Full Year 2023 New Jersey Resources Corp Earnings Call
Speaker 1: Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the New Jersey Resources Fiscal 2023 Fourth Quarter and Year End Conference Call and Webcast.
Hello, and thank you for standing by my name is Regina and I will be your conference operator today at this time I would like to welcome everyone to the New Jersey resources fiscal 2023 fourth quarter and year end conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be.
Speaker 1: All lines have been placed on mute to prevent any background noise.
Speaker 1: After the speaker's remarks, there will be a question and answer session.
A question and answer session, if you'd like to ask a question. During this time simply press Star then the number one on your telephone keypad, if you'd like to withdraw your question Press Star One again I would now like to turn the conference over to Adam Prior director of Investor Relations. Please go ahead.
Speaker 1: If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. I would now like to turn the conference over to Adam Pryor, Director of Investor Relations. Please go ahead.
Speaker 2: Thank you so much. Welcome to New Jersey Resources fiscal 2023 fourth quarter and year-end conference call and webcast. I'm joined here today by Steve Westhoven, our president and CEO , Roberto Bell, our senior vice president and chief financial officer, as well as other members of our senior management team.
Thank you so much welcome to New Jersey resources fiscal 2023 fourth quarter and year end conference call and webcast I'm joined here today by Steve <unk>, our president and CEO sort of Bell, our senior Vice President and Chief Financial Officer, as well as other members of our senior management team.
Speaker 2: Certain statements in today's call contain estimates and other forward-looking statements within the meaning of the securities laws. We wish to caution listeners of this call that the current expectations, assumptions, and beliefs forming the basis for our forward-looking statements include many factors that are beyond our ability to control or estimate precisely.
Certain statements in today's call contain estimates and other forward looking statements within the meaning of the securities laws, we wish to caution listeners of this call that the current expectations assumptions and beliefs, forming the basis for our forward. Looking statements include many factors that are beyond our ability to control or estimate precisely this could cause results to materially differ from our expectations.
Speaker 2: This could cause results to materially differ from our expectations as found on slide one.
And on slide one.
Speaker 2: These items can also be found in the forward-looking statement section of today's earnings release, furnished on Form 8K, and in our most recent forms, 10-K and 10-Q as files of the SEC.
These items can also be found in the forward looking statements section of today's earnings release furnished on form 8-K and in our most recent forms 10-K and 10-Q as filed with the SEC.
Speaker 2: We do not by including this statement assume any obligation to review or revise any particular board-ridden statement referenced herein and light a future event.
We do not by including this statement assume any obligation to review or revise any particular forward looking statements referenced herein in light of future events. We will also be referring to certain non-GAAP financial measures such as net financial earnings or NFC, We believe that NFC net financial loss utility gross margin financial margin adjusted funds from.
Speaker 2: We will also be referring to certain non-GAAP financial measures, such as net financial earnings or NFE. We believe that NFE, net financial loss, utility gross margin, financial margin, adjusted funds from operation, and adjusted debt provide a more complete understanding of our financial performance. However, these non-GAAP measures are not intended to be a substitute for GAAP. Our non-GAAP financial measures are discussed more fully in item seven of our 10-K.
Operations and adjusted that provide a more complete understanding of our financial performance. However, these non-GAAP measures are not intended to be a substitute for GAAP or non-GAAP financial measures are discussed more fully in item seven of our 10-K.
Speaker 2: The slides accompanying today's presentation are available on our website, and were furnished on our form 8K file this morning. Our agenda for today is found on slide 4. Steve will begin with this year's highlights, followed by Roberto, who will review our financial results. Then we will open the call up for your questions. With that said, I will turn the call over to our President and CEO , Steve Westhoven. Please go ahead, Steve.
The slides accompanying today's presentation are available on our website and were furnished on our form 8-K filed this morning, our agenda for today is found on slide four Steve.
Steve will begin with this year's highlights followed by Roberto who will review our financial results. Then we will open the call up for your questions.
I will turn the call over to our President and CEO, Steve Watson. Please go ahead Steve.
Speaker 3: Thanks, Adam, and good morning everyone. Fiscal 2023 represented another solid year in NJR, as we reported earnings well in excess of our industry-leading 79% long-term growth rate.
Thanks, Adam and good morning, everyone fiscal 2023 represented another solid year, and then Jr. As we reported earnings well in excess of our industry, leading 7% to 9% long term growth rate.
Speaker 3: Our performance this past year speaks to the strength of our diversified business model and our ability to adapt to challenges in ways that benefit our customers and our investors.
Our performance this past year speaks to the strength of our diversified business model and our ability to adapt to challenges in ways that benefit our customers and our investors.
Speaker 3: This morning, we reported fiscal 2023 net financial earnings per share of $2.70. This is at the top end of our revised guidance range, which was increased by 20 cents back in the first quarter.
