SWX - Earnings call transcript Q4 2020 | Southwest Gas Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Southwest Gas Holdings 2020 Year-end Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host, Ken Kenny, Vice President of Finance and Treasurer. Thank you. Please go ahead.

Kenneth Kenny

Sadie. you, Thank Southwest the Inc. Welcome Gas to Holdings, Earnings Call. XXXX Conference

is and Finance I Sadie Treasurer. stated, the Kenny, name my of As am Ken Vice and President

Our internet. over conference broadcast call the being is live

to For you our at link. and those www.swgasholdings.com, call webcast, on conference who like website the of click please access would visit the

Senior we Financial Internet, Executive Hester, John Southwest's and and Chief on We be to Mr. have the slides Chief follow have accessed Mr. Vice Gregory Mr. Peterson, Officer; can Officer; which our President, presentation. Today, President

lawyers Justin Brown, General address provide time will or And cause in come factors Slide XXXX. of description may refer the to presented SEC to our President, you XXXX which results statements. today brief management's this coming should true. Vice year's of for and senior #X information earnings the These and filings of you not Counsel; press on release, language for provide the company and that members Senior discussed the asked a overview to factors actual of may may also our statements. to statements statements All the and differ that to from our management earnings earnings that John. forward-looking remind we are today, made assume have any a statement. contains over forward-looking like some some assumptions, will With Further, turn I'd to guidance the as such and update obligation no other that per may be longer-term share based forward-looking are to me impact provide Also, of guidance. that said,

John Hester

Ken. Thanks,

Slide to Turning X.

rate earnings XXth share $XXX $X.XX XXXX, dividend per increase strong with year million, a our an of realizing share. $X.XX Southwest representing record net year our annualized a to income dividend for closed to $X.XX of increases of and of per record out

expense of case $X regulated Arizona agreement decreased almost the approved margin in the $XX Operating gain over forthcoming maintenance relief for our rate Nevada, $XX operations rate seen increased million; by relief added from customers, California and XX,XXX new in strongest operations, expected net $XX since an million and million utility decision of commission. an we and For we've rate in XXXX. our and million;

unregulated represented our increase $X.X of $XX in experienced helped from million corporation. $XXX over customers of record the to million services XX just X net realized of and over contributed year. the cash we revenues customers significant Centuri revenues at of dividends events XX% operations, We regulated year, billion, Finally, record storm major we our weather recover a infrastructure prior utility impacting under income the We retail states. prior million, saw parent which a restoration as different million $XX $XX gain

and base, overview that, year. our regulated on on response the an our and now of a growing interest our dividend our growth, the overview will capital results to turn will I our outline our call I call. sustainability, unregulated update and customer activities; Moving efforts base expectations for Peterson financial and and this coronavirus to diversified pandemic, Greg. Greg segment X operations; for of provide extensive Brown provide Justin and breakdown to today's Slide an and with will provide regulated our will the With our rate advancing for remainder

Gregory Peterson

with Yesterday in the information XXXX John. Form some our a Thanks, we statistical afternoon, provided and earnings announced SEC. filing X-K

highlights on refer Form of for SEC. I operations XX-K our with these annual our also operating and of for Please comprehensive touch to a some the for will filed results details additional report We XXXX. on our XXXX. documents analysis

on income with of today summary start Slide a comparative Let's company total X.

years. restoration exceeded EPS million diluted result or Services $X.XX Slide up composition surrounding the for changes million the while net XXXX a of per decrease share record top values gas net the life Gas chart X income contributions due XXXX share in or in $XX compared segment XXXX end next net from was The Slide are performed Centuri EPS and shown $XXX emergency between for shows Operations guidance waterfall results income years for slide. The sizable some following diluted $X million over consolidated million, operations components cash range, each declined increase the on Utility The of X relative depicts income XXXX. of the in the I'll a by company-owned net primarily between natural between $XXX $X.XX operating increases million incremental As storm results insurance to XXXX. per and million the John details for $XX.X the of to on consolidated Natural segment work at each Net and slides. to about between of $X segment provide the segment incremental surrender XXXX. Infrastructure tailwinds additional was our the $X.XX the in income in mentioned, for utility.

