Q2 2020 Earnings Call
[music].
Greetings and welcome to the New Jersey resources fiscal 2022nd quarter earnings call. All participants will be unless you're not mean that should you need assistance. Please signal coughing, especially with my personal Starkey followed by Europe.
After today's presentation, you will be an opportunity to ask questions to ask your question in your press Star then one on your touched on that.
Your question. Please press Star then too.
Please note this event is being recorded.
Now, let's turn the conference haven't you Dennis <unk> head of Investor Relations. Please go ahead.
Oh, Thanks, Nicole Good morning, everyone welcome to New Jersey Resources second quarter fiscal 2020 conference call webcast I'm joined here today by Steve Westhoven, our president and CEO, Pat Migliaccio, or senior Vice President Chief Financial Officer, as well as other members of our senior management team.
You know certain statements in today's call contain estimates on other forward looking statements within a meeting other securities laws.
Russia caution listeners on the call that current expectations assumptions and beliefs.
Forming the basis for forward looking statements include many factors that are beyond our ability to control our estimate precisely this could cause results to materially differ from our expectations I found on slide one.
These items can be found and forward looking statements section.
Today's earnings release first on form 8-K, and in our most recent form 10-K, and Q as filed with the FCC.
We do not by including the statement the same any obligation to review or revise any particular forward looking statement referenced here in light of future events.
Well also be referring to certain non-GAAP measures such as net financial earnings are NFC, we believe that NFC pride to more complete understanding of our financial performance. However, it is not intended to be a substitute for gap.
Our non-GAAP financial measures to discuss more fully item seven of our 10-K.
Our agenda is found on slide two.
Steve will begin today's call with highlight for the quarter, followed by Pat who will review our financial results. Then we'll open the call up to your questions.
The slides accompanying today's presentation are available on our website and where furnished on form 8-K filed this morning, but that said I'll turn call over to our president and CEO, Steve Westhoven Steve.
Thanks, Dennis and good morning, everyone. Thank you for joining us today.
Devastating impact of covert 19, just felt around the globe cross or state and in our communities. Our thoughts are with all those has been affected.
This is unlike anything we've ever experienced everyday our team rises to the occasion with professionalism and hard work without interruption, we've maintained our ability to deliver safe and reliable natural gas service to our customers.
As we navigate these unprecedented times one thing remains clear the health and safety of our employees and our customers remains our top priority.
In early March we implemented our business continuity plan and now nearly half of our team is working remotely.
Our essential employees, such as our first responders distribution mechanics service technicians continue to assist customers that their homes and businesses, all while falling robust safety protocols.
To protect employees and customers, we're limiting the potential for exposure by strictly following CDC and state guidelines.
Maintaining social distance and wearing appropriate personal protective equipment when entering a home order business.
We suspended disconnections to ensure a customers have continued natural gas service and weve weight late fees and for customers experienced hardships, we're providing energy assistance in the form of grants to help them with their energy bills.
We also recognize the impact of Cobot 19 is having on our communities, especially the most vulnerable.
It's why we donated $125000 to community food banks that are delivering meals to thousands of residence Inn need.
Additionally, through the United way, we donated funds to support first responders victims of domestic violence as well as our local businesses.
Given the critical services, we provide we have not experienced a fundamental change to our core operations. We continue to provide service to over 550000 utility customers and construction in our large scale infrastructure projects are moving forward at New Jersey, natural gas and Jr. Clean energy ventures, and NGL midstream.
To successfully execute our strategic priorities, we have focused on making sure NJ. Our has access to capital in April we entered into a new $250 million credit facility to further enhance our liquidity.
While Kogan 19 has created some economic uncertainty in new Jersey and across the nation. The fundamentals of our business remains strong and we're committed to meeting expectations of our employees customers communities and shareowners.
Moving to slide four we are reaffirming our fiscal 2020 NFC guidance range of two of five to 215 per share. Despite the performance of NJ our energy services.
Our utility business will now account for 61% to 65% of total NFC, an increase from our previous estimate of 50% to 62% and NJ, our midstream will continue to contribute 10% to 15%.
On the unregulated side clean energy ventures will now contribute 27%, 32% of total NFC, an increase from our previous estimate of 25% to 30%.
We adjusted the expected contribution from energy services year to a range of zero to negative 5% due to the continued challenging market conditions.