This morning, we reported fiscal 2023 net financial earnings per share of $2 70.
This is at the top end of our revised guidance range, which was increased by 20 <unk> back in the first quarter.
Speaker 3: We've accomplished quite a bit this year, New Jersey natural gas added 8800 new customers with expansion throughout New Jersey natural gas service territories as our customer growth has returned to pre pandemic level.
We've accomplished quite a bit this year, New Jersey natural gas added 8800, new customers with expansion throughout New Jersey natural gas service territories as our customer growth has returned to pre pandemic levels.
Speaker 3: Clean energy ventures grew its project pipeline to the highest level in our company's history, and we increased our in-service capacity by the largest amount for any given year.
Clean energy ventures grew its project pipeline to the highest level in our company's history.
And we increased our in service capacity by the largest amount for any given year.
Speaker 3: At S&T, Adelphia Gateway completed its first full year in operation, and Leif River continued to deliver strong results.
At S&P Adelphia Gateway completed its first full year in operation.
And leaf river continued to deliver strong results.
Speaker 3: And finally, energy services once again delivered outperformance during periods of volatility during the year.
And finally energy services once again delivered to outperformance during periods of volatility during the year.
Speaker 3: As strong as this fiscal year 2023 performance was, we have been more enthusiastic about our future.
As strongest as fiscal year 2023 performance was we have been more enthusiastic about our future.
Speaker 3: The details of our guidance for fiscal 2024 are on slide 6.
The details of our guidance for fiscal 2024 on slide six.
Speaker 3: We are introducing NFBPS guidance at $2.70 per share and $2.85 per share, which represents a 12% increase from the midpoint of our initial guidance last year.
We are introducing NFC EPS guidance of $2 70 per share to $2 85 per share, which represents a 12% increase from the midpoint of our initial guidance last year.
Speaker 3: We broadened the size of our guidance range for fiscal 2024 to 15 cents.
We broadened the size of our guidance range for fiscal 2024 to <unk>.
Speaker 3: We have had a range of $0.10 for many years, despite significant growth of our earnings. This new range is consistent with those of our peers.
We've had a range of 10 for many years despite significant growth of our earnings. This new range is consistent with those of our peers.
Speaker 3: Our projections are supported by contributions from all of our business units.
Our projections are supported by contributions from all of our business units.
Speaker 3: During fiscal 2024, a significant portion of our net financial earnings will come from our utility businesses, highlighted on slide 7.
During fiscal 2020 for a significant portion of our net financial earnings will come from our utility business as highlighted on slide seven.
Speaker 3: However, we do expect a higher contribution from energy services in fiscal 2024 than in prior years due to the outsized contribution from the fixed payments associated with the asset management agreements announced in 2020.
However, we do expect a higher contribution from energy services in fiscal 2024 than in prior years due to the outsized contribution from the fixed payments associated with the asset management agreements announced in 2020.
Speaker 3: Looking ahead, we feel very comfortable with our long-term growth rate in future years, and in fiscal 2025, we expect to return to more normalized segment contribution.
Looking ahead, we feel very comfortable with our long term growth rate in future years and in fiscal 2025, we expect to return to more normalized segment contributions.
Speaker 3: Overall, we have a portfolio of complementary businesses that deliver utility-like returns over the long term.
Overall, we have a portfolio of complementary businesses that deliver utility like returns over the long term.
Speaker 3: With that, I'll turn to a discussion of our business units, beginning on slide 8.
With that I'll turn to a discussion of our business units beginning on slide eight.
Speaker 3: We invested over 450Million dollars at New Jersey natural gas through a variety of programs in fiscal 2023. With nearly 40% of that capex providing near real time.
We invested over $450 million at New Jersey natural gas through a variety of programs in fiscal 2023, with nearly 40% of that capex, providing near real time returns.
Speaker 3: New Jersey Natural Gas's ability to generate these returns helps to alleviate regulatory lag, which is of particular importance in a high interest rate environment.
Jersey natural gas and <unk> ability to generate these returns helps to alleviate regulatory lag, which is of particular importance in a high interest rate environment.
Speaker 3: Within that 40% is our Save Green program, which helps residential and commercial customers lower their energy usage.
Within that 40% is our save Green program, which helps residential and commercial customers lower their energy usage.
Speaker 3: We spent approximately $60 million in fiscal 2023 to help our customers save money and reduce their carbon footprint, which is New Jersey natural gas's largest ever annual investment in the program for the second straight year.
We spent approximately $60 million in fiscal 2023 to help our customers save money and reduce their carbon footprint.
Which is new Jersey natural gas is largest ever annual investment in the program for the second straight year.
Speaker 3: We recently completed a commercial energy efficiency project at Jersey Shore University Medical Center, which is located not far from our headquarters here in Montgomery County.