XX are details Slide presentation. Additional of appendix to the this on

margin. million adjustment collectively Let million onetime associated million that million with X.X% mechanism. XXXX first to me $X impact XXXX. of rate. the $X California $X decoupling by in sets tax between the during meter months, increments time operating reduction from attrition billion $XX to million past includes in remaining margin increase saying XX,XXX start operating in growth $X Arizona provided The increase XX and years margin the margin the a of level Nevada of reached historic relief reform a a The Rate operating includes in $XX

$X million rating. related satisfaction Legal customer expenses at to million reduction XXXX saves customer expense, down count about O&M claims about expenses and million. by temporarily tenant Our we moratorium or were operations costs, COVID-XX $X and including reduced years. pandemic, efforts levels, process changes, in $X impacted between in-person a a charging million travel, XXXX X% maintenance, and management's a minimize to on training contact $X fees modified reduce about maintaining $XX.X in reflects an the negatively during the outset of head while late from XX% in decline by million margin The estimated

more growth accompanying in projects ensure initiative, million corresponding our X% million or amortization. O&M safety $XX.X serve. construction population in or expenditures $XXX mid-XXXX. depreciation similar service with anticipate data customer capital in XXXX average we facilitate O&M a Incremental increase for in CDMI between and drove in X% increased an amortization modernization million go-live and project, about costs, gas taxes additional Even a grow However, the of to the to pipeline $X of and incremental the in is $X strong communities locating in resulted $X million associated and costs million major $X.X plant with change The million training including as of line the XXXX, general million a call-before-you-dig or the company-owned the an with insurance $X decision. of housing includes the these our property expense COLI a -- market the overall were million depreciation rate of implementation increase to in million expected increase $X-plus infrastructure. the to in shorter and in will in million Capital general increase with to increase cash million years. expenditures incremental life or $XXX of Depreciation, $XX.X a and a recent in policies. associated we level $XX.X 'XX, also General portion base decline have tax anticipated $X investments between CDMI general new surrender level of than reset with midyear is than $X an million case in stock annual the or which years lives taxes years values reduction our income 'XX, other surged projects, as million in of were the Both market. in depreciable Arizona tracker underlying

XXXX million million values quarter high in was the a versus increase cash The fourth XXXX in surrender in going volatilities increased XXXX. of in $XX.X $X.X the to mitigate record adjusted extreme underlying values COLI these forward. Specifically, mix of investments of

the of million. $XXX policies maintaining approximately face While value the at

The related in postretirement expected costs about pension was a years. increase in other non million decline are between These million costs decline to non-service in $X income of other major and pension 'XX. service-related component and benefit $X the

service-related outstanding expense in However, will X.X% June associated $XXX million in of pension an The increase million O&M higher including issued with interest XXXX. the balances, increase notes costs. experience debt reflects senior offsetting $X.X

the year. perform of from of million to work of fourth in are by to operations. emergency primarily We'll million Southwest's associated from utility being challenges infrastructure impressive damage the storm employees expansion cash in and incremental combination were Southwest with Centuri higher weather a services from were XXX components XXXX margin electric to services from quarter. the By experienced in $XXX more results now between expenditures revenues X.X% related $XXX in electric working including Gulf electric due environment. third of and million overall due increase given to Storm totaled following $XXX infrastructure XX U.S. revenues Linetec the restoration to of employees improved of and of million these financed infrastructure with are revenues debt total tornado hurricane operating ongoing representing with growth the capital to infrastructure -- COVID-XX due infrastructure billion, million days and restoration conditions At securing costs. services $XX million higher million, from costs work continued quarter XXXX, net and in Slide restoration with generally $XXX typically services X.X% Included regions review comparison, provided Eastern related core revenues flows from gas revenue supplement work absorption equipment new in also Centuri and of to nearly X. services. with $XX with during of and provided restore increased contracts and the utility even and of infrastructure infrastructure increases customers ground associated million other year, XXXX the customers had above fixed million customers. existing largely Centuri somewhat early of and on with expenses favorable in performed $X.XX shows and during for similar a was performing XXXX. These issuances profit XXXX the to Coast benefited $XXX equity than prior nearly Most and homes work effort, the Revenues XXXX, $XXX Centuri power These performed Centuri's working utilization generates a expenses is work storm this to respectively. $XX.X to XXXX we efficiencies than chart peak income this were emergency in services only to in incremental hour work. XXXX. businesses. This diverted existing thousands

