Voss Capital Urges Sempra to Spin Off Oncor

Voss Capital, a Houston-based activist hedge fund that holds about two million Sempra shares, urged Sempra Energy in a letter to investors to separate its Texas transmission unit, Oncor. Voss estimated an independent Oncor could be worth as much as $78 billion by the end of 2028 and argued Sempra’s current structure hides the utility’s value.

The firm noted Sempra groups three distinct operations under one parent: its California utility business, Oncor in Texas and Sempra Infrastructure’s liquefied natural gas export projects. Voss wrote that combining those businesses makes it harder for investors to assess each asset on its own and that Sempra’s roughly 80% stake in Oncor could be worth more than the market assigns to the combined company.

Oncor supplies electricity to more than four million homes and businesses across Texas over a network exceeding 144,000 miles of transmission and distribution lines. Sempra acquired its controlling interest in Oncor in 2018 in a transaction valued at $9.45 billion.

Voss highlighted Oncor’s concentration in Texas and a regulatory framework that reduces exposure to the wildfire liabilities that have affected some California utilities. The firm pointed to predictable capital spending tied to regulator-approved grid expansion projects that support population and economic growth in Texas.

Investor interest in electricity and utility assets has grown as demand for data centers, artificial intelligence infrastructure and industrial electrification increases. The Electric Reliability Council of Texas projects peak electricity demand will rise in the coming years, creating pressure on grid operators and transmission providers to expand capacity.

Voss forecasted that accelerating electricity demand in Texas and a large pipeline of approved infrastructure projects could lift Oncor’s standalone valuation to as much as $78 billion by the end of 2028. The firm has increased its shareholder campaigns in recent years, previously pressing for changes at Griffon Corp and PAR Technology.

Neither Sempra nor Oncor provided a public comment on the activist proposal.