We recently completed a commercial energy efficiency project in Jersey Shore University Medical Center, which is located not far from our headquarters here in Monmouth County.
Speaker 3: We provided over $6 million in energy efficiency financing at Jersey Shore and expect the net energy savings on this project to pay back the entire cost within four years.
We provided over $6 million in energy efficiency financing at Jersey shore and expect the net energy savings on this project and payback the entire cost within four years.
Speaker 3: Growing these programs is a central element of our decarbonization strategy, and New Jersey natural gas has long been a leader in this area.
Growing these programs as a central element of our de Carbonization strategy and New Jersey natural gas has long been a leader in this area.
Speaker 3: We achieved solid new customer growth throughout the year, adding 8,800 new customers compared to approximately 7,800 last year through a combination of new construction and conversion.
We achieved solid new customer growth throughout the year, adding 8800, new customers compared to approximately 7800 last year through a combination of new construction and conversions.
Speaker 3: During fiscal 2024, our capital deployment strategy will ensure that our infrastructure continues to provide the most reliable and affordable energy delivery service available for our customers.
During fiscal 2020 for our capital deployment strategy will ensure that our infrastructure continues to provide the most reliable and affordable energy delivery service available for our customers.
Speaker 3: We also expect our customer growth to continue to trend higher, and with our current IIP and Sabre investments, approximately 40% of capital investments are delivering near real-time returns.
We also expect our customer growth to continue to trend higher and with our current IP and save Green investments approximately 40% of capital investments are delivering near real time returns.
Speaker 3: And finally, we expect to file our next rate case in fiscal 2024, consistent with the timeline of our major technology investments.
And finally, we expect to file our next rate case in fiscal 2024, consistent with the timeline of our major technology investments.
Speaker 3: Moving to slide 9, our solar business, Clean Energy Ventures, had an exceptional 2023. We added 82 megawatts of new solar capacity, which represents the largest capacity increase in any fiscal year since CEV's inception.
Moving to slide nine our solar business clean energy ventures had an exceptional 2023, we added 82 megawatts of new solar capacity, which represents the largest capacity increase in any fiscal year since <unk> inception.
Speaker 3: We expanded geographically and during the year over 40% of our capacity growth has come from outside of New Jersey.
We expanded geographically and during the year over 40% of our capacity growth has come from outside of New Jersey.
Speaker 3: Our focus is on developing solar investment opportunities to provide high single-digit unlevered returns, and again, utility-like in their construct.
Our focus is on developing solar investment opportunities to provide high single digit unlevered returns and again utility like and their construct.
Speaker 3: Our project pipeline continues to grow and includes approximately 750 megawatts of potential investment options.
Our project pipeline continues to grow and includes approximately 750 megawatts of potential investment options as.
Speaker 3: As we've discussed in past calls, we are creating a diverse pipeline with multiple opportunities for expansion without any significant reliance on particular geographic location or subsidy program.
As we've discussed in past calls, we are creating a diverse pipeline with multiple opportunities for expansion without any significant reliance on particular geographic location or subsidy program.
Speaker 3: Moving to our storage and transportation segment on slide 10, this was our 1st year with Adelphia fully in operation, which is an 84 mile pipeline that runs from Martin's Creek, Pennsylvania to just south of Philadelphia. Our team did an excellent job ensuring the pipeline operated effectively throughout the fiscal year, particularly during winter storm Elliott.
Moving to our storage and transportation segment on Slide 10. This was our first year with adelphia fully in operation, which is an 84 mile pipeline that runs from Martin's Creek, Pennsylvania to just south of Philadelphia.
Our team did an excellent job ensuring the pipeline operated effectively throughout the fiscal year, particularly during winter storm Elliot.
Speaker 3: At Leaf River, we continue to pursue service enhancements that will help increase its capabilities for the benefit of our customers.
At leaf River, we continue to pursue service enhancements that will help increase its capabilities for the benefit of our customers.
Speaker 3: Moving to slide 11, Energy Services had an excellent 2023 with a significant contribution from the AMAs coupled with an outsized performance from our portfolio of strategically positioned assets.
Moving to slide 11 energy services had an excellent 2023 with a significant contribution from the Ams coupled with an outsized performance from our portfolio of strategically positioned assets.
Speaker 3: The AMAs will allow NJR to exceed its stated NFEPS long-term growth rate this year, and as demonstrated over the course of the last three years, we still have the ability to generate additional earnings from our remaining portfolio in times of volatility.
The <unk> will allow <unk> to exceed its stated NSE EPS long term growth rate. This year and has demonstrated over the course of the last three years, we still have the ability to generate additional earnings from our remaining portfolio in times of volatility.
Speaker 3: With that, I'll turn the call over to Roberto for a review of our financial results. Roberto?