these depreciation added million this of format due Centuri's to intangible non-GAAP is Centuri also a operating have profit-based the of as amortization $X.X reduction assets. a $X.X XXXX, under included. believe wage million presentation, separate lower nearly included the portion income. allocable decline on continued the do tax increases years profit expense were of separately materials During higher Canadian million costs, additional $X.X favorable in own. and self-insurance government further from were the borrowing received expenses useful of and primarily Centuri $X.X be $X by between pretax presentation expense. The net a claims costs in experienced to million insurance years Linetec's includes wage outstanding line Also with to services and subsidies lower costs to incentive Interest primarily a amortization infrastructure due Income substantial recorded -- may income summary includes due investors that increased expense programs. $X.X general and results on $XX chart other the results. increase Linetec. higher we million, these facilities. accompanying Depreciation that million the relief to balances shows analysts grew COVID-XX utility $X.X operating reflecting million, Offsetting to to to in and increased business due compensation. slides the of the growth and from increased we We In associated incremental in the related Centuri in that identifies administrative to payroll the in between million A currently EBITDA, which declined programs, not of appendix noncontrolling interest gross income measure, of rates evaluating

in XX% produced shown provided on the net contributed utility's over Gas significant update. and of in emergency contribution Slide Centuri to to as in and of Arizona With anticipated growth businesses, income call Finally, exceed services an restoration consolidated I'll income and effective Centuri's turn a for California, the thousands segment in our in now record XX, increased net XXXX, consolidated expected share Operations net including Natural homes XX%. revenues, and new is to of to Justin regulatory utility consolidated currently Nevada rates XXXX. results. Brown, XX% the and income storm

Justin Brown

Greg. Thanks,

tracker, with program. in state referenced service jurisdictions safe, XX. design, that to were $XX California provide over fully us previously, on settlement, $XX tracker revenues Arizona reliable receiving rate of December income continue our energy modified revenues territory. final see This our COYL tax state X slightly decoupled service rates in will refresh continue our with on in to across our nearly increased Starting approximately we a final implement million. received customers John property and As results a We've for Slide approval million. also increased affordable our This new approval tax We will case. our continue authorized of rate of X to in will and subject pending million help each result

to Turning XX. Slide

We also and of plan our filing made programs. the and future reconciling compliance the case. surcharge commission In suspended pending the any revenues a for rate filings, recently our existing from surcharge the VSP identifying froze outcome COYL XXXX, unrecovered

in amount As recent differences not XXXX, rates up costs, to end the which surcharges surcharge the VSP are reconcile in rate the the in address such, this to to that see and the between to time, period May COYL is outstanding to included adds proposal, VSP revenue including case. commission we've the date make million. at adjust following tracker about to year the these now $XX the before plant total, most We'd We need calendar received our which of recover plus through evaluate In the filing and time the recovered. year. base will the plan to the a costs we requesting a expect decision and be

including and authorized turning in to of and Slide our rate XX XX%. ratio of Rates case. provides $X.X settlement proposed an The our of under proposed back just commission Slide week The October. Nevada an revenue with California, of equity for XX, to in ROE about of a revenue ratio million, the an with just Moving we X.XX% filed first XX%. million commission increase agreement In of a ROE increase XX% $XX effective the an August. became settlement agreement equity of

