By David Perez - Own work, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=24440647
A San Francisco attorney said a recent proposal by two major investors to restructure Sempra Energy needs overhauling itself.
Shareholders Elliott Management and Bluescape Resources last week made a presentation to Sempra calling for an overhaul of the San Diego-based company's board of directors and a review of all of its business operations.
Discussing the 48-page Sustainable Sempra presentation, Earthjustice attorney Matthew Vespa noted the utility's use of ratepayers' monies to invest in companies outside California.
“The thrust of it seemed to suggest Sempra as a company sort of overly diversified and it should sell some of these things and get back to its core profitable businesses, which in this case they pointed to its California utilities,” Vespa said. "In my mind, I thought it was very short-sighted because the world is moving toward decarbonization and looking at short-term profits may be sacrificing the long game.”
Earthjustice attorney Matthew Vespa
Even the presentation title is off, according to Vespa, who said when he saw the label Sustainable Sempra, he thought “it might be more or less a sustainable type of business from an environmental standpoint," because Sempra as a company is very natural gas-focused and very fossil fuel-oriented, and the notion that it can be profitable by focusing on San Diego Gas & Electric (SDGE) and SoCalGas.
“I really disagreed with that, especially because SoCalGas is a fossil fuel company and California is decarbonizing,” he added.
Times are changing and so should Sempra, according to Vespa, who said California is also looking at getting rid of gas heating and electrifying buildings to pull energy from lower carbon grids
“I think Sempra as a company should focus more on zero-emission technologies and less on gas for future business and not so much double down on SoCalGas,” Vespa said.
Sempra has admitted to facing challenges due to California’s decarbonization policies, he said.
“That is nowhere acknowledged in this presentation,” Vespa said. “It seems they were not really thinking through a future business model that is profitable, and I think one that is so heavily focused on fossil fuels should raise a lot of red flags with investors.”