And with that I'll turn the call over to Roberto for a review of our financial results Roberta.
Speaker 2: Thank you Steve and good morning everyone. Slide 13 shows the main drivers of our NFE for fiscal 2023.
Thank you, Steve and good morning, everyone.
Slide 13 shows the main driver of our <unk> for fiscal 2013.
Speaker 4: we reported an FEA of $261.8 million, or $2.70 per share, compared with an FEA of $240.3 million, or $2.50 per share last year.
We reported <unk> of $261 8 million.
Google Earth, <unk> 70 per share compared with any fee of $243 million.
Our $2 50 per share last year.
Speaker 4: The results of our business segment exceeded our initial expectations and reflected a year-over-year improvement at Energy Services and CEB.
The results of our business segments exceeded our initial expectations.
It reflected a year over year improvement at energy services and CV.
Speaker 4: partially offset by higher depreciation and interest expenses in our other segments.
Partially offset by higher depreciation and interest expenses in our other segments.
Speaker 4: New Jersey Natural Gas reported NFC in line with expectations, which included another strong year for our BGSS incentive program.
European natural gas reported NFC in line with expectations, which included another strong year or our <unk> incentive programs.
Speaker 4: I also wanted to note that a significant portion of the year-on-year increase in O&M at our utility is due to a difficult comparison versus fiscal 2022.
I also wanted to note that a significant portion of the year on year increase in London at our utility is due to a difficult comparison versus fiscal <unk>.
Speaker 4: when NGNG deferred nearly $11 million of budget expenses in accordance with the July 2020 VPU deferral order.
We maintained <unk> nearly $11 million of bad debt expenses in accordance with <unk> for all of us.
Speaker 4: Clean Energy Ventures, increasing its fee by over $5 million.
Clean energy ventures increasingly fee by over $5 million.
Speaker 4: As Steve mentioned, we increased our in-service capacity by more than 82 megawatts during the year.
As Steve mentioned, we increased our in service capacity by more than 82 megawatts during the year.
Speaker 4: and we will recognize the value of the associated tax attributes over the next five years.
And we will recognize the value of the associated tax attributes over the next five years.
Speaker 4: Torsion transportation reported in a few of 12.8 million.
Consortium transportation reported and if you have $12 8 million Butler.
Speaker 4: which included higher revenues from the facilities that went into service at the Delta Gateway during the year.
Which included higher revenues from the facilities that went into service at Adelphia gateway during the year.
Speaker 4: as well as higher depreciation and interest expenses.
As well as higher depreciation and interest expenses.
Speaker 4: Finally, energy services reported an NFC of 68.5 million dollars, compared to 39.1 million
Finally.
Energy services reported NFC of $68 $5 million.
Compared to $39 1 million in the prior year.
Speaker 4: As we look to fiscal 2024, it's important to note that we expect to recognize a significant portion of the AMA's total revenue during the year, most of which will be recorded during our fiscal fourth quarter.
As we look to fiscal 2024. It is important to note that we expect to recognize a significant portion of EBITDA.
Total revenue during the year.
Most of which will be recorded during our fiscal fourth quarter.
Turning to our capital plan on slide 14.
Speaker 4: Over the next two years, we expect to invest between $1.2 and $1.5 billion across the company.
Over the next two year, we expect to invest between one two and $1 5 billion.
Grow the company.
Yeah.
Speaker 4: This capital deployment is expected to support growth throughout our business units and is consistent with our long-term NFCPS growth target of 7 to 9%.
These capital deployment is expected to support growth throughout our business units and is consistent with our long term.
Growth target of 7% to 9%.
Speaker 4: For fiscal 2024, we're increasing the bottom and top ends of the range from our previous projections, largely driven by higher expected capital investments at NGNG.
Our fiscal 2024.
We're increasing the bottom and top ends of the range from our previous projections.
Largely driven by higher expected capital investments at engaging.
Speaker 4: In the next two years, we anticipate spending between $800 million and $1 billion for the utility.
In the next two years, we anticipate spending between $800 million and $1 billion.
The only thing.
Speaker 4: At CEV, we see a number of opportunities for future growth and expect to spend between $300 million and $470 million over the next two years.
At Seabee, we see a number of opportunities for future growth and we expect to spend between $300 million and $470 million.
Over the next few years.
Speaker 4: taking advantage of a broad opportunity set of federal investments.
Taking advantage of a broad opportunity set of solar investments.
Speaker 4: And finally, at S&T, we expect to maintain a moderate capital level with service enhancements at Leaf River representing the largest investment.
And finally at S&P, we expect to maintain a moderate capex level with service enhancements and leaf river, representing the largest investments.
Speaker 4: Our capital projections are anchored by strong cash flows from operations.
Our capital projections are anchored by strong cash flow from operations.