While we're disappointed with the current results for energy services, we remain committed to the business.
These results were caused by unique situation combination of one of the warmest winters on record and operational issues in one of our key pipelines that limited our ability to hedge our physical assets the way that we typically do.
Potential disruption risk, reducing the volume of physical gas, we could deliver in the winter and consequently energy services did not hedge office capacity ultimately this long capacity position and warm weather drove capacity values lower resulting in energy services, losing value on unhedged assets.
Under normal circumstances, we don't comment on expectations for energy services. However, at this time I thought it was important to share details.
We are taking actions to reduce the risk profile for energy services in the future we've reduced our demand charges. We've also taken steps to reduce selling expenses and we continue to seek opportunities to optimize the value of certain contractual storage and transportation agreements within our portfolio.
Moving to slide five we illustrate how weather patterns have impacted energy service performance over the last three years on the top of the page we show heating degree days in the northeast during the winter months with 2018, reflecting consistent cold winter weather on the bottom chart, we show the resulting price differentials between Tetco mtwo.
Great a proxy for our main market areas and telco onto a proxy for our main production areas.
During 2018 sustained cold weather generated significant pricing differentials that energy services was able to capitalize on.
In contrast in 2019, and especially in 2020 unusually warm weather depressed the geographic spreads limiting market opportunities to capture value within our portfolio due to the location or timing differences.
Looking to the next fiscal year with the drop off of demand due to covert 19 in the Gulf Glut of gas supply we've seen a widening the summer winter spreads it hasn't existed for some time. This is creating a constructive environment for energy services heading into fiscal 2021.
Moving to slide six we still expect to achieve our NFC guidance range of two five to 215 per share.
The impact of energy services performance compared to our prior guidance can be up to 14 cents lower per share.
New Jersey natural gas is expected to add nine cents of uplift mostly related to own m. savings and OPEB.
And Cvs expected that five cents, mostly from tax efficiencies and safe harboring safe harboring of investment tax credits.
These changes are expected to allow us to maintain our NFI guidance range fiscal 2020.
Moving to slide seven I'll cover some highlights starting with New Jersey natural gas.
We added over 4300, new customers. So far this year keeps us on track to reach our targets of 1.8% annual customer growth and adding between 28000 to 30000, new customers over the next three years.
The southern reliability link continues to progress with over 70% of construction complete and we expect the project to be placed into service in 2021.
At injury, our midstream we completed the acquisition of Adelphia Gateway this quarter and we're actively working with the Pennsylvania DP two obtained final permits needed to file for the FERC notice to proceed.
This is required to add compression in new laterals to the southern portion, we expect to southern portion of Adelphi gateway to be in service in 2021.
And we wait ruling on Penn East and remain committed to the project US Supreme Court directed New Jersey to respond to a petition submitted by the pennies partnership will provide updates when they become available.
On slide eight I'd like to update you on recent developments and solar market on April Thirtyth, New Jersey close the legacy aspect market transition to a new T. Rex market. The T. Rec market will continue to provide opportunities CV as projects will now qualify for fixed priced $152 for T. Rex for 15 years old.
At a price volatility.
Fixed price nature of the Trx market will promote more stable solar development, New Jersey and help the state achieve its clean energy goals. We look forward to continue investment in New Jersey solar market.
Turning to slide nine CV had another productive quarter, adding 20 megawatts of incremental capacity. We are on track to place eight commercial solar projects into service. This year. The sunlight advantage our residential solar program added 156, new customers in fiscal 2020.
I'd like now to turn the call over to Pat for some more detailed look at the financials.
Thanks, Steve Good morning, everyone.
Turning to slide 11, we've taken two significant steps to improve our liquidity profile.
In April we priced an additional $385 million of long term debt.
Mainly to provide financing for the lever and Adelphi gateway acquisitions under other infrastructure projects.
We expect to receive $260 million didn't GR and $125 million within JG during fiscal year 2020 subject to customary signing and closing conditions.
Also in April we entered into a new $250 million 364 day credit facility.
Once we account for the new facility and long term financing our liquidity position becomes even stronger.
On slide 12, we show our debt maturity schedule.
As you can see from the chart on the right and assuming signing and closing over recently price notes, we effectively moved most of our near term maturities.
Slide 13 shows the main drivers behind our quarterly NFI changes.
