a foundational role for decades to come. The 21st century energy system will also see continued developments in RNG, distributed energy, hydrogen, LNG and carbon capture utilization. Hydrogen is one of the technologies we're particularly excited about. There are so many potential end uses for hydrogen, including creating hydrogen for renewable electricity to be able to store it using our gas system as a battery for its long term storage and then deploying hydrogen across the broad range of end use sectors. We're working with regulators to authorize blending green hydrogen into our pipeline system, and we've made progress toward demonstration projects in 2020 and larger scale projects expected in 2022 to 2023.
I'm really excited about the potential these technologies hold, especially when integrated and all playing a role in a reliable resilient energy system. We expect that 40% of our 5 year capital plan will be invested in our distribution system. Our distribution integrity management program or what we call DENT and our GHG emissions reduction programs are the 2 key areas of investment. These programs enhance the safety and reliability of our distribution system and also have the benefit of further reducing our already low emissions. This is essential for a gas company of our size.
This is based on a risk and performance framework of continuous monitoring and improvement. We use leak surveys, pressure testing and consistent monitoring to help identify risks to our system for timely remediation. The GHG emissions reduction program focuses on achieving the state's ambitious GHG emission reduction goals by utilizing industry best practices to identify nonhazardous leaks faster than ever before. This program has been highly successful. In its short life, we have already invested more than $30,000,000 in capital investments related to emissions reductions and expanded our public outreach program.
As you can see, SoCalGas has an exciting future ahead and plays an integral role in Sempra Energy's mission to become North America's premier energy infrastructure company. We're already the nation's largest natural gas distribution company and we're proactive in our safety and reliability programs with approximately 90% of our capital plan being spent in those areas. Our business is sustainable and aligned with state goals as we strive become the cleanest gas utility in North America, delivering affordable and increasingly renewable energy. We're excited to continue the transition to a sustainable 21st century energy system of the future, while still respecting our core values that have made us a successful company for more than 150 years. With that, I'll hand the call off to Justin Bird and Lisa Glatch to review our LNG business.
Justin?
Thank you, Mia, and thank you all for joining us today. As you've heard from other presenters, we continue to prioritize the health and safety of our employees and our communities. We're taking proactive measures to limit COVID-nineteen risk, aligning our procedures with the latest federal, state and local guidelines. Despite these current challenges, we remain focused on prudently advancing our business. Sempra LNG's long term strategy is built upon our view that natural gas, particularly in the form of LNG, will play a critical role in satisfying growing global energy demand over the next several decades.
We think North America will play a critical role in supplying LNG and Sempra LNG is in a privileged position to capture this opportunity. Why do we think this? We have a privileged, well positioned platform. We can leverage our experience, our assets and our economies of scale to distinguish ourselves from our competitors and create additional value for our customers. We make prudent investments, manage risk, operate efficiently and importantly optimize.
We've transitioned our Cameron LNG regas project to liquefaction and are repeating the success at ECA Phase 1. We've improved returns at Cameron by refinancing a portion of its debt and we're intelligently developing Port Arthornica with opportunities for upside and expansion in mind. We're optimizing our designs and execution plans with knowledge gains from Cameron. Turning to the macro environment. In the short term, we've seen low spot prices driven by the current oversupply, the current oil supply situation, and now we're seeing reduced demand driven by the global economic downturn as a result of the COVID-nineteen pandemic.
These headwinds will likely decrease the number of projects that reach final investment decisions and will reduce the supply of LNG available in the mid-2020s when our ECA Phase 1 and Port Arthur projects are projected to come online. In the longer term, we've seen an increase in the global demand for LNG as countries progress along the energy transition. Over the long term, we see LNG demand increasing, particularly in Southeast Asia and the Indian subcontinent. We expect China to rebound, increasing the volume of LNG they import over time. To continue our success, we need to continue leveraging our competitive advantages, our well positioned projects, our capitalization and capital discipline and the strength of our relationships and our market credibility.
Over the last 12 months, we've been very successful. I'm proud of our team's efforts and accomplishments. We currently have customer arrangements for 21 out of the 24,000,000 tons per annum from our Phase 1 projects, which includes Cameron Phase 1. We continue to advance engineering, construction and commissioning of all our projects. Lisa will go into this in more detail.
At ECA Phase 1, we have been working closely with our counterparties and expect to sign sale and purchase agreements in the next few weeks. Tanya and her team continue to work with the Mexican government and expect to receive the Mexican export or Ciner permit in the second quarter. As such, we anticipate taking FID in the Q2 of this year. At Port Arthur, we continue to advance with Aramco toward a 25% equity position and 5,000,000 tons per annum of offtake. We look forward to being a cornerstone in their international gas initiative.
We count PGNIG, the Polish National Gas Company as a valued foundation customer for 2,000,000 tons per annum. With these arrangements, we have approximately 70% of the volume sold and are actively marketing the remaining volumes. We've been targeting FID in the Q3 of 2020. However, the current economic environment may impact the schedule. We remain confident, however, in the long term value of this project, particularly with our competitive advantages as the landscape for North American liquefaction projects becomes more challenging.
In the current economic environment, it is important to reiterate to our investors that we make capital decisions based upon our views of long term fundamentals and importantly supported by long term contracts with creditworthy counterparties. Each dollar at Sempra LNG competes for the best risk adjusted rate of return for our shareholders. In our business, we pursue projects with long term contracted cash flows that produce risk adjusted portfolio returns well in excess of those of our utility businesses. We also structure our projects and our contracts to allocate non infrastructure risks to our customers and suppliers. Let me highlight 2 risks that we're often asked about and how we manage them.
1st, commodity price risk. Gas prices are volatile. Under our contracts, we pass through this risk of price volatility to our customers, either as the procure of gas under the tolling arrangements at Cameron or under the pricing formula under our sale and purchase agreements at our other projects. 2nd, physical offtake risk. Our existing contracts are take or pay.
We receive our fixed payments whether or not our customers take physical LNG. We believe our disciplined approach to investment will continue to create long term value for our shareholders. Let me pass it over to Lisa, who will provide a deeper dive into our Phase 1 projects. Lisa?
Thanks, Justin. As Justin just highlighted, the past year was a truly momentous time for Cameron LNG Phase 1. We're so pleased with this quality facility and high performing operation. As a refresher, Phase 1 is a 3 train liquefaction plant with a capacity of 12,000,000 tons per annum and 20 year tolling contracts with our terrific partners Total, Mitsui, Mitsubishi and NYK Line. If you think back to a year ago, we were still in construction on all three trains facing a few challenges with our EPC contractor.
Fast forward, since then, Train 1 started producing LNG in May and then moved into commercial operations in August. Train 2 construction was completed, started up and moved into commercial operations just a few weeks ago. And Train 3 construction is now essentially completed with even greater construction productivity than Trains 12. It's in the commissioning phase and on track for commercial operations in Q3 this year. While the construction of the multibillion dollar investment like Cameron LNG is a complex challenge that takes years, equally challenging is creating a new operating company, architecting the organization, the people, systems and culture to be prepared to safely, reliably and responsibly operate a brand new facility that is so impressive, the President of the United States termed it a monster work of art.
I'm pleased to share that together with our partners, we've demonstrated our ability to successfully launch a high performing LNG operation. Let me share a few operational statistics with you, you might find 47 cargoes have been shipped and delivered to world markets. These cargoes are equivalent to displacing 10,000,000 tons of carbon compared to burning coal. The phenomenal safety culture that has resulted in over 85,000,000 hours worked without a single lost time incident has been infused into the operations with 0 lost time and 0 recordable incidents during the commercial operations of the plant to date. Trains 12 throughput has been demonstrated well above the design capacity.
And very recently, Train 1 completed its lenders reliability test, exceeding the required production target by over 14%. Commercial operations and everything that goes into coordinating ships with our customers under the tolling agreements have also gone well with a continuing strong focus on working closely with our customers during the current challenging market conditions. So despite the relative newness of the operation, the smoothness of the operation is enabling Cameron LNG to spend its time looking ahead to optimization efforts such as the use of innovative technologies like artificial intelligence and digitization, initiatives to enhance efficiency and lower operations and maintenance costs that enhances customer value, and evaluating initiatives to further benefit the environment through carbon capture and storage. In summary, we're very pleased with how Cameron LNG is performing and these early successes give us confidence that the future is bright for Cameron LNG and for the future operational phases of Sunpro's other LNG projects. In concert with that strong operational performance, Cameron LNG will be a strong earnings contributor for Sempra LNG as well.
We're pleased to reaffirm that we anticipate earnings to be higher than what we estimated at FID back in 2014. When all three trains are in commercial operation, Cameron LNG will contribute $400,000,000 to $450,000,000 in full year run rate earnings for Sempra LNG. In the vein of continuous optimization, debt refinancing has increased Sempra's near term cash flows, improving overall project returns and net present value. Further, the project has a strong credit profile with all 3 in the major ratings agencies. These financials are all underscored by low risk, A rated counterparties, our partners, who have take or pay contracts.