Speaker 4: On slide 15, we show the very strong operating cash flow achieved during fiscal 2023.
On slide 15, we showed a very strong operating cash flow achieved during fiscal 2023.
Speaker 4: We also show our updated projections for fiscal year 2024 and introduce fiscal 2025.
We also show our updated projections for fiscal year 2024, and introduced fiscal 2005.
Speaker 4: As you can see, we expect cash flow from operations to range between $450 and $490 million in the coming year.
As you can see we expect cash flow from operations to range between 450 and $490 million in the coming year.
Moving to slide 16.
Speaker 4: NGNG continues to maintain favorable investment-grade credit ratings.
<unk> continues to maintain favorable investment grade credit ratings.
Speaker 4: And NJR's adjusted FFO to adjusted debt was 19% for fiscal 2023 and is expected to be between 17% and 18% for fiscal 2024.
And engage our adjusted <unk> to adjusted debt was 19% for fiscal 2023 and.
And is expected to be between 17 and 18% for fiscal 2024.
Speaker 4: We have no plans to issue block equity, however, as we have stated in the past, our existing digital reinvestment program includes a waiver discount feature that allows us to raise small amounts of equity on an opportunistic basis.
We have no plans to issue block equity. However, as we have stated in the past our 15 given reimbursement program includes a waiver. This call feature that allows us a small amounts of equity on an opportunistic basis.
Speaker 4: Finally on slide 17, we provide a breakout of our long-term debt. As you can see, most of our debt is fixed rate in nature. We don't have significant maturity in any particular year and we have substantial liquidity at both NJR and NJNG.
Finally on slide 17, we provide a breakout of our long term debt as you can see most of our debt is fixed rate in nature, we don't have significant maturities in any particular year.
Substantial liquidity at volt and Jr, and engineering team.
Speaker 4: Our NFCPS guidance for fiscal 2024 and our long-term NFCPS growth guidance assume high interest rates for the foreseeable future.
Our EPS guidance for fiscal 2024.
Our long term <unk> growth guidance assume high interest rate for the foreseeable future.
Speaker 4: Overall, we are in an outstanding position to find our growth objectives. With that.
Overall, we are in an outstanding position to fund our growth objectives.
With that I will turn the call back to Steve.
Speaker 3: Thanks, Roberta. Since our analyst day in 2020, NJR has reported twelve quarters of financial results. During this time, we have raised our earnings guidance on five occasions as a result of strong performance throughout our business unit.
Thanks Roberta.
Since our analyst day in 2020 and Jr. As reported 12 quarters of financial results. During this time, we have raised our earnings guidance on five occasions as a result of strong performance throughout our business units.
Speaker 3: We exceeded our seven to nine percent long-term growth rate for each of the past three years, and we expect to do it again this year.
We exceeded our 7% to 9% long term growth rate for each of the past three years and we expect to do it again this year.
Speaker 3: An important component of our value proposition is the ability to return capital to our shareholders.
An important component of our value proposition is the ability to return capital to our shareowners for fiscal year 2024, we have raised our dividend to an annualized rate of $1 68 per share.
Speaker 3: For fiscal year 2024, we have raised our dividend to an annualized rate of $1.68 per share, a nearly 8% increase compared to fiscal 2023.
Nearly 8% increase compared to fiscal 2023.
Speaker 3: With this increase, we have now raised our dividend every year for the last 28 years.
With this increase we have now raised our dividend every year for the last 28 years.
Speaker 3: The combination of our expected growth in dividend provides investors with an expected shareholder return of between 11 to 13 percent.
The combination of our expected growth in dividend provides investors with an expected shareholder return of between 11% to 13%.
Speaker 3: In the coming years, we'll continue to develop organic growth opportunities that support long-term NFEPS growth targets through prudent capital decision-making, reinforced by a strong balance sheet. As always, I'd like to thank all of our employees at NJR for their hard work and contribution. And with that, I'll now open the call for your questions.
In the coming years will continue to develop organic growth opportunities that support long term <unk> EPS growth targets through prudent capital decision, making reinforced by a strong balance sheet the balance sheet as always I'd like to thank all of our employees at <unk> for their hard work and contribution.
With that I'll now open the call for your questions.
Speaker 1: At this time, I'd like to remind everyone, in order to ask a question, simply press star followed by the number one on your telephone keypad. Our first question will come from the line of Julian DeMolen Smith with Bank of America. Please go ahead.
At this time I'd like to remind everyone in order to ask a question simply press star followed by the number one on your telephone keypad.
Our first question will come from the line of Julien Dumoulin Smith with Bank of America. Please go ahead.
Speaker 5: Hi, good morning. This is Tanner on for Julian. Now that we're a few years into the long term planning period, what factors.
Hi, Good morning, Mr. Tanner on for Julien.