During the second fiscal quarter of 2020, Agero reported NFI of 107 million or $1.12 per share compared to 112.4 million dollar for dollar 27 per share in 2019.
You are due to natural gas and home services and other saw NFI improvements quarter on quarter.
And JG increased to 17.8 million during the quarter, mainly due to higher base rates, but also lower end rigs over and am expenses.
Home services and other increased 4.7 million due to lower over them.
And then you services face continuing challenging market conditions through the unusually warm winter we experienced this fiscal year.
CV was down 5.7 million, mostly due the timing of district sales, which will occur in the second half of the year.
Finally, our midstream segment was essentially flat with the operating income generated by the acquisitions of Adelphia and leave river offset by increased interest expense related to those acquisitions.
Slide 14 outlines our capital spending for the first six months of fiscal 2020 in the next three years.
Over the 19 has not had a material impact on our projected capital spend thus far with exception of our residential solar program, which slightly decreased.
Our energy capital program largely continues to progress as planned.
Moving to slide 15, you can see an update on our cash flows and financing projections as I mentioned before we've taken steps to improve our liquidity.
We also have no equity needs for fiscal 2020, and 2021 through the equity offer we completed in the first quarter of this fiscal year.
The results of our Estrich hedging program are highlighted on slide 16.
We've been actively hedging and now have 91% of restaurant revenues hedged for 2022, an increase from 71% when we last reported the data.
Printed years 2023, we're now 22% hedged, we'll continue to monitor market to add to that hedge position.
For many years 2020, and 2021 grew nearly 100% hedged at these ratios are estrich revenues, we largely unaffected by future changes in enterprises.
On slide 17 were providing some additional financial drivers for NJ, Angie and CV broken down by quarter.
Fringy Angie the percentage of utility gross margin earned during the year is heavily weighted to the beginning of our fiscal year, which are the winter heating months illustrating the seasonality of the business.
Approximately 60% of utility gross margin fell in the first two quarters of this year.
Procedure.
We are providing the percentage of Estrich revenues and Itcs, we expect to occur in each quarter for fiscal 2020.
For us Rex revenues heavily weighted to the back half of the year in particular, the fourth quarter, which is when as direct sales typically occur.
Investment tax credits are also weighted towards the fourth quarter with 54% of our itcs occurring them when most of our solar projects, we placed into service.
I'll now turn the call back over to speed.
Thanks Pat.
This has been a challenging time for all of us, but even under difficult circumstances. The fundamentals of our business remains strong we have sufficient financial the credit liquidity across our business lines and our team of dedicated professionals continue to drive the value of our company.
Witnessing our employees bravely carryout their mission through these uncertain times has been inspirational and its stills comp instills confidence that we will emerge stronger than ever. Thank you for joining us today and now we'll open up the call for questions.
We will now begin the question and answer session through asking question Nuclear Star then one on you touched on that.
If you're using speakerphone, please pick up your handset repressing monkeys.
Let me draw. Your question. Please press Star then too and at this time, we'll pause momentarily to assemble the roster.
And our first question today comes from Travis Miller with Morningstar. Please go ahead.
Good morning, Thank you.
Travis wary Travis.
So a couple of quick questions here the.
Weather normalization or decoupling causes how much did that give you back in terms of the weather impact that you had during the quarter.
Travis This is Pat Migliaccio it was as you correctly.
Said, we are decoupled.
So insulated from the warmer than normal weather the utility.
CFP mechanism I believe added a few million dollars this particular quarter.
And more than that for the six months ended March 31 to the tune it makes it close to 10.
Okay.
Good.
And.
On the full there. So I was wondering if you could talk about what you're seeing on supply are you getting this applies when you needed. So what is the supply chain look like.
Is there a difference between the larger projects in the smaller residential just wonder if you could talk a little bit about what you're seeing on the solar supply chain and supply.
Hey, Travis this is Steve so up in regards to the solar market and our construction.
We have purchased I believe all the solar panels that we need for this year. So our supply chain has been uninterrupted.
So all the construction that we have obviously has been plan for quite awhile and we're entering into building up our remaining facilities for the fiscal year as we go through the summer that construction still continues so from our perspective uninterrupted and really business as usual.
Okay, and then one more if I may be.