This provides the project with no commodity or volume risk, reiterating Justin's point that our projects are designed to provide shareholders with superior risk adjusted returns compared with the utilities. Let me now turn to our near term opportunities. As Justin mentioned, we continue to advance work on the first phases of projects at both ECA LNG and Port Arthur LNG. Both projects remain well positioned in a crowded space. Let's look first at ECA LNG.
In the last 12 months, we've been able to reduce project costs, reduce risks, all in capital costs are expected to be approximately $1,900,000,000 and we signed a fixed price turnkey contract with Technik FMC for $1,500,000,000 Technik FMC is a top tier LNG EPC contractor with particular strength in Mexico. We're confident in the long term value of the ECA project to our shareholders and our customers. With its unique position on the North American West Coast, EECA LNG reduces shipping times and costs to key markets in Asia. And I might add that interest in an expansion phase remains very high. Next, I turn to the first phase of Port Arthur LNG, where we also continue to move forward on key aspects of development.
We signed a fixed price turnkey EPC contract with Bechtel for $8,900,000,000 Bechtel is a top tier LNG EPC contractor with particular strength in the U. S. Gulf Coast and we've begun site work to relocate existing infrastructure. As you heard from Justin, the market and demand from our customers will determine the timing of this project. That said, like ECA, we are confident in the long term value of Port Arthur to our shareholders and our customers.
And we think this is especially true against the backdrop of likely fewer other North American LNG projects moving forward. While EAGA's particular advantage lies with geography, Port Arthur's advantage is the sheer scale of expansion opportunity, up to 8 LNG trades with the potential to become among the top few LNG mega projects in the world. Both projects are great examples of how we seek to maximize shareholder value by doing the right projects and doing them right. With intention, Sempra LNG takes what we learn on each project and we use that experience to optimize and improve marketing, development, design and construction, financing and operations across the portfolio. That's the Sempra LNG way.
And finally, let me summarize for you our value proposition, which we believe is differentiated, real and durable. We're building a portfolio of investment worthy projects that are geographically well positioned and that have expansion opportunity. Sempra LNG's projects target higher risk adjusted returns on capital than the regulated utility businesses, and we've demonstrated our ability to optimize these returns over time. We anticipate substantial free cash flows from all projects with the opportunity for continuous optimization. And to echo Justin's opening remarks, despite the current market headwinds, we see an opportunity supported by long term fundamentals that Sempra LNG can execute on.
We're confident in our ability to build a resilient and durable business that will feature prominently in the global energy transition. Thank you. Now I'll hand the call over to Tanya Ortiz, who will provide an update on AENOVA.
Good afternoon to everyone. Before I begin my presentation, I would like to state that in today's critical circumstances across the world with the coronavirus, for everyone at Yenova and following Sempra's leadership, the safety and well-being of our employees is absolutely our number one priority. We have been following Sempra's protocols to protect the health of our employees, customers and communities and ensure the continuity of our operations. All of our employees that can work from home are doing so since March 13. And for those who need to be on-site, we have implemented very strict protocols to protect everyone.
Our company is operating normally. Now I would like to start today by explaining why Mexico is part of Sempra's core markets. As you already heard from Jeff, Sempra is focused on 3 of the largest economies in North America. Mexico is today the 14th largest economy in the world and is expected to be number 7 by 2,050. Mexico is also the number one trading partner with the United States.
Mexico is one of the world's largest consumers of gasoline, natural gas and power, and Yanova has played a key role in developing energy infrastructure to serve this and there is a growing demand. So if we combine the population plus the growing energy demand, it is evident that Mexico requires significant investments in infrastructure to address its current needs. We are currently developing, constructing or operating infrastructure in every border state and in 17 out of the 32 states. We intend to continue expanding our footprint. We have achieved a leading position in Mexico's energy market by focusing on developing strategic and essential infrastructure for the country with a consistent sustainable business model for over 20 years.
This business model is based on long term take or pay contracts in U. S. Dollars with credit worthy counterparties and we target low double digit unlevered after tax rates of return. Throughout the years and especially last year, we demonstrated that we have a sustainable and a resilient business model. 2019 was an interesting and very likely the most challenging year for Yanova that I can recall.
However, we successfully overcame these challenges with positive outcomes. We met our financial and operational goals. We started operations of the marine pipeline and our first three solar projects and executed new contracts with high quality private offtakers for renewables and refined product storage. These projects will contribute to Mexico's energy security and to have access to reliable and affordable energy. Additionally, we executed several relevant financing transactions that replaced existing debt, extended our debt maturity, maintained our cost of debt and improved our liquidity.
I would like to highlight that we obtained our 1st green loan. This is the first of its kind that the IFC has granted to a Mexican company. In addition, a few days ago, the U. S. International Development Finance Corporation approved a long term financing to Enova of up to $241,000,000 This is our largest energy investment under the 2x Women's Initiative.
As part of our strategy of diversifying our asset and customer base, we have been able to continue to grow our revenues and we have a healthy balance between government entities and private offtakers. We are very committed to continue delivering growth, while maintaining our disciplined and sustainable business model and contributing to Mexico's development. Now let me give you more details about the opportunities that we see in our 3 business segments: natural gas, power and storage. Our first segment Mexico is the 9th largest natural gas consumer in the world and imports 70% of its gas supply mainly via pipelines from the United States. Natural gas continues to be an important investment opportunity for Genova because, 1st, new pipelines are needed to connect some areas with no infrastructure or with limited access to gas.
2nd, for a country of more than 120,000,000 people, only 7% of the country's households have access to natural gas. And 3rd, today there is no underground gas storage in Mexico, which is highly needed to enhance the country's energy security. I would like to explain briefly the relevance of the potential ECA liquefaction project from Yanova's point of view. The proposed liquefaction facility would represent an expected total growth investment of approximately $1,900,000,000 This capital is already included in Trevor's financial 2028 when the current contracts expire and Yanova would develop and own a new pipeline to deliver gas to the facility with an expected investment of $400,000,000 which is also included in Sempra's consolidated capital plan. We believe that this pipeline will also enhance gas service in Baja California.
As Justin and Lisa mentioned in their presentation, we continue to make good progress at ECA. Regarding the export permit, we continue to work very closely with the Mexican government and hope to receive it soon. Providing reliable and affordable energy to consumers for more than 20 years and we will continue doing so. Now I'll talk about our 2nd business segment, Power. Mexico is the 14th largest power consumer in the world.
Mexico has outstanding wind and solar resources for energy generation and has aggressive clean energy targets. Industrials and large commercial companies have been looking for clean and affordable sources of electricity. In Mexico, green is the new black. Our strategy in the renewables business is to capture the industrial demand and build a solid portfolio. Today, we are among the leaders in renewable generation in Mexico with more than 1,000 megawatts of capacity and with a high quality customer base.
In addition to these opportunities in our gas and renewables segment, there is one more segment, storage. Mexico is the 7th largest gasoline consumer in the world. Mexico currently relies on imported gasoline, diesel and jet fuel and the vast majority is produced in the United States. Additionally, as the market opened to private retail fuel companies, we identified a strategic need for refined product storage infrastructure for these new market participants. We have been able to develop 7 greenfield refined product storage terminals with approximately 8,000,000 barrels of capacity and we are working on a couple more.
As marine and inland terminals are developed, in the mid to long term, we expect liquid pipeline to be required. In the storage segment, we are also the largest private player. In summary, Enova is contributing to Mexico's energy security and sustainable development. For over 20 years, our priority has been safe, reliable and sustainable operations. Sustainability is part of our DNA.
We are proud to be part of the Mexican Stock Exchange Sustainability Index to be included in the FTSE For Good index series and to have received important distinctions such as MCSI. As I pointed out, our assets are critical for Mexico's economic development. A key to our resilient business model is to actively contribute to the communities where we belong, creating important social benefits and development. Let me take a minute to mention a couple of examples that make me particularly proud. As you know, access to clean and portable water is a demand in many rural communities.
The Yaqui tribe in Sonora is not an exception. We have worked closely with the community and with MIT professors to build water potabilization plants powered by solar panels in several Yaqui towns. Today, over 20,000 people benefit from an affordable and accessible source of portable water. One other great example, which is directly linked to our vision of delivering energy with purpose, is the solar panels that we have installed in the past year in community buildings benefiting close to 5,000 people. At every level of our company, we make sure that sustainability is embedded in our business strategy and everyday activities.
Let's now go into the numbers. I am very proud of the value that we have created for our shareholders. We went from a $3,000,000,000 asset base to a company of $10,000,000,000 in just 7 years. This year, we project that our adjusted EBITDA will exceed the $1,000,000,000 mark and with a diversified asset base. In this same 7 year period, we have also paid dividends of $1,300,000,000 For 2020, we have a capital plan of $815,000,000 to fund the 9 projects we currently have under Yanova has built a strong leading presence in Mexico while maintaining its sustainable and resilient business model.