Now that we're a few years into the long term planning period, what factors are.
Speaker 5: are you seeing that could trend your EPS growth to the upper or lower ends of your long-term guidance for the remainder of the planning?
Are you seeing that trend your EPS growth to the upper or lower end of your long term guidance for the remainder of the planning period.
Speaker 5: Uh, you know, given your upcoming rate filing and cap X plan, should we think of is accelerating here in the back end? I'm just trying to get a sense of the, how you view the linearity of and clean energy ventures as well.
Given your upcoming rate.
Filing and Capex plans should we think of and J&J is accelerating here in the back end I'm just trying to get a sense of how you view the linearity of J&J, and then clean energy ventures as well.
Speaker 3: So, Tanner, I think you described it right there. You know, we've got a number of options we're able to grow or deploy capital, I guess, more quickly in order to accelerate that growth. You can see the CapEx program and utility increasing due to customer growth and other factors of clean energy. We've got a large pipeline of projects at CEB. We've got potential expansion, although nothing's been announced at our S&T group.
So I think you described it right there.
We've got a number of options, we're able to grow and deploy capital I guess more quickly in order to accelerate that growth strategic Capex program at the utility increasing due to customer growth and other factors.
We've got a large pipeline of projects at CEB.
Potentially this past, although nothing has been announced.
<unk> group CFO all of those factors pushing forward.
Speaker 3: So you have all those factors pushing forward, you know, added into that, you know, the fact that we have less than need for equity, you know, due to the cash flows from energy services. It just built a strong platform for future investments. So I'd like to think about it as if we've got a good plan solidly built going forward to hit the 7 to 9% growth, and then, you know, the potential for additional investments, you know, should any of the things that I've just mentioned, you know, hit.
<unk> added into that.
We have less need for equity due to the cash flows from energy services.
To build a strong platform for future investments so I'd like to think about it is that we've got a good plan.
Planning solidly builds going forward to hit the 79% growth and then the potential for additional investments.
Thanks for that I just mentioned.
Okay.
Speaker 5: Great, thanks. And then, you know, with respect to the upcoming rate case application, can you set some preliminary expectations for the composition of the filing is expected to be pretty straightforward or.
Great. Thanks, and then.
Back to the upcoming rate case application can you set some preliminary expectations expectations for the composition of the filing or is it expected to be pretty straightforward or.
Speaker 5: Could there be a programs or mechanisms attached with the filing? Thanks.
Could there be up programs are mechanisms attached.
With the final thanks.
Speaker 6: Tanner, this is Pat McLeod, Chief Operating Officer of New Jersey Natural Gas. To answer your question, this is a pretty straightforward rate case. You may recall we'll be filing sometime in fiscal year 2024. The principal toggle for that is IT investments related to our program next.
Tara This is Pat Migliaccio, Chief operating officer, a new Jersey natural gas.
Answer. Your question. This is a pretty straightforward rate case, you may recall, we filing sometime in fiscal year 2024.
We'll toggle for that is.
And it.
Investments related to our program next.
Speaker 7: as well as other, I'll call bread and butter, utility investments around safety and reliability, the pipeline, etc. But to hit the nail on the head, it's a pretty straightforward case.
As well as other.
Our bread and butter utility investments around safety and reliability.
Pipeline et cetera.
Anthony I'll add it's a pretty straightforward ridges.
Great. Thank you very much.
Speaker 1: Your next question comes from the line of Travis Miller with Morningstar. Please go ahead.
Your next question comes from the line of Travis Miller with Morningstar. Please go ahead.
Speaker 3: Good morning, everyone. Thank you. Hey, Travis. Quick question on slide 11 to start. Those, the revenue and cash flow projections, what kind of variability should we expect in those, or not at all?
Good morning, everyone. Thank you.
Jos.
A quick question on slide 11 to start those the revenue and cash flow projections, what kind of variability.
We expect and those are not at all.
Speaker 4: Probably tie these over the rails and the end of the day, right?
Hi, This is Robert.
Yes.
Speaker 4: Hey, so you're talking about the AMA, right? So the AMA, yeah. Yeah, those are contracted. There is no variability on those cash flows or revenues.
Hello.
So just talking about the <unk> you're right.
Yes, those are compressed stage there is no variability, even though cash flow for revenues.
Speaker 7: Okay, so in terms of modeling, just model those straight out as you present in the...
So a good model in terms of modeling this model, though straight out as you presented them.
Speaker 7: Correct. Okay. And then, can you tell us what the earned ROE was at NJNG?
Okay.
And then <unk>.
Can you tell us what the earned ROE.
Was it and J&J.
This year for the fiscal year.
Speaker 4: No, unfortunately, that's something we don't disclose publicly about it.
No.
Unfortunately, that's something we don't disclose publicly targets.