If you see what's going on and oil market, especially down in Texas. The other the oil basins and potential decline and the associated gas potential increase in gas prices, how does that affect.
The.
Marcellus area in the spreads that you see would have been conceptually if we get a rising gas prices declined in associated gas down south.
Ill that might affect you guys.
Well I think as we alluded certainly you know the disruption in the oil market and what's happening to the producer community down there where you know.
Production has either been halted or drilling programs are being reduced it just leading causing volatility in those markets certainly spreads are wider you've got a shifting of essentially gas moving.
From one area to another gas production.
Moving from winter to the other driving value of storage to be able to balance all this out and certainly.
Creating volatility in the marketplace I think trying to predict exactly how that's going to pulled out it's going to be very difficult at this point in time, but I think the bottom line story of all this is that theres more volatility ahead and unpredictable.
Future for essentially how the salt plays out.
Okay, great appreciate it good day.
Thank you try to drive sales.
And once again, if you'd like to ask your question. Please press Star then one.
And our next question comes from Richard CCRI Daily with Bank of America. Please go ahead.
Hi, good morning, Thanks for taking my questions.
Richard.
Hey, I'm just a quick one back to the solar execution I know.
Most of the ITC recognition as in the back half the year, but anything that you're seeing in terms of demand from customers or ability to execute on specific projects.
And the two age just given the timing impacts in.
Yes.
So some distance and know what have you.
Well I.
Richard you know our construction crews are basically maintaining a social distancing certainly adhering to all the CDC and state guidelines for construction as we said it before certainly the safety of our employees and our customers is of utmost importance.
And then as far as the construction goes the BBU reconfirmed that solar is essential service and that constructions moving forward. So essentially all the projects that we've had planned for quite some time are moving forward and in were.
And we're hopeful that we'll be able to complete those by the end of the fiscal year enriching the only thing I'd add as I mentioned in my script, we did decrease slightly our expectations for sunlight advantage, it's really not a reflection of construction more reflection of.
Our channel partners.
Not being able to get it across some customers homes to do the marketing associated with that as you might imagine.
And once again, if you have the question. Please press Star then one.
And this will conclude our question and answer session I'd like to turn the conference back into Dennis Miller for any closing remarks.
Okay cool. Thank you very much everyone for joining us this morning.
As a reminder.
Replay of this call available on our website and as always we appreciate your interest in investment in New Jersey resources stay safe everyone Goodbye.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
[music].
[music].
Good day and welcome to the New Jersey resources fiscal 2022nd quarter earnings call. All participants will be in listen only mode should you need assistance, please signal cropping, especially with the pressing the star key.
After today's presentation will be an opportunity to ask question.
That's your question. It's like Star then one on your touched on but withdraw your question. Please press Star then too.
That's a bank is being recorded.
During the conference at what you've done it too.
Relational. Please go ahead.
Oh that could call. Good morning, everyone welcome to New Jersey resources second quarter fiscal 2020 conference call webcast I'm joined here today by Steve Westhoven, Our President and CEO family grew out your senior Vice President Chief Financial Officer, as well as other members of our senior management team.
You know certain statements in today's call contain estimates I look forward looking statements within the meaning of the securities laws.
<unk> caution listeners on the call the current expectations assumptions and beliefs.
Forming the basis for forward looking statements include many factors that are beyond our ability to control our estimate precisely this could cause results to materially differ from our expectations. That's found on slide one.
These items can be found and forward looking statements section.
Today's earnings release first on form 8-K, and our most recent form 10-K, and she has filed with the FCC.
We do not by including the statement assume any obligation to review or revise any particular forward looking statement referenced here in light of future events.
Well also be referring to certain non-GAAP measures such as net financial earnings were NFC, we believe that NFC pride to more complete understanding of our financial performance. However, it is not intended to be a substitute for gap.
Our non-GAAP financial measures and discuss 4.7 of our 10-K.
Our agenda is found on slide two.
Steve will begin today's call with highlights for the quarter, followed by pad will review our financial results. Then we'll open the call up to your questions.
The slides accompanying today's presentation are available on our website and were furnished on form 8-K filed this morning, but that said I'll turn call over to our president and CEO, Steve Westhoven Steve.
Thanks, Dennis and good morning, everyone. Thank you for joining us today.
Devastating impact of covert 19, it's been felt around the globe cross or state and in our communities our thoughts.