We are committed to the country for the long run and are aligned with the government's priorities such as economic development. Despite the potential slowdown of the Mexican economy, Enova has a strong team that does the right thing, shapes the future and champions people. We will continue investing in Mexico's energy infrastructure to contribute to the country's growth. I will now pass the call over to Trevor to review the financial slides. Thank you very much.
Thanks, Tanya. As the last presenter, I appreciate everyone hanging in there with us today. I certainly realized it's not quite the same as having the conference in person. So thank you for bearing with us this afternoon. We're going to wrap up our prepared remarks today with the financial presentation.
Turning to my first slide, you've heard from all the presenters that we remain optimistic about the opportunities in front of our company even in the current challenging environment. We operate infrastructure assets that provide stable and visible cash flows in some of the fastest growing markets in North America. Our 2020 priorities are centered around funding our base capital plan, strengthening the balance sheet and returning cash to shareholders and doing it without the need for Sempra Equity, executing on our utility centered capital plan, maintaining strong liquidity and delivering strong future earnings visibility. Beginning in 2018, we positioned our portfolio in North America and have been executing on the current strategy. We believe this realigned focus can deliver higher quality earnings while strengthening the balance sheet.
Looking at our capital allocation process, it's first driven by safety. As you've heard throughout the call, safety is foundational to our company and is a focus across everything we do. For example, at our California utilities, over 80% of their record 5 year capital plan is driven by safety and reliability investments. And that's a good segue to our U. S.
Utility platform. The majority of our capital focus over the next 5 years is at our 3 U. S. Utilities. These organic growth opportunities continue to drive long term earnings visibility and help generate future shareholder returns.
We continue to focus on strengthening the balance sheet to create financial flexibility and to fund the growth that you've heard about today. As Jeff mentioned earlier, we continue to make good progress on the sale of our South American businesses and expect to receive approximately $4,700,000,000 after tax proceeds over the next 3 to 6 weeks. These proceeds will be used to repay debt as we move forward towards our credit targets of 16% FFO to debt over the near term. In addition, we're committed to returning cash to our shareholders through a growing dividend. We have a strong track record of doing this as highlighted by our 10% CAGR over the last decade.
Finally, we continue to evaluate and invest in infrastructure projects. I'll discuss this in more detail later on in my presentation. But what I'd like to highlight here is that we will only pursue projects that we believe will create long term risk adjusted value for our shareholders. We believe this capital allocation framework provides a balance for all stakeholders and offers visibility into long term value creation. With regards to our balance sheet, I wanted to highlight this slide.
At our operating companies, we continue to have strong FFO to debt metrics, including at Cameron LNG. At Sempra Parent, our holding company debt to total debt continues to trend down and is anticipated to be 26% by year end, driven by expected proceeds from the sale of our South American businesses and Cameron fully coming online. The next two slides are similar to what we shared with you on our Q4 call. You'll notice that we've added a comparison of our previous 5 year capital plans on the right hand side of the page. Not only has our capital plan grown, but it has grown primarily at our U.
S. Utilities. I want to reinforce a few things you've heard today regarding our U. S. Utility capital forecast.
Both SDG and E and SoCalGas' 5 year capital plans are largely driven by safety and reliability spending directed by the commission in their recent rate case decisions. At Encore, what you see in this chart is our share of Encore's $11,900,000,000 capital plan. You heard Alan mention that almost 70% of this plan is focused on funding new growth, which is why we find the Texas market so attractive. It's important to point out that these capital plans are self funded and should require little capital from Sempra Parent. In addition, these investments are centered around providing safe and reliable energy to our customers and we would not expect these investments to be materially impacted by the current market conditions.
That said, we are in unprecedented times and we continue to monitor the situation as we execute on these capital plans. Touching briefly on our infrastructure businesses. Roughly half of Sempra Mexico's capital plan is driven by the continued build out of its refined product storage business backed by high quality customers. At Sempra LNG, the majority of this capital plan is for ECA Phase 1. I will point out this is a bit of a departure from our past practice of only including projects that are approved or have reached final investment decision in our base capital plan.
Given the timing and our belief that the project is likely moving forward, we felt comfortable including it in the plan. The rest of the amounts in the LNG segment are for the remaining capital at Cameron LNG as well as some of the preliminary development work for the other projects. Moving to our 5 year projected rate base, there are 2 things I want to highlight on this slide. 1st, we're projecting 9% average annual growth similar to last year. However, it's important to note that our starting rate base is also $5,000,000,000 higher than the starting point in 2018.
This continued robust rate based growth is another example of how repositioning our portfolio has improved our visibility to capital deployment. 2nd, I'd like to point out that in 2024, we're projecting over $50,000,000,000 of U. S. Utility rate base in the 2 premier markets in North America. It wasn't long ago that we had U.
S. Utility rate base of approximately $15,000,000,000 This speaks to our ability to thoughtfully expand and diversify our utility businesses. In prior investor conferences, I've talked a lot about our capital rotation program. I stated that as part of repositioning our business, we expect that both the sale of our renewable generation portfolio and the South American businesses would be dilutive to EPS. Although that was our best estimate at the time, after each divestiture, we were able to maintain our 2019 2020 adjusted guidance ranges.
And in fact, in 2019, we increased the midpoint of our adjusted guidance range by $0.25 And then as you saw from our year end 2019 results, we were able to exceed the top end of that revised range. I want to spend a little time discussing how we were able to recycle capital and maintain our expected earnings per share ranges. Starting with the sale of our renewables and natural gas storage assets, We were able to sell those businesses for a combined approximately $2,500,000,000 and recycle the proceeds into expanding our footprint in Texas through Encore's acquisition of InfraREIT and our purchase of 50% of Sherri land. Regarding 2020, you will recall we updated the schedule for Cameron on the Q1 call of last year and we also lose the earnings from our South American businesses. However, we've been able to offset these items with the constructive California rate cases as well as the interest savings through the continued pay down of parent debt from the expected South American proceeds.
Looking at the midpoint of 2021, not only do we have the ability to increase our EPS by about $1 over 2019, but we also have a much higher quality earnings mix. I think the message comes through loud and clear on this slide. While refocusing our businesses over the past 2 years in North America, we expect to grow our adjusted EPS at 12% while executing a disciplined capital rotation program. As you've seen throughout the presentations today, even though we sold our renewables generation business, in no way does it mean that we don't support renewable energy. In North America, our infrastructure investments support the delivery of cheaper, more reliable and cleaner energy to consumers.
The energy industry is transitioning and our assets are helping to support it through continued infrastructure investment. Let's turn to the next slide that walks through the segment level guidance. As mentioned previously, we are reaffirming our 2020 adjusted EPS guidance of $6.70 to $7.50 per share and our 2021 guidance of $7.50 to $8.10 per share. There are a few key highlights I'd like to address on this slide. First, starting with our California utilities.
You'll see a step up from 2018 levels due to the new earnings base of these businesses. Between 2018 2019, SDG and E grew by nearly $100,000,000 in total adjusted earnings, while at SoCalGas adjusted earnings grew by nearly $220,000,000 Looking at the adjusted earnings growth at the California utilities from 2019 through 2021, it's below the increase seen between 2018 2019. This is largely driven by the timing of the general rate case that was received in the Q3 last year, as well as some regulatory constructs that create lag in earnings recognition. However, over the long term, we believe earnings quality is improving because it is being driven by rate based growth. At OnCore, earnings growth is expected to be driven by load and premise growth in Encore service territory.
Shifting to our LNG segment. In 2020, Sempra LNG earnings continue to grow with the partial year of service of Train 2 and Train 3 at Cameron. In 2021, you'll see the full run rate of Cameron earnings of $400,000,000 to $450,000,000 flowing into the segment, which is offset by $40,000,000 to $50,000,000 of continuing G and A and development costs. Lastly, at parent, interest and preferred dividends continue to step down from 2018 levels. This is driven by the continued pay down of outstanding parent debt from the expected sale of South America.
Also, you'll see a decrease in this line in 2021 given the conversion of mandatory convertible preferred stock. Overall, looking at the earnings mix relative to our 2018 profile, you can see why we believe we have a business with much higher quality and greater visibility into earnings going forward. Turning to the next slide. This is a question we got on our 4th quarter earnings call, so I'd like to spend a little time walking through the incremental financing needs over our 5 year plan. We expect to be able to fund our base plan with our strong operating cash flow, the expected proceeds from the sale of our South American businesses and debt financings.
As I said earlier, with the ongoing global healthcare situation, we continue to evaluate our base capital plan as it relates to project costs and timing of work. While we're working through these uncertain times, make no mistake, we will always continue to invest in safety and reliability of our operations. As you can see from this slide, the combined Sempra family of companies provides a strong liquidity position. We currently have approximately $8,000,000,000 of liquidity, including cash on hand and undrawn committed credit facilities. This is before the expected sale of South America.