Speaker 7: Okay, okay, understand. And then a higher level question on CEV, I wonder if you could characterize both the types of projects that are in the pipeline and then also your thinking around strategy in terms of building and or contracting and or buying.
Okay, Okay understand and then a higher level question.
<unk> Wonder if you could characterize.
The types of projects that are in the pipeline and then also youre thinking around strategy in terms of.
Building and our contracting and are buying <unk>.
Projects in the future.
Speaker 3: You know, I guess I'll take the strategy, you know, it hasn't changed, you know, from where we started. You know, we've got, you know, a few different stages of projects that we're able to purchase and acquire. You know, we started developing, but certainly not opposed to buying late-stage projects or even ones in operation. General strategy is to, you know, be able to build, develop, and own within, you know, regions and jurisdictions that are favorable and fit our risk profile. So I'd say, you know, New Jersey-like, and we get outside of New Jersey, which we have, I think 40% of our projects to date are outside of New Jersey, or 40% going over outside of New Jersey. We're really looking at the risk profile, making sure the regulatory environment is favorable. It really matches, you know, what we like to say is, you know, utility-like, you know, earnings across the whole company.
Yes, I guess I'll take the strategy Hasnt changed.
From where we started we got few different stages of.
Projects that were able to acquire.
We acquire we started developing that certainly not opposed to buying late stage projects or even ones in operation.
General strategy is to.
Be able to build develop and own within regions in jurisdictions that are favorable to fit our risk profile. So I'd say, new Jersey like if we get outside of New Jersey, which we have M&A, 40% of our projects to data outside of New Jersey, or 40% of going over outside of New Jersey, We're really looking at the risk profile, making sure of that.
That's where the environment is favorable and really matches.
What we like to say utility.
Earnings across the whole company. So that's the way we're looking at it.
Speaker 8: So that's the way we're looking at it.
Okay do you foresee.
Speaker 7: doing projects on your own or would you consider going into maybe some very large projects with a partner or other?
Okay doing projects on your own or would you consider going into maybe some very large projects with a partner or other.
Okay.
Speaker 7: tax equity partner, you know, however you'd want to structure it, but what could you see yourselves going into bigger projects?
Tax equity partner.
However, you would want a structure could you see yourselves going into bigger.
Projects.
With a partner.
Speaker 3: You know what, I'm not going to take anything off the table, but to date, you know, you've seen the size of projects that we're doing, you know, anywhere from, you know, a few megawatts up to, you know, 25 or 30 megawatts.
I wouldn't take anything off the table, but to date <unk> seen sized projects that we're doing anywhere from a few megawatts up to 25% to 30 megawatts. So smaller in nature. When you look at large scale utility investments and I think that niche market fits us well not only from a rate churn.
Speaker 3: So, you know, smaller in nature, when you look at large scale, you know, utility-like investments, and I think that niche market, you know, fits us well, not only from a return management perspective. That being said, you know, I think we certainly have the capability to manage, you know, larger projects. Again, you know, this is all really focused on, you know, returns and risk profile of the jurisdiction in which we're making the investment. Okay. Great. I appreciate this.
Management perspective that means we certainly have the capability to manage larger projects.
This is all really focused on returns and risk profile of the jurisdiction in which we're making the investments.
Okay, Great I appreciate the thoughts.
Alright.
Speaker 1: Again, to ask a question, press star 1 on your telephone keypad. Your next question will come from the line of Robert Mosca with Mizzouho. Please go ahead.
Again to ask a question press star one on your telephone Keypad. Your next question will come from the line of Robert Moskow with Mizuho. Please go ahead.
Speaker 7: Hi, good morning everyone. So, on slide 9, which is the staging of the backlog edition, you know, the break points on the X axis change. So it's kind of hard to tell if anything's different with respect to project timing, but any notable notable developments. You want to call out, it also seems like TV and 24. Is going to be slightly higher than originally thought so any thoughts there would be helpful.
Hi, good morning, everyone.
So on slide nine which is the staging of the CEB.
Backlog additions.
Points on the X axis change so it's kind of hard to tell if anything is different with respect to project timing, but any notable notable developments you want to call out also seems like heavy capex in 'twenty four is going to be slightly higher than originally thought so any thoughts there would be helpful.
Yeah.
Speaker 3: So what are you looking for, Robert? I'm not sure what the question is.
So we.
Are we looking for Robert I'm not sure the questions.
Speaker 9: Yes, sorry. So slide nine, the project edition timeline. So just wondering if anything's changed because the break points on the X axis are different from the prior quarter. But any developments are kind of steady as she goes. And it also looks like the 24 CAPEX for CEV is slightly higher than than originally thought. So any thoughts there?
Yes, alright, so slide nine.