With all those who've been affected.
While this is unlike anything we've ever experienced every day, our team rises syndication with professionalism and hard work.
Without interruption, we've maintained our ability to deliver safe and reliable natural gas service to our customers.
As we navigate these unprecedented times one thing remains clear the health and safety of our employees at our customers remains our top priority.
In early March we implemented our business continuity plan and now nearly half of our team is working remotely.
Our essential employees, such as our first responders distribution mechanics service technicians continue to assist customers that their homes and businesses all was falling robust safety protocols.
To protect employees and customers, we're limiting the potential for exposure by strictly following CDC and Steve guidelines.
Maintaining social distance and wearing appropriate personal protective equipment, when entering a home or business.
We suspended disconnections to ensure customers have continued natural gas service and we wait late fees and for customers experience hardships, we're providing energy assistance in the form of grants to help them with their energy bills.
We also recognize the impact of Cobot 19 is having our communities, especially the most vulnerable. That's why we donated $125000 to community food banks that are delivering meals to thousands of residence Inn need.
Additionally, through the United way, we donated funds to support first responders victims of domestic violence as well as our local businesses.
Given the critical services, we provide we have not experienced a fundamental change to our core operations. We continue to provide service to over 550000 utility customers and construction in our large scale infrastructure projects are moving forward at New Jersey, natural gas and Jr. Clean energy ventures, and NCR midstream.
To successfully execute our strategic priorities, we have focused on making sure NJ. Our has access to capital in April we entered into a new $250 million credit facility to further enhance our liquidity.
While cobot 19 has created some economic uncertainty in new Jersey and across the nation. The fundamentals of our business remains strong and we're committed to meeting expectations of our employees customers communities and shareowners.
Moving to slide four we are reaffirming our fiscal 2020 NFC guidance range of two of five to 215 per share. Despite the performance of NJ our energy services.
Our utility business will now account for 61% to 65% of total NFC, an increase from our previous estimate of 50% to 62% and engineer our midstream will continue to contribute 10% to 15%.
On the unregulated side clean energy ventures will now contribute 27%, 32% of total NFC, an increase from our previous estimate of 25% to 30%.
We adjusted the expected contribution from managed services year to a range of zero to negative 5% due to continued challenging market conditions.
While we're disappointed with the current results for energy services, we remain committed to the business.
These results were caused by unique situation combination of one of the warmest winters on record and operational issues in one of our key pipelines that limited our ability to hedge our physical assets the way that we typically do.
The potential disruption risk, reducing the volume of physical gas, we can deliver in the winter. Consequently energy services did not hedge August capacity ultimately this long capacity position and warm weather drove capacity values lower resulting in energy services, losing value on unhedged assets.
Under normal circumstances, we don't comment on expectations for energy services. However, at this time I thought it was important to share some details.
We are taking actions to reduce the risk profile for energy services in the future we've reduced our demand charges. We've also taken steps to reduce on expenses and we continue to seek opportunities to optimize the value of certain contractual storage and transportation agreements within our portfolio.
Moving to slide five we illustrate how weather patterns have impacted energy service performance over the last three years.
On the top of the page we show heating degree days in the northeast during the winter months with 2018, reflecting consistent cold winter weather on the bottom chart, we show the resulting price differentials between Tetco and three proxy for our main market areas and tetco onto a proxy for our main production areas.
During 2018 sustain cold weather generated significant pricing differentials that energy services was able to capitalize on.
In contrast in 2019, and especially in 2020 unusually warm weather depressed the geographic spreads limiting market opportunities to capture value within our portfolio due to the location or timing differences.
Looking to the next fiscal year with the drop off of demand due to covert 19 in the Gulf Glut of gas supply we've seen a widening the summer winners spreads it hasn't existed for some time. This is creating a constructive environment for energy services heading into fiscal 2021.
Moving to slide six we still expect to achieve our NFC guidance range of two five to 215 per share.
The impact of energy services performance compared to our prior guidance can be up to 14 cents lower per share.
New Jersey natural gas is expected to add nine cents of uplift mostly related to OEM savings and okay.
Cvs expected that five cents, mostly from tax efficiencies in the safe Harbor and safe harboring of investment tax credits.
These changes are expected to allow us to maintain or NFC guidance range for fiscal 2020.
Moving to slide seven I'll cover some highlights starting new Jersey natural gas.
