Sempra Energy: Strategic Growth and Valuation Justify Buy Rating Despite Wildfire RisksWe are constructive on Sempra’s share performance over the ~12-18 months as it continues to prioritize incremental investment in Sempra Texas. Given the company’s California exposure, it has some exposure to wildfire risk, which the market has inherently (and justifiably) discounted from a valuation perspective. However, we believe the wildfire/CA discount applied to Sempra is overly burdensome, especially as its service territory is far less prone to these catastrophic blazes relative to its California utility peers (i.e. EIX, PCG). While state lawmakers recently re-wrote/ proposed three bills aimed at combating rising energy costs (HERE), which included a revision to SB 254, the bill addressing the funding mechanisms for transmission and wildfire prevention, we view the associated benefits as less meaningful to the company’s longer-term Oncor plans.