TV Project addition, timeline. So just wondering if anything's changed because the breakpoints on the X axis or different paper in the prior quarter, but any developments or kind of steady as she goes and it also looks like the 'twenty four capex for CEB is slightly higher than originally thought so any thoughts there.
Speaker 4: So on slide nine, if you convert this slide to prior slides, similar to this one from prior calls, there is no significant difference, other than our in-service capacity has increased because we have been changing things in the months of May and August in service. But if you look at that total, right, that 1.2 gigawatts that we have on the right has not changed. So we continue to move and progress, creating our pipeline, but from the last quarter when we had this conversation, no material changes.
Hey, Rob this ortho total.
On slide nine if you compare these led to prioritize for TV one from prior calls there is no significant difference over that that were in service capacity has increased because we haven't yet.
Thank you Luca muscle made all concerns, but if you look at that total about right about one two gigawatts that we have on the horizon.
<unk> has not changed so we continue to progress our pipeline from the last quarter. When we had this conversation no material changes.
Speaker 4: Okay, great. That's helpful. And Steve, I think you touched on it in your prepared remarks just with the widening of the guidance range. Is that just to match your peers, or is there any more earnings variability in your base businesses this year compared to prior years? And if there is, just wondering what that could be attributable. No, not related to more variability. This is exactly what you said, to match our peers. If you think about our guidance range, it's been about 10 cents for
Okay great.
That's helpful and Steve I think you touched on it in your prepared remarks, just with the widening of the guidance range is that just the match your peers or is there any more earnings variability in your base business as this year compared to prior years and if there is just wondering what that could be attributable no no not really taking more variability because these effects.
When you think of much of our peers. If you think about our guidance range has been about 10% for both.
Speaker 4: 12 years, I don't know, more than 10 years. And despite that, we've been growing earnings every single year, right? So this is just to bring us back in line with what our peers are projecting on a relative basis.
We are having a more than 10 years.
Despite that we have been growing earnings every single year right. So because you have to bring us back.
In line with what our peers are.
On a relative basis.
Speaker 9: Okay, great. Thanks, Roberto. And just a quick last one for me. I know you mentioned kind of pursuing the service in Hammonds, Hanson's, at Leaf River. Just wondering, is that something that could be monetized? Is that an area of growth, or is that just, you know, improving customer service for those customers?
Okay, great. Thanks, Alberto and just a quick last one for me I know you mentioned kind of presume pursuing these service enhancement headsets leaf river.
I'm just wondering is that something that could be monetize is that an area of growth or is that just improving.
Improving customer service for those customers.
Speaker 3: No, I think the whole strategy associated with our S&T business is to be able to get on to organic growth with those assets.
I think the whole.
Strategy associated with the S&P business is able to get onto organic growth with those assets and certainly we've got.
Speaker 3: And certainly we've got a growth mindset in this business.
Growth mindset into those businesses. So yes, we've got some small investments that we're making now.
Speaker 3: So, yeah, we've got some small investments that we're making now, you know, tied to some, you know, contractual arrangements. And, you know, I think moving forward, you know, it's been a secret that, you know, storage is getting expanded in the Gulf Coast and certainly pipeline infrastructure in the Northeast.
Some contractual arrangements and.
I think moving forward.
It's been a secret that storage is seeing an extended in the Gulf coast and certainly pipeline infrastructure in the northeast is difficult to build greenfield so expanding.
Speaker 3: It's difficult to build greenfields, so expanding existing pipelines.
Existing pipelines.
Speaker 8: It is much more. It's much easier. So when you look at those two backs, you know, we look at expansion. We've got nothing to announce now, but it's certainly something that we look at, you know, that could be outside of the plan.
Much more.
It's much easier so when you look at those two facts, we look at expanding nothing to announce.
Asks now, but it's certainly something that we look at that could be outside of the plan.
Got it alright, thanks, Thanks for the day everyone.
Thank you.
Speaker 1: And once again, for any questions, please press star 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A.
And once again for any questions. Please press star one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
Speaker 1: We have no further questions at this time. I'll turn the call back over to Adam Pryor for any closing remarks.
We have no further questions at this time I will turn the call back over to Adam prior for any closing remarks.
Speaker 10: Thanks, Regina. I'd like to thank everyone for joining us this morning. As a reminder, a recording of this call is available for replay on our website. I hope everyone has a happy and safe Thanksgiving. As always, we appreciate your interest and investment in JL. Thanks so much. Goodbye.
Thanks, Regina I would like to thank everyone for joining us. This morning as a reminder, a recording of this call is available for replay on our website.
Have a happy and safe Thanksgiving as always we appreciate your interest and investment in jail and slash Nevada.
Speaker 1: That will conclude today's call. Thank you all for joining. You may now disconnect.
That will conclude today's call. Thank you all for joining you may now disconnect.
Okay.
Yeah.