We believe our position provides us flexibility through various market conditions and reduces our reliance on the short term capital markets as we fund our capital plan. In fact, with the expected sale of our South American businesses, we believe it is possible to fund our utility capital plans and Sempra dividend and debt maturities without the need to access the capital markets well into 2021. As you've heard throughout the day, Sempra has built a resilient business and this is just another example. Now I'd like to spend a moment discussing how we look at investing in our LNG infrastructure business. Referring back to the second slide of my presentation, where I highlighted our disciplined capital allocation, I wanted to emphasize we will not pursue incremental growth projects unless we believe they will create long term risk adjusted value for our shareholders.
As Justin and Lisa mentioned in their presentation, our LNG projects benefit from contracted take or pay off take arrangements with creditworthy counterparties for 100 percent of the project's off take capacity, lump sum turnkey EPC agreements with high quality construction firms, non recourse project financings and equity sales to JV Partners. In addition to managing risks, we also have the ability to optimize project economics to drive ROEs and portfolio returns far above what we expect at our U. S. Utility businesses. I want to be very clear though, if we are unable to achieve risk adjusted returns well above those at our U.
S. Utility businesses, we will not pursue these projects. To conclude, even in this challenging environment, we continue to be optimistic about our ability to execute. We remain focused on safety and reliability across all of our businesses. We're positioned in some of North America's most attractive markets.
We have a robust capital plan anchored by our 3 great U. S. Utilities. We have built sufficient liquidity and continue to strengthen the balance sheet. We have a strong track record of returning cash to our shareholders through a growing dividend and we have incremental growth opportunities that can offer additional long term value to our shareholders.
Throughout the presentations, you've heard what each organization is doing to help ensure the safety of our employees while delivering critical energy to communities we serve, we couldn't be more proud of the hard work and coordination between all the Sempra family of companies around these efforts. We hope all of you stay safe during this time. With that, we'll conclude our prepared remarks and then open that up for questions.
Thank
Our first question comes from Michael Lapides with Goldman Sachs.
Hey, guys. Thank you for taking my question. I really have 2 kind of high level. First of all, the Texas economy, how are you thinking about the impact on your service territories growth there, given just kind of a lower oil price environment, what that means, not just for the small portion of the Permian that you serve, but obviously the Dallas Fort Worth area. That's question 1.
Question 2, also oil related, the Mexico economy, Mexican GDP depends significantly on kind of global oil sales. How are you thinking about what happens economically there and what are some of the second third derivative impacts on businesses like yours?
Michael, first off, let me just say we appreciate very much you hanging in there for us late in the day to stay with us on the call. I'll take the Texas question first and pass it to Alan. And after Alan finishes, I'll comment on the Mexican oil issue and then ask Tanya to join me on some additional color. Let me start with Texas. I mean, 2 things I think that really make us feel very good about the business prospects of Encore.
The first of which is, you recall that we've got an $11,900,000,000 capital program. There's actually a slide that Alan has in his appendix that highlights another $775,000,000 to $1,270,000,000 of incremental CapEx that Dave identified that could fall within the 5 year plan. I definitely would not look at those 2 as being additive, but I think it gives Alan and Jim and Don Clevenger and the team the opportunity to backfill for projects if there's any slippage across this 5 year plan, number 1. And then number 2, on the capital side, most of the work that they're doing in West Texas, we talked a little bit about the Permian and the Delaware Basins, is work that is meeting demand, which is already in place. In other words, a lot of those folks in those basins are trying to either lower cost and by moving to the grid, it is a significant savings in terms of lowering the marginal cost of production.
And number 2, most of what they're meeting is stuff that's going to keep them busy well into 2021 anyway. But I will stop there and maybe Alan, you can provide additional commentary and particularly on the way your revenue mechanism works around both volumes and weather?
Yes. Thanks, Jeff, and thanks, Michael. Let me start with CapEx. From thinking about transmission distribution perspective, the vast majority of our transmission book has been approved by the commission, and we're set to execute on that through 2021. If you look at my appendix, about 58% of the CapEx plan for the 5 years is transmission.
That's directionally correct for the next year, 2 years as well. So we feel very good about the transmission piece of our CapEx book. The things you have to watch there are generation interconnects and transmission POIs, but that's not really material to the overall numbers on transmission. Distribution is going to be based on what kind of impacts we see to serve new to new premises. As I said in my prepared remarks, we're anticipating preparing for $75,000 which will be a record for us.
If that backs off of that, then as Jeff said, what we would do, we have a significant amount of incremental capital in the appendix. If it was beneficial to our customers, if it supported the ERCOT market as reasonable and necessary, there are a number of things around our system that we could backfill here if we needed to, which is just too soon to tell on the distribution side. We'll just have to wait and see what develops. So we do have other opportunities if there is a fallback there. Let me address West Texas for a minute because Jeff alluded to it.
West Texas has been a great story for us for a long time and I've got to recognize the realities of the market out there as they are. But just
let me tell you what
I can tell you because it's too soon for me to tell what's going to happen out there as well. But as Jeff alluded to, we have had a significant amount of built up demand resulting from the significant growth in the region over the last few years, and we've been playing catch up. And we're going to need to continue playing catch up until we meet the demand that's on the system now. So that's one. As I mentioned in my remarks, we have the West Texas transmission project.
That's going to continue. It's been approved. It's in process. That's another $700,000,000 over 3 years to be completed mid-twenty 21. Another thing that's going on out there is there's significant amount of oil and gas activity that's not presently connected to the grid in the Delaware especially, that's primarily self generating using diesel.
And even at today's prices, those customers are telling us they're still anxious to connect to the grid, so we need to continue with that work as well. There's a significant amount of renewables on development in West Texas, about 30% of the renewables under study at ERCOT are out there. So we anticipate some of that will develop. And then 70% of my worst performing feeders, and I'm not proud of that, but 70% of my worst performing feeders are actually in this part of the state. And so I need to continue to invest in order to increase the reliability to my customers out there.
So yes, there's the market reality with West Texas right now in the Permian and Delaware, but we have a lot of opportunities. And going back to what Jeff said, even if we have a fall off in West Texas or we experience a decreased number of new premises, We have a lot of other opportunities to invest in our system and I think ways that would benefit our customers in the market. That's my answer unless you
want me
to get into revenues as well.
I think that's fine. And then I'll tackle the Mexico question first, Michael, and then pass it to Tanya. But I would look at it in a couple of different ways. If you go back just over probably 10 years, Pemex's contributions to governmental revenues were in about the mid-thirty percent range. Today, directionally, they're below 15%.
So the economy has really diversified significantly over the last decade. So their exposure to oil generally is less than it was 5 years ago or even more so 10 years ago. I think the challenge we have in front of us is the near term impact of that economy. I think in our discussions with Tanya and Carlos, the team has been focused on maintaining tight cost controls, making sure they've got a very tight disciplined capital allocation program and that they are focused on projects need to be done where they have a clear sight to being finished and bringing those into service. The other thing I would say is the longer term picture probably gets even better for us in Mexico.
I think there's going to be some short term disruptions. But think about Mexico is the largest economic trading partner to the United States today. It's a huge buyer of refined products. It's our number one natural gas trading partner. And as you think about what takes place when the current environment changes, and it will change at some point, I would expect to see supply chains be revised.
I would expect to see USMCA and the growing importance of Canada and Mexico and the United States being integrated to become more important. And I think the key issue is the continued diversification of Mexico's economy. And that's one of the things I think we're bullish on long term. But, Tom, you would like to add to any commentary around Mexico's exposure to the current oil markets and additional color you can provide for Michael?
Thank you, Jeff. Good afternoon, Michael. Yes, in addition to what Jeff just mentioned, I would add that just as oil revenues have decreased as a portion of government revenues. Pemex revenues have also decreased as a portion of Genova's revenues. So as part of our diversification strategy, we have more and more private off takers.
And today, PAMEX represents only 10% of Genova's revenues. In addition, as the economy becomes more industrialized, again, our assets are very important to the Mexican economy. And as the government has more limited resources, they will rely more and more on private investments to be able to meet their goals.
Got it. Thank you, guys. Much appreciated.
Appreciate it, Michael.
And our next question will come from Stephen Byrd with Morgan
Stanley. Hope, I just wanted to echo your thoughts. Hope everyone's safe. I hope everyone's families are doing okay in this very challenging time.
Thank you, Stephen.
Just wanted to talk about the California Gas Utility Business. I think you've laid out a very thoughtful approach to adapting to California's policy objectives. And I think it's pretty well acknowledged. You all are thought leaders and thinking about hydrogen and the role with the gas utility. I guess I had two questions relating to that on the positive side.
How do you see the economics of green hydrogen playing out from here? There's a lot of interest among investors, but often not a lot of real facts in terms of how close we really are to being economic. You highlight a good point about how much excess renewable energy California has various times, but any further color on really the economics recurring for Ampere and Hydrogen? And then I guess on the flip side, the more negative side, as we think about California policy moving away from greenhouse gases, including methane altogether, I mean, you've described the transition and that makes sense. How do we think in the long term about the value of the gas utility, how it can adapt to that, no sort of hydrocarbon sort of future down the road?
Thank you.
I certainly appreciate the question. I've got Brett Lane on the phone and Brett I'll pass it to you in a second. But let me start with your second question first if I could, Stephen. And start with the key point, which is in California recall that we're decoupled. This is a regulatory model that was adopted in the early part of 1980s to make sure that we align utility practice and procedure with the goals of the consumer to use both less electricity and less natural gas.
So if there is declining volumes of natural gas in the future, that is not an economic consequence to us. And frankly, we're really aligned around energy efficiency goals, both in gas and electricity. The second comment I make around valuation is, I think historically, and you followed the market for a long time, natural gas has tended to trade at a premium to electric businesses, largely because it's been viewed as being more lightly regulated. It can be stored and tend to be less volatile, whereas electricity had challenges in terms of instantaneous delivery and it tend to be on the more political side. Look, I think one of the things that was emphasized in my strategy presentation was how important we think scale and leadership is, particularly in the right market.
So we've raised our hand in the state of California and we've elected to provide leadership around what we think is good for public policy and we're strongly aligned with the current administration to find new and better ways to support their greenhouse goals. Natural gas will have a role in that for a very, very long period of time. Even in Mia's remarks, she said it'll be over several decades. So I think we feel very good about the long term value proposition of the utility. On the Hydrogen side, Kevin Segar is with us today.
He's got 2 beta projects that he's launching in hydrogen this year. He's asked me not to commit him to it, but I've just committed him to it on top of this webcast. SoCalGas has another project that they're launching this year as a beta project, and they're launching 2 of much larger scale in 2021 2022. And I think part of the race for us as a company is we have a strong belief in the role of hydrogen in the future. And if it's a 2,040 future, that doesn't help much.
And I think our role as a leader in the natural gas space in North America is again to step forward and demonstrate the efficacy of hydrogen today and the economics that you're referring to. And Brett, I'll pass it on to you if you're available to make a few more comments and add some color, particularly to the hydrogen side.
Yes. Thanks, Jeff. And Steven, thank you for the questions as well. Starting on hydrogen, and I know you have had some chats on the side. Our view there is what can we do with others that are working on this around the world in particular of how to help drive down the cost, right?
And generally speaking, there's 2 sides of that equation. 1 is, how can you get the cost of the power itself, which our view is we have the we have all of this excess renewable during high times of generation, getting that as cheap as possible. And then really the focus along a lot of the, let's say, research on this is how do we get the cost of the electrolyzer to come down. And how we're looking at this as well is this is ultimately a form of storage. And our view at this time is what we're really competing against at this time is, can this be an economic form of storage?
And we've seen some studies that it's at the same level or cheaper than at least what's projected in other forms of storage, be it batteries or other types in that way. As Jeff said, what how we're focused on this is the horizon of 2,030 in that timeframe that we think we as an industry and we collectively different synergy companies across the world really have to continue putting this drive and focus on moving this to make it really commercially available in that kind of time horizon as we move this forward. I would touch on quickly your question on the no hydrocarbon futures side, just as a reminder. What we try to do is focus on the issue of what we're trying to do is decarbonize. The issue is not trying to eliminate the use of fossil fuel.
And how do we achieve those goals? That's why when we launched our vision last year, what we really initially are focused on is the role of renewable natural 2022. We think we're on our way there. By the end of this year, we think we'll have 2% in our system. And then what are the other things that we can do to help us move into that timeframe of 2,030 when again we see hydrogen as the opportunity out there.
So with that, Jeff, I'll turn it to you.
Thank you, Brett.
Thank you very much.
And our next question will come from Julien Dumoulin Smith with Bank of America.
Hi, Julien.
Hey, good afternoon, team. Hope you're all safe. Thank you very much for the time and the presentation. Thank you. Absolutely.
So perhaps well done with the presentation here. I'll try to break it up into a couple of pieces here. First on the LNG side, how are you thinking about your confidence level on LNG? Obviously, you're pushing forward on multiple fronts here. How do you think about the breakpoints?
You specifically mentioned targeting returns, not pursuing things that they don't meet your hurdles. I'd like to clarify under this subpart of confidence, how do you think about spending the money? And is that ECA capital ready in your budget? And how do you think about moving forward in the flex pieces there? And then if I can squeeze in another subpart here on the LNG piece, your earnings number for 2021 relative to the long term run rate, I assume that includes the development OpEx piece.
To the extent to which you slow down on LNG, could you see a bump in 2021 2022 earnings as you see that OpEx in a little bit lighter?
Julien, you've got a bunch of questions here. So let me take a stab at it. If I miss one, make sure I catch back up with you real quickly. I'll start with this. We had some commentary on our Q4 call that talked about our view that there's going to be a shortfall in needed infrastructure in the middle part of the decade.
We certainly continue to think that that's probably even more true today than it was 45 days ago. So look, I've always said this is what makes the market right. There are people that have different views about what LNG demand will be in the middle part of the decade. And certainly, the current climate nationwide has seen delays at the large mega projects that Qatar is pursuing. There's been delays at Exxon's project at Mozambique.
And certainly, the way I would characterize our program is, think of it as 2 phases. In Phase 1, we have 21,000,000 tons of 24,000,000 tons per annum signed up. The shortfall today is in the remaining 30% of what we need at Port Arthur. And one of the things you're hearing us emphasize on the call is, we're going to be highly disciplined, right? We have a view that we can build a portfolio that has mid teen after tax levered returns.
It's very attractive relative to our utility returns and you should expect us to be very disciplined about how we approach a final investment decision at every one of our future projects. Now to your point about the ECA Capital, it definitely is in the plan. And one of the reasons I would characterize that is you fought our company for a long period of time. We tend to be very conservative on what we put in the plan. I think the fact that we put it in the plan that we're showing you as part of our going forward strategy reflects our confidence level that we'll deliver on it.
I've also told people this is not a race. Justin Berg has been exchanging commercial agreements just in the last couple of days to finalize our deal with counterparties. There's more work to be done on the scenario permit, but our confidence level remains fairly high that we can get this done in Q2, but it comes with the caveat that we're going to make sure that we're very disciplined about meeting our required target return hurdles. And I think you had another question regarding a couple of other areas if you want to ask those
for me.
Yes. Sorry, just to clarify. So it seems like you've got OpEx for development activities in your net income numbers on 2021. If you were to slow down, you could actually see your net income kind of trend closer to that run rate for Cameron Phase 1, I would imagine?
I think you're probably right on that. But it would probably be within the range of the guidance we provided. Trevor, do you want to make any commentary on that?
Yes, Jeff. As I said in my remarks, in a full run rate in 2021, we're saying 400 to $450,000,000 and then $40,000,000 to $50,000,000 of G and A and continuing development costs. Again, if you slow down, you still a lot of those development costs are the folks that still would be working on developing and not necessarily eliminating those costs, but there would be some costs that you would pull out associated with the development and the G and A. But generally, as Jeff said, it's in the guidance range.
Got it. And if I can just clarify one further point holistically on the plan. You're including obviously ECA in that plan. How are you thinking about your FFO to debt metrics? It's pretty incredible you're building another LNG project, not needing external equity.
Can you comment about through the 5 year period about that equity need? And obviously through that interim period, am I correct in giving that statement that you're pursuing within your absolute debt metrics required by the agencies and you're still able to pursue LNG growth?
Well, look, there's a couple of questions there. I think the most important thing is Trevor rolled out a slide that showed our $8,500,000,000 of total liquidity accounting, the standalone facilities that Encore has. As you know, we certainly expect to close the South American transaction, which would top up our liquidity to about 13,000,000,000 dollars And what's interesting is, we were reviewing this just in the last couple of days. In 2019, we actually took the time to roll our credit lines at the parent company. We extended those lines through 20 24 and brought in a total of 23 banks to support our liquidity, Julian.
We also rolled our lines at the California utilities. We had about $1,000,000,000 line over a year ago. Under Kevin and Brett's leadership, we took that apart from a single line to 2 freestanding lines. They're both in place through 2024 for a total of about $2,250,000,000 We likewise rolled our lines and expanded them at Eanova last year. So I think we've been pretty thoughtful about being prepared to make sure we have the financial strength to support the plan we have going forward.
And then in Trevor's presentation, Julian, he talked about the importance of having a balanced capital structure, about going after our parent to total debt numbers and also FFO to debt. But Trevor, I think the 2 things that Julian wants to speak to really is our expectations regarding equity, number 1. And number 2, how you're thinking about exercising this program around our goal of 16% FFO to debt?