We added over 4300, new customer so far this year keeps us on track to reach our targets of 1.8% annual customer growth and adding between 20000 30000, new customers over the next three years.
The southern reliability link continues to progress with over 70% of construction complete and we expect the project to be placed into service in 2021.
At NCR midstream, we completed the acquisition of Adelphia Gateway this quarter and we are actively working with the Pennsylvania DP to obtain final permits needed to file for the FERC notice to proceed.
This is required to add compression in new laterals to the southern portion, we expect to southern portion of Adelphi gateway to be in service in 2021.
And we wait ruling on Penn East and remain committed to the project.
Supreme Court directed New Jersey to respond to a petition submitted by the pennies partnership will provide updates when they become available.
On slide eight I'd like to update you on recent developments and solar market on April Thirtyth, New Jersey, close the legacy SRAM market and transitioned to a new T. Rex market. The T. Rep market will continue to provide opportunities. The CV as projects will now qualify for fixed price to $152 per T. Rex for 15 years old.
Emanating price volatility.
Fixed price nature of the Trx market will promote more stable solar development, New Jersey and help the state achieve its clean energy goals. We look forward to continue investment you Jersey solar market.
Turning to slide nine CV had another productive quarter, adding 20 megawatts of incremental capacity. We're on track to place eight commercial solar projects into service this year.
Sunlight advantage, our residential solar program added 156, new customers in fiscal 2020.
I'd like now to turn the call over to path for some more detailed look at the financials.
Thanks, Steve Good morning, everyone.
Turning to slide 11, we've taken two significant steps to improve our liquidity profile.
In April we priced an additional $385 million of long term debt.
Only to provide financing for lever and Adelphi gateway acquisitions under other infrastructure projects.
Expect to receive $260 million LNG are under $25 million and then JG during fiscal year 2020 subject to customary signing and closing conditions.
Also in April we entered into a new $250 million 364 day credit facility.
Once we account for the new facility and long term financing our liquidity position becomes even stronger.
On slide 12, we show our debt maturity schedule.
As you can see from the chart of the right and assuming signing and closing over recently price notes, we effectively moved most of our near term maturities.
Slide 13 shows the main drivers behind our quarterly NFI changes.
During the second fiscal quarter of 2020, Agero reported NFI of 107 million or $1.12 per share compared to 112.4 million dollar for dollar 27 per share in 2019.
Due to natural gas and home services and other saw NFI improvements quarter on quarter.
JG increased to 17.8 million during the quarter, mainly due to higher base rates, but also lower MX own am expenses.
Services, another increase 4.7 million due to lower over them.
How are you services face continuing challenging market conditions through the unusually warm winter we experienced this fiscal year.
CV was down 5.7 million, mostly due the timing of restaurant sales, which will occur in the second half of the year.
Finally, our midstream segment was essentially flat with the operating income generated by the acquisitions of Adelphia at least river offset by increased interest expense related to those acquisitions.
Slide 14 outlines our capital spending for the first six months of fiscal 2020, and the next three years.
Over 19 has not had a material impact on our projected capital spend thus far with exception of our residential solar program, which slightly decreased.
Our end JG capital program largely continues to progress as planned.
Moving to slide 15, you can see an update on our cash flows and financing projections as I mentioned before we've taken steps to improve liquidity.
We also have no equity needs for fiscal 2020, and 2021 through the equity offering we completed the first quarter of this fiscal year.
The results of our historic hedging program are highlighted on slide 16.
We've been actively hedging and now have 91% of restaurant revenues hedged for 2022, an increase from 71% when we last reported the data.
Printed years 2023, we're now 22% hedged, we'll continue to monitor market to add to that hedge position.
For years 2020, and 2021 grew nearly 100% hedged at these ratios are estrich revenues, we largely unaffected by future changes in enterprise.
On slide 17 were providing some additional financial drivers for NJ, Angie and see the broken down by quarter.
Rest Rex revenues heavily weighted to the back half a year in particular, the fourth quarter, which is one aspect sales typically occur.
Vesmen tax credits are also weighted towards a fourth quarter.
4% of R.I.T. sees occurring then when most of our solo projects, we placed in the service.
And that's where the call back over to Steve.
Thanks Pat.