by to programs, us over attrition case cycle. we to agreed important annually rate allow We other million the which our next filings, surcharge. rate safe to will of to recover will continue measures ensure continued annually allowed to up also proposed annual very Two for informed reliable X allow costs X-year will our which us customers. invest also components to a revenues the service over next be safety decision-making in California And our adjust X.XX% of include through approval risk and the these $XXX years

requesting request originally as agreed and and to the simply of test In accounted was base estimated rate the Tahoe a in it getting annually new order and we million due that Lake the harmed we for that as existing a delay we account of filing statutory to March about the the This project addition, in are to project issued. the We a not to order. $XX instead will period the $XX.X segments any of as rates $XX for memorandum cost the part North to final made recover $X track such April case. frame a time million agreed in and through allows signaling recently original in project, the currently extend original ALJ completed. in a the million differences the large remove proposed have us included from replacement future rates proposed period place efficiency the which filing, of between The million about the a parties be time

we main be In completion continue to Last update Southern expansion-related in supply the and million which several we working project projects on. Mesquite. of main, of $XX received Nevada, permanent proceed the saw we've first the progress started with Northern up Since of source new first receiving the quick expansion of XX, customers quarter, development In gas will last service. our the Turning our a area eligible main on approach approach million Creek Spring as along customers Slide our on make of been by for our Nevada, to to $XX we customers, that was the proposal, hooking quarter. area. approval we XXX% saw gas well request the

will We build Creek to back Spring John. turn it to of remainder the year. continue that, the the throughout to with other out And I'll of portions

John Hester

Justin. Thanks,

Slide to XX. Moving

We're and in both for protecting and utility revenue disconnections utility flexible able secure for while to of utility decoupled offered to and year and guidelines Southwest protective protect for and the the work-from-home response Protecting interest late Centuri secure our bills. interest outreach Gas the our our and and COVID-XX to utility we our the government customer operate payment to shareholders. multifaceted strong as revenues for designs of entities of social structures, has personal plans out the our assistance protect jurisdictions. employees, regulatory environment customers had of asset contractors. our and successfully coordinated our remained payment of to with funds our interest our pivoted staff, increased non-payment, employees, shareholders, as rolled infrastructure our last our office a our COVID-XX virus temporarily a local regulatory equipment we and customers, under and Nevada field suspended physical interest specific well rate employees payment And services state available California growing. distancing treatment To

XX. Turning to Slide

strong. strongly current offer we this noted both believe significant customer customer XX, satisfaction the our bar migration first year great XX% On XX,XXX a and by remain new a customers We and and for we offer Slide and realized customers. studies. past service, customers our as customer our independent continued service to rankings customer homebuilding with by we customer as service along a year, proposition activity satisfaction continued in high in to demanded which affordable, for third-party natural is adding on predicated past reliable, experience gas growth is new territories to with value The place comes we growth, strong Greg,

Justin these territory, to Southwest areas Moving Nevada supportive two territory newest by We expansions unserved Slide Creek, underserved our propose be to that by areas capital interest. was facilitated development million of areas Nevada. service committed in critical into interest, into of $XXX Spring state by gas. towns of legislation consider Expansion of that XX. featured Mesquite the detailed and that the as natural expansion service to earlier: economic to gas natural are or have Both support to we and their in almost availability allows

World, XX, quotations, business new to encompasses focused some among not singularly start. new home margins to on and homes, development on small state the XX, but like And home by are under very of Slide show significant Slide commercial off Resorts territories characterizing is We already reflecting Raytheon others. all Raiders, Google, XXXX in the and that customer our Residential Turning XX. some up new XX of impressive the designs states. are customers in quotes economic the with and Las expansions the over Southern X XX% resilience in illustrates On new at of served market, of rate we jurisdiction. growth strength companies customers Arizona. a make selected Vegas the Nevada our service comparable breakdown our and Slide substantial and show decoupled Slide base the

a interest and system, implementing support company, rightful have some increased tariffs the the CNG to greenhouse reduction expanded we our we and regulators and ability developing in in as natural compressed our renewable natural the translating Slide transportation is real displacement are our to our to projects customers, We diesel to gas service deployment Turning customers XX, natural an future the inclusive RNG expand We of supplies on of throughout change many of venues are well our sustainable with future important gas CNG support gasoline the our Slide gas. hydrogen regulatory in and demonstrates climate promoting are of we influence future. programs place our and natural look detail to as to secure gas important reductions our with Gases, of gas' now and our as programs territories part of includes sector the for ground, receiving partner Greenhouse use and secure that the towards renewable to in customers. into use a XX.