Yes. Thanks, Jeff. So Julian, a couple of things. One is we have, as you point out, put ECA in the plan and that's roughly $1,900,000,000 Now there is going to be some third party equity ownership in that facility as well as debt financing associated with that at some point. And so when you take a look at our ownership and then also Enova's ownership, plus the debt financing, it's a pretty small equity check at the end of the day for that project.
And then from our perspective, we also have the cash flows from Cameron coming in that have gone up. So I kind of mentioned that that's close to $1,000,000,000 in 2020 2021. And then with the refinancing that we did at Cameron, those cash flows are also going up to roughly a little over $500,000,000 a year over the 10 years and then F goes up beyond that. So right now, what we've done is taking a look at the capital program and the assumption that we're getting, call it, roughly $4,700,000,000 from the sale of the South American assets, we believe we can fund this capital plan without issuing Sempra equity.
Through 2021 or through the 5 year?
Through the 5 year.
Excellent. Thank you for clarifying that. Thank you all for the time. Appreciate it. Thank you, Julien.
We have a couple of questions from the webcast. We're going to take from Steve Fleishman. Why is the net income growth at San Diego Gas and Electric in 2021 below rate based growth versus 2020? It looks like earned ROEs go down. That's one of his questions.
The first thing I would say, and Trevor, you can add to it is the key is the timing, Steve, of the GRC decision. You recall that we got the decision in Q4 of last year with rates effective going back to January 1, 2019. Now with increased spending against our revenue requirement, it naturally shows slower growth through 2021. But probably the most important takeaway is that timing difference takes care of itself over a longer period of time. And over a longer period of time, you expect earnings growth to match rate base growth.
And the second question that Steve has for Encore, is there are there any sensitivities you can provide to sales by customer class or overall? What is the energy customer exposure as a percentage of total?
Thank you. I think this is a great question. We've had some conversations, Steve, about this internally. And Alan, I'm going to pass it to you. But a couple of things that might be helpful is to talk about how the revenue mechanism works broadly in Texas and secondly maybe the list of the percentage contribution by different customer classes, if you don't mind.
Yes. I'd be glad to, Jeff. So on the revenue side, you got to focus for us on consumption and demand. From an LC and I perspective, we build them on demand. So they pay the higher of the actual peak demand or 80% of their peak over the last 11 months.
Since we're in shoulder months right now, we would expect them to be on the lower of those 2 anyway. So we don't think we're going to see any real immediate impact or it's going to be a muted impact for revenues coming out of LC and I for the near term. Residential is just too soon to tell. As I alluded to in my opening remarks. With people sheltering in place for much of our system, we could even see higher consumption on the residential side.
It's just too soon to tell. As you all know, we have weather impacts our residential side fairly heavily, plus or minus 25 percent of revenues, plus or minus 20 percent of net income in any particular year. And we're still expecting weather to be a bigger driver than loss of consumption due to coronavirus or other. What was the other question, Jeff? Breakdown.
So revenues by customer class, we are so those numbers will be published in our EMR coming out in April, I should say that first for the actual numbers. Generally, we're at 52% revenues for large C and I and 48% for residential historically.
Thank you.
And our next
Just hopefully two quick questions. Just some housekeeping, I guess. What is Sempra waiting for to make a FID on ECCA Phase 1 and Susan's report offer?
Sure. On Echo Phase 1, we've been working on this project for several years now. It's been a tight collaboration between E and O and separate LNG team. There's really 2 pacing items, first of which is to finalize the SPAs for all of our offtake agreements. We have HOAs in place.
We've made great progress here. Justin Bird has been leading that commercial effort and we feel very good about where we're at with our customer relationships. We've got the project 100% sold. We just need to move the definitive agreements consistent with terms that we think are acceptable. Secondly, as part of bringing that project forward, Carlos and Tanya have been working very closely with Mexican officials and all the appropriate agencies.
It's been supported by Dennis Arriola here with the U. S. Government to make sure that everyone understands the importance of West Texas natural gas getting across the northern tier of Mexico and creating an outlet to the Pacific market. So we're waiting for a permit, we refer to as the scenario permit and that work is currently ongoing. So, those are the 2 kind of long poles in the tent that we're working on and we feel like we're making great progress.
Relative to Port Arthur, Port Arthur is a very big project. We've announced an EPC contract that was referenced in, I think, Lisa Glass's prepared remarks of $8,900,000,000 with Bechtel. This is a very large project. And what we think is interesting, this is the only greenfield project in our portfolio. Of the 5 projects we're pursuing, this is the only one that is a greenfield status.
And really Bechtel has a really sterling reputation, not only in doing work in the Gulf, but also building greenfield projects. So there, the big focus for us is we're currently moving a road that facilitates giving us all the room we need to build the project adjacent to the channel. And secondly, we're still working in a really tough market right now to get the additional contracts. We need to have 10,000,000 tons per annum fully contracted for 20 years, and currently we have 7. So going back to a couple of things we've made as part of our broader comments, the Sempra management team is exercising tremendous discipline in terms of how we spend dollars on O and M and SG and A and capital.
And particularly in the LNG marketplace, it's got to meet a high hurdle for us to move forward. So Port Arthur is a very exciting project. There's really probably 3 large mega projects in the world, one of which is Arctic LNG in Russia, one of which is Qatar, which has been delayed and one of which is Port Arthur. And Port Arthur, we believe, is a signature project for the United States. It has certainly been viewed that way by the Polish oil and gas company as well as Aramco.
We remain committed to marketing that project and see if we can secure the necessary agreements. We feel very good about it. But I think the key watchword here, Anthony, is you should expect us to be very disciplined in terms of how we approach Port Arthur.
I guess and just lastly, if I take a step back and you look at history of how we had this overbuilt or overdrilling, I guess, the Shell revolution that happened in this country, How do we prevent or what is there such a thing as we get this oversupply of global LNG? And I know you're seeing longer term that it may be, I think, mid decade there's a greater need, but what prevents this oversupply of LNG?
Look, I think broadly speaking, you think about all the commodity markets, whether it's liquids, refined product, oil and natural gas, it's always been fairly subject to market cycles. What's interesting is the oil price converged to the global commodity several decades ago. And I think what you're seeing now in the LNG space is a strong trend line toward a convergence of a global, not a regional natural gas price. And LNG is going to play a big part of that. But maybe if I took a step back, what I would tell you is in one of the slides in my strategy presentation, we talked about how we've positioned Sempra's business model as an infrastructure specific business model in the transmission and distribution place.
We want to build the infrastructure that's valuable to other people. People pay us for rent for our infrastructure and we don't want to be exposed to retail risk on one side or commodity risk on the other. So you're absolutely correct in your assessment that these large markets are subject to large cycles. And currently, the spot market is poor for a variety of reasons, including the current economic state. But we do think fundamentally, if you think about the large energy transition that's ongoing and the need to give the developing world choices of lower carbon fuels, the LNG business will become bigger, it will become more important and the role that we want to play is not one that is exposed to the commodity side of it, it's one that builds the essential infrastructure that enables that marketplace.
Thanks so much for taking my questions and I wish everyone's family well at this time.
Thanks a lot. Stay safe, Anthony.
And our next question will come from Ryan Levine with Citi.
Good afternoon. Hi, guys. Can you speak to the legal protections you have on Cameron LNG contracts on 1st major epidemic risk in this environment with COVID-nineteen. And to the extent that it becomes relevant, is the project considered critical infrastructure project and that the labor would continue to work to complete if there was an issue in the state?
Great question, Ryan. I'll start with second part of the question and I'll pass the first part over to Justin Berg here momentarily. The way I would characterize it is you know that of these three trains that are being developed, Trains 12 are online and operating today. So that is an operating part of the plant. And then in Train 3, it's probably less about characterize it as a construction project.
It's more of a commissioning project at this point. And I think in Lisa Glatch's remarks earlier, she talked about that we plan to add feed gas to Train 3 next month. So we feel very good about where we're at and the commissioning of Train 3 and how close we are now to have full operations at the plant. But Justin, I'll pass it to you if you want to add some color around the way the contracts work there and why you feel good about it. And if there's any other color that Lisa wants to provide, that would be great as well.
Thank you, Jeff. And thank you, Ryan, for the question. Let me just say, again, at Sempra LNG, our first priority is on the health and safety of our employees and our communities. When you look at Cameron, Cameron has been designated a critical bit of infrastructure. So we do have teams there that are working safely through the commissioning process and to keep Trains 12 in operations.
If you look at our contracts, as I said in my prepared remarks, our contracts are take or pay. So whether or not the customers decide to take physical LNG cargoes, we do receive our fixed payments. In terms of force majeure, we don't anticipate any force majeure as a result of the coronavirus. The plant is operating and is operating smoothly. Let me
Okay. Well, I can just tag on a little bit there. This is Lisa Glocce. Thanks, Ryan. I would just comment, yes, it's a tough time in Louisiana.
Heart goes out to the community there and just thanks to the team on the ground protecting everyone at site. I just want to reemphasize no confirmed COVID-nineteen cases at Cameron Parish. The construction of the project is 99.5% complete. And as Jeff remarked, continuing to operate Trains 12 and commission Train 3. They're well along.
We're very close to bringing feed guests in, in a month and right now planning for starting producing LNG in June. So we're really close. We've seen no slowdown in activity, and we certainly do not have any indications that our customers would be pursuing any sort of force majeure type claims. In fact, we're in ongoing discussions about an expansion phase for the facility.
Thank you, Lisa. Brian, do
you have other questions?
Yes. And one other question, just in terms of the California CapEx spend, is any of that at risk of potentially being deferred later into the year or next year due to state mandates around working from home?
No, I don't think so.
I think I'll make a couple of comments and pass it to Kevin Segarra. But you need to remember that the rate cases we had last year were kind of rate cases of first impression, and they were labeled risk assessment mitigation phase cases or what we refer to as ramp. And the whole architecture of how we prosecuted those rate cases was to rank order the risk that we were trying to solve in the operating environment. So not only do we get a constructive rate case, we think for our consumers and not only do we get 5 years and 3 years, the way the capital was assigned in that program, it was specifically earmarked to focus on things that improves risk, that improves safety, improves business resiliency and reliability. Kevin, would you like me to make any other comments around the capital plan?
No, thanks that question, Ryan. Utilities have been designated as critical infrastructure providers and our contractors and our suppliers so designated as well. And so far, we're really pleased that all our contractors and all our suppliers are really showing up. And the contractors want to really keep working. And so I think our interests are aligned there.
Obviously, the situation is dynamic and things could change. But to the extent we see disruptions or delays, recall that we received, as Trevor mentioned in his presentation, 2 extra years on our rate case. So we really have 3 years to catch up after 2020 if we need that.
Great. Thank you.
And our next question comes from Jonathan Arnold with Vertical Research Partners.
Hi, Jonathan. Good afternoon. Hi, thanks for taking my call and for all the information. Just a couple of things. 1, did you I think you mentioned that the equity check, the PACO was not a big number, but could you guys sort of could you give us something more specific than that?
Sure. I mean, if you go back to the $1,900,000,000 number and assume gearing of about 60% and you'll have a contribution from your third parties, you'll probably talk about a check-in the neighborhood of $200,000,000 to $300,000,000 for E Inova $200,000,000 to $300,000,000 for Sempra.
Perfect. Thanks a lot. And then just one other, I mean, it seems that the timeframe you're talking about on closing the South America sales is a little later implied than what you said on the earnings call. So could you give us some insights into just what's going on behind the scenes in those processes? And then maybe also talk to how resilient the plan would be in the event that these didn't go through.
How would that change what you're saying about equity? And how would it change your overall thinking around the plan?
Thank you. I mean, I think, there's a lot of uncertainty all across the marketplace, but there are several factors that caused us to have a lot of optimism around South America. The first is that we're in routine contact with our Chinese counterparties. They're very motivated. They routinely say they're committed to close.
And I think the thing that really reflects that is, they're working with us day to day on working through the virtual close requirements of how we would close and fund both of those. But I think to your point, as you get back to this idea that we expect to close both of them on or before the end of April, maybe, Dennis, you could provide some color as to why we think that's the right time window.
Sure. Thanks, Jeff, and thanks,
Jonathan. First, let me
tell you this. I'm really proud of our deal team, both in the United States and Chile and Peru because they've been working nonstop on what obviously is not an ordinary closing process, especially given the travel restrictions. Let me give you some details starting with Chile. As you remember, we announced the deal on October 14th with the sale of the operations to State Grid International Development for $2,230,000,000 And we're clearly at the tail end of closing this international deal. So that's really only 5 months after we started and it obviously includes the impacts of the pandemic.
But just to be clear, we've got all of the approvals necessary in Chile right now. And the only thing that we're waiting for is a final administrative certification from the National Development and Reform Commission or the NDRC in China. And then based on the discussions that I've had and the communications with the senior executives at State Grid, as Jeff said, they remain extremely motivated to close this deal as soon as possible. And they believe that the certification from the NDRC is coming any day now, especially given that the government offices in China are getting back to normal. They've also mentioned that they've gone through this process with the NDRC on previous deals about 11 times and that they've never had a problem.
And they've said publicly that this is the most important deal facing the company today. So given the influence that State Grid has, we feel really good about that. So as Jeff mentioned, we're in the final planning details for a virtual close given the travel restrictions that are still in place. And so I feel really good about where we are in Chile. And then in Peru, just real quickly, remember, we announced the deal on September 30, and that was $3,590,000,000 selling the Peruvian assets to an affiliate of CYPC.
We did have just a week ago on March 15, President Viscara in Peru announced a 15 day national quarantine related to the coronavirus. But we were ready for that. And we've been working directly with the final sign off group that we needed, which was the antitrust agency and the COPI to be able to address this. We've got all of the other required approvals from China, including the administrative NDRC. So the only thing we're waiting for is the antitrust.
And again, our teams have continued to work directly with Endacopy by phone since the quarantine started. And again, both the buyer and Sempra have reached out to numerous government officials to continue to push this deal across the finish line, including communications I've had with the Minister of Economy and Finance, senior staff of the President of the country and the Peruvian ambassador to the United States. So we're working all angles and obviously reminding them that not only is this good for the people of Peru and that it will show that Peru continues to be open for business during this difficult period, but it's also going to bring in a very important source of tax revenue to the country when we close this, which obviously will be an important resource in their fight against the coronavirus. So again, the buyer has stressed the importance of closing this as soon as possible and we've finalized the details of a virtual close. So again, we're 1 step away in each country from closing these two deals.
We've got motivated buyers and we're going to push this across the finish line and get Trevor the $4,700,000,000 to continue to bolster our liquidity and strengthen the balance sheet.
Great. And this is the second half of my question. If that doesn't play out, how does the plan adapt?
Well, I would start by saying that as we walk through in Trevor's presentation, we've got in excess of $8,000,000,000 of liquidity that he itemized for you. We feel good about the strength of our cash flows. We walked through the discussion of the $900,000,000 we expect from Cameron over the next 2 years, and we're going to execute our plan, right. So we feel good about it. But I would also say we have very, very strong contracts.
So as strong of a contract as you like to have with both parties, we feel very good about it. And to be honest with you, Jonathan, we're conveying to you high confidence that in both cases, we're going to close those. So what we're spending our time on now is making sure we execute the close in a way that supports our initiatives going forward.
Okay. Thanks very
much. Appreciate it.
And next will be Paul Patterson with Glenrock Associates.
Just wanted to sort of follow-up on this on the economic outlook that gets. So on Slide 8, you guys have some pretty robust GDP stuff. But as you guys note, that doesn't really include COVID-nineteen. And it does look actually pretty scary, hence, what we're seeing with some of the other LNG players. So I'm just sort of wondering in general, because on Slide 93, I think you guys say that your CapEx is adjustable.
You guys are flexible in some regards with respect to the outlook. And I'm just sort of wondering, could you just give us a little more flavor as to what's your actual sort of economic outlook is with this? I mean, I know that's a tough question because it's kind of new and everything. But just how should we think about the situation if we do get a significant or substantial recession and what your outlook is and what your flexibility is?
Yes. It's really a very good question and obviously quite timely, Paul. I mean, I've said to other folks, we don't have 5 months of good data. We probably don't have 5 days of great data. So obviously, we're all living in a period of uncertainty.
But I'll tell
you, there's a number of things
that our team has discussed that makes us feel very confident about our business prospects.
And I
think I would start with the point that we're under federal guidelines where the work that we do, whether it's at Cameron LNG in Louisiana or the work here in California has been deemed essential energy infrastructure. So permitting is available to us, the workforce is in the field. Kevin Segar has reiterated several times about how much work is getting done at SDG and E. And look, you're talking about utility workers, and I use this metaphor, they want to run the gunfire, right? These are not people that shirk from a challenge in front of us, And we understand the role that we need to play.
That's not true of a lot of other industries. I mean, there's industries out there, there are travel industries or hotel industries. We actually have a designation that gives us special responsibilities. I think one of the things I'd convey to you is, you should expect the Sempra leadership team and our employees to lean into it. 2nd, I would say that we have a plan that's focused on critical work to society.
So in the capital plan we described, 85% of it is U. S.-based utilities. And it's directly targeting things that came right out of that ramp program in California around resiliency and safety. So our goal is to take risk out of the operating environment, and we've really been sanctioned to go do that work. So I think the nature of what we're doing for society is important.
And then 3rd, I have to give credit to the utilities and the work that they've done, particularly in 2019. So Paul, think about the legislation in California that backstopped wildfire risk. Think about getting 2 different rate cases finishes. Think about rolling the parent credit lines, rolling the California credit lines, rolling EONOVA's credit lines. And even yesterday, FERC announced a brand new decision that added another 55 basis point increase to San Diego's cost of capital, which is now officially 10.6 for all its transmission investments.
So it's a combination of these things that make us feel confident about it. So what I don't want to do is convey to you any type of false confidence because you're right, There's a fair amount of uncertainty. But as you think about all the different places you can invest your time and your resources, I think the American utility policy generally and specific public policy today given what we're going through. So I would just conclude and say, we feel good about the industry. We feel good about the certainty that recent regulatory decisions, bring to our spending levels.
And we feel really good about the nature and focus of our capital program on things that benefit society like safety, resiliency and reliability.
Okay, great. I think the rest of my questions have actually been answered. Thanks
a lot.
And our next question comes from Alejandra Chivas with Credit Suisse.
Thanks for taking my question. Just thinking about the LNG business and specifically about ECA, you seem to be very optimistic in obtaining the scenario permit and to reach FID. Thinking about pessimistic scenarios, what would you say is the likelihood you see for further delays in FID for the project considering the challenging situation at the moment?
Thank you. I just want to make sure I understand your question correctly. I think what you're asking is, how do I feel about handicapping ECA going forward, given the delays that have been experienced in having the scenario permit issued? Is that the nature of your question, Alejandro?
Yes, that's correct.
Okay. Thank you. Well, I mentioned this earlier, and I think for those of you who have followed our company for a long period of time, we take a very conservative approach to building our capital program. In this case, we've departed from our convention and put a project in there that has not been fully approved from a governance standpoint within Sempra. And that's the $1,900,000,000 of capital associated with ECA.
I've also indicated, however, that you'll see us be very disciplined in terms of how we execute. So Justin Bird is leading the commercial negotiations to finalize the SPAs, And both Dennis Areola and Tanya and Karl Therese have been working both with the U. S. Government and the Mexican government to help make sure that we're in a position to get the export permit approved. But here's the challenge.
This is the 1st export permit to ever come before the Mexican government. So this is an issue of first impression layered on top of a government which is obviously right now focused on the health issues of Mexico, just like our government is focused on it. So there are going to be things that create a little bit more challenge. What actually causes us to be optimistic though is the fact that Baja California is a growth market. It is largely isolated, both electrically and from a natural gas standpoint from Mainland Mexico.
And part of what we've tried to do is make sure that we step up to the responsibility to view an economic development opportunity in Baja is strongly supported by the Governor, Jaime Bonilla, who is also from the Moreno Party. And I think what we want to do is make sure that as we go down there, we're not just trying to build a facility to export Texas gas. We're trying to become a bigger part of the community and make sure that we can use American Natural Gas to expand economic opportunity in Baja. At the end of the day, one of the reasons we feel strong about our presence in Mexico generally all across the ANOVA is Tanya and Carlos are leading an effort that allows us to raise the standard of living from Mexico. At every turn, we're trying to do what's best for the country.
And I think over a long period of time, that has been a successful strategy for us over the last 20 years.
Understood. Very clear. Thank you.
Thank you very much for joining us.
And our next question will come from Kerry St. Louis with Fidelity.
Hi, Kerry. Thank you for hanging in there with us.
No problem. I just wanted to go over your cash balance. When I'm looking at the slide, it seems like your cash balance is up over $3,000,000,000 currently, which is quite an increase from the end of the year when it was just at $100,000,000 So could you explain how the cash balance has increased so much?
Sure. I'll start, Karen, and I'll pass it over to Trevor. But I would say that over a long period of time, particularly started in 2019, we want to make sure that we had adequate liquidity for what we knew would be a very large capital program. And as we've executed going forward, we wanted to make sure that no matter what market disruptions we were seeing, particularly in the CP marketplace, we are building adequate liquidity. And Trevor, perhaps you could walk through how we're thinking about that cash balance relative to our commercial paper and what our goals are going forward in terms of liquidity.
Yes, sure, Jeff. And hey, Carey. So as Jeff said, as we started seeing the health crisis unfold, and we started seeing a little bit of a disruption in the short term liquidity markets. We work with some of our relationship banks to put in some short term not revolvers, but some short term term loans for about $1,700,000,000 that we were able to put in place. And really what we're trying to do is ensure that we have access to pay down that CP as it matures in the ensuing call it 4, 5, 6 weeks, just because what we were seeing was a little bit of a disruption the markets and being able to place commercial paper beyond just overnight.
And so what we wanted to do was use both the term loans and any other capacity that we had. And so where we've ended up right now is you're right, we do have about, call it, dollars 3,200,000,000 of cash at the Sempra consolidated entities right now. And we'll be using that cash to pay down CP, assuming that the CP markets will still remain disruptive. That still leaves over $3,000,000,000 of available capacity under our revolvers, and that's excluding Encore. Encore has their own facility, and that's what's giving rise to the $5,000,000,000 of remaining revolver capacity with $3,000,000,000 of cash.
And then of course, don't forget, we've got the 4,700,000,000 dollars that will be coming in from the sale of South America. So we just wanted to be very defensive here given the size of this crisis and then ensure we had appropriate liquidity.
So can I just clarify, I mean, that's a huge amount of cash increase from the $100,000,000 at year end to $3,700,000 So it sounds like you've got these 2 or some new term loans for $1,700,000 But that still would suggest that you generated $2,000,000,000 in cash or did you also further draw upon your bank lines, your master credit facilities as well?
Yes. And I think, Carrie, you've done a good job of going back to look at what the closing balance sheet was on December 31. Obviously, the situation we're currently in now is dramatically different. So I think the way I would approach it is to say that in an ordinarily functioning market, there would be a stigma associated with using your credit lines and I think we would all appreciate that. In the market we're in now, I don't think there's a precedent over the last 100 years where we've gone through this.
And I think the way we've approached it is, we refreshed our credit lines in 2019 for 2 purposes. Number 1 was to make sure that we could backstop a fairly constructive CP program. We've encountered challenges in our CP program and we've been managing bond maturity. So what you've seen us do is, to Trevor's point, is take a defensive position, build cash to meet not only our near term needs, but even put ourselves in a position, quite frankly, that if there was disruptions in the CALFA markets, we could run this business through the middle part of next year. So I think what you've seen us do in unprecedented times is I think build a liquidity position, which is differential to other companies in our industry.
And it's one of the reasons that we feel good about our business prospects is we've got the short term liquidity we need and we've got basically a plan that we think we can execute on. It's really focused on things which are directly important in our
society. Okay. I appreciate that. I'm not challenging whether or not your decision to draw on the bank line. But just looking at the numbers, it seems like you either generated just a tremendous amount of cash or you have drawn partially on your master credit facility.
So I'm just trying to confirm that.
Yes. Carrie, I would say, what we did is we took until we put those term loans in place, we took evasive action to ensure we had sufficient cash to pay down the CP that was there. And as we're paying down CP, it opens up the credit lines again. But we did not draw all the credit lines down. We just tapped into those lines on a little bit to sufficiently cover the CP that was maturing.
And that's the reason that's important, Carrie, as you know as well as we do is, as he pays back that CP, you'll see the available LC side goes back up, right, as we take care of that over next 4 or 5 weeks.
Yes. Thank you very much.
Appreciate it. Thanks for the call.
And we have one question from that will take us through the last question. This will come from Barclays from Shunjoy Banerjee. He was asking about where do you see consolidated FFO or debt going through 2024? Would
you think it to be higher than 16% over the long run? Thanks. Would you go ahead and take that please, Trevor?
Sure, Jeff. Yes, thanks for the question. Certainly, we are targeting to try to get the FFO to debt metrics under calculation to 16% by the end of this year. And then given all the things that are happening with regards to the excess cash coming in from South America, the cash coming in from Cameron, it would be well in excess of the 16% on a prospective basis out into the
future. And
that does conclude
expressing my appreciation actually to 2 different audiences that joined us for today's call. First, to the investment community, we appreciate your flexibility in adjusting from an in person conference late in the day to a webcast and hanging in there with us late in the afternoon. I know for those of you who are in New York and the East Coast, we understand that this is a time of tremendous uncertainty. We know you have a lot of options in terms of where you invest your time and resources. At Sempra, as we conclude today's business discussion, I want you to know that you can count on us to do the right thing, to champion our people at every turn and to use today's market as an opportunity to continue shaping the future.
This at the end of the day is a mission led company and one of the key takeaways from this conference is that our mission has only become more important. And note too that our values don't change when the markets change. We're committed to being good stewards of your investments over the long term and we have a track record that demonstrates just that. Thank you very much for joining us. And second, to the leaders and employees from all across Sempra who have joined our call, I want to say thank you on behalf of your senior management team and our Board of Directors.
We all count at Sempra. What you do matters. At times like this, we're all in it together with the goal of shining bright blue in all the communities that we serve. Most of all, keep yourselves safe, protect your families and work every day to stand tall in our communities. Thank you all.
This concludes today's call And feel free to reach out to our IR team with any additional questions.
Thank you. That does conclude today's conference. We do thank you for your participation. Have a wonderful day.