It's been a challenge in time for all of us, but even under difficult circumstances. The fundamentals of our business remains strong we have sufficient financial the credit liquidity across our business lines and our team a dedicated professionals continues to drive the value of our copy.
Witnessed seen our employees bravely carry out their mission through these uncertain times, it's been an inspirational and instills cop instills confidence that we will emerge stronger than ever. Thank you for joining us today and now will open up the call to questions.
We will now begin the question of Nancy session. You had some question you nuclear star than one on your touched since then.
If you're using a speaker phone please pick up your handset for pressing the keys you withdraw. Your question. Please print stars into that this time real positive entirely to assemble the roster.
And our first question today comes from Travis Miller with mornings or please go ahead.
Good morning, Thank you.
<unk>.
So a couple of quick questions here, the the weather normalization or decoupling cause it how much did that give you back in terms of the weather impact that you had during the quarter.
<unk> It was as you correctly.
Said, we are decoupled and so insulated from the warmer than normal whether the utility.
CFP mechanism I believe added a few million dollars, the <unk> particular quarter and more than that for the six months ended March 31 to the tune it makes it close to 10.
Okay.
Good.
[noise].
And.
No solar so I just wonder if you could talk about what you're seeing.
On supply or <unk> are you getting that's boys when you need it's what is the supply chain look like.
Is there a difference between the larger broderick's and the the smaller residential just one or if you could talk a little bit about what you're seeing on them.
Solar.
Supply chain and supply.
<unk> so in regards to the solar market and you know our construction. We have you know purchased I believe all the solar panels that we need for this year. So our supply chain has been uninterrupted. So all the construction that we had obviously spent plan for quite awhile and you know we're entering.
Into building our remaining facilities for the fiscal year as we go through this summer that construction still continues so from our perspective uninterrupted and a and really business as usual.
Okay, then one more if I may be it if you see what's going on in the oil market, especially down in Texas. The other the oil basins and potential decline in the associated guess potential increasing gas prices how does that affect.
<unk>.
Marcel this area and the the the spreads that you see would then conceptually if we get a rising gas prices decline in associated guess down south.
That might affect your eyes.
Hmm.
Well I think as we alluded you know certainly yeah. The disruption in the oil market and you know what's happening to the producer community down there where you you know production is either being halted at war really programs are being reduced it just leading causing volatility in those markets certainly spreads her wider.
You've got a shifting of essentially gas movie you know from one area to another gas production you know moving from winter to the other driving value of storage to be able to balance all this out and certainly trading volatility in the marketplace. I think trying to predict exactly house is going to fold out it's gonna be very.
Difficult at this point in time, but I think the bottom line story of all this is that there's more volatility ahead and unpredictable you know future for essentially how the soft place out.
Okay, great appreciate it I'm good day.
<unk>.
And once again, if you'd like to ask a question. Please press Sars in one.
And our next question comes from Richard C. Zero really with Bank of America. Please go ahead.
Hey morning, Thanks to take my question.
<unk>.
Yeah, I'm, just a quick going back to the smaller execution and I know most of the I.T.C. recognition as in the back half the year, but anything that you're seeing in terms of a demand from customers or ability to execute on the project <unk>.
And to to H., just given the the kind of it impacts in.
<unk>.
<unk>.
Well I.
Richard you know our construction crews are basically maintaining a social distancing certainly at hearing to all the C.D.C. and state guidelines for construction as we said it before you know certainly the safety of our employees in our customers is of utmost importance and that as far as the construction goes the P.P.U.
Reconfirmed at you know solar is essential service in that constructions moving forward. So essentially all the projects that we've had plan for quite some time are moving forward and a and we're and we're hopeful that we'll be able to complete those you know by the end of the fiscal year enriches. The only thing I'd add as I mentioned my script.
We did decreased slightly our expectations for sunlight advantage, it's really not a reflection of construction more reflection of are channel partners, not being able to get it across some customers homes to do the marketing associated with that as you might imagine.
And once again, if you have the question please press stored them alone.
And this will conclude or question unanswered question I'd like to turn the conference back instead, it's pretty much recording Lords.
Okay cool. Thank you very much everyone for joining us this morning.
As a reminder, a replay of this call's available our website and and it's always we appreciate your interest in investment in New Jersey resources stay safe everyone to buy.
Because this is not included thank you for attending today presentation, you mean I'll just connect your life. So.