air of initiatives is into buses. footprint, our agreement secure favorite already an and compressed my to partnership to here as RTC issues, of more but fleet gas in extensive an to it with renewable much Southern One gas alternative address natural bus inferior establishing its as in the containment gas converted Southwest interest with Nevada entered the to expensive electric a operationally natural carbon-neutral recently quality

Slide to XX. Moving

report, Gas' please at on bottom enhance For our promotion noted sustainable through is see which more of initiatives the the of slide. sustainability the website information Southwest the numerous to accessible future,

Turning XX. Slide to

our Our capital investment is for X-state footprint detailed. plans across

anticipate will utility billion an to program. distribution cash billion, funding those and Southwest $X.X anticipate gas the We years ATM from issuance operations, $XXX needs Slide when approximate about million debt our to planned flows X-year is equity through approximately mix reliability expectations, billion issued serve our about million invest in to of in XX, $X.X network. both with $XXX X be equity investments we capital next roughly from and payout On which gas safety sourced issuances. approximately and including cash dividend remaining of flows of with over with and XX% balance the enhance growth plans debt new the even our and $X.X internal

Turning XX. Slide to

period significant to continued a at rate compounded distribution the a base base to from in XXXX. annual in expected rate rate to grow XXXX the billion of XXXX. investment billion approximates $X.X continued gas growth of ended X.X% result base, our in with rate growth in of X-year This Our over expected systems end level base total is growth at the in rate $X.X end

the XX. of part investment of investment. capital historic an important This expenditures, XX the shareholder each to a Slide total see years illustrates the year historic we growth X $XXX continued with to dividend, continued the next offer of Moving return approximately in expected shows our expected million investors. Slide to our of graphic our capital compared

Just the earlier this week, approved $X.XX per an increase of our annualized an in Directors of Board annual share. dividend of payout to $X.XX

our our a regulatory increase of rate growth, customer resource use in ensure continued gas Moving strategy At electric to increased anticipate and constructive grow operations focus our Holdings. on and continued continued customers, and future opportunities control energy and to capital sourcing and both we services a offer We strong our value favorable a optimization, hydrogen, Infrastructure services, growing cross-selling cost Slide dividends to to increased very increased in base, and combination and significant efforts results dividends. to we Southwest cost anticipate continued encourage XX. the to earnings continued of continue our excellence, gas outlined profitability shareholders. our focus growth and sustainable RNG, Services refinement to operations, Centuri natural through proposition our Gas utility we Utility segment, believe management of cash of to our At we encourage customers, efficiency on investment regulated affordability CNG, to

guidance XXXX a of $X.XX for share. share to expectations $X.XX in earnings XX Turning XXXX. range per Slide and per for provide to We our

$X the insurance of current million. an company-owned average results, included to compares versus to for which of million returns XXXX associated life million expectation $X annual year $X expectation Our with

earnings Moving to Line is provided our XX. Slide detail item guidance. XXXX for

to Canadian X.X%. longer-term $X Gas results. $XXX storm exchange anticipate issuance On can we affirm our Southwest in in $XXX fluctuations through million At rates to customer expected we operations, to expect million. be revenues, to $X costs EBITDA Holdings, income should $XXX X% X% to at million and Utility currency is be by operating our ended Infrastructure to X.XX% returns, life an XX% be to expect equity approximate experienced natural flat Centuri of our to Services Utility revenues Infrastructure of Operating margin At XXXX, recognition expenditures should our influence X%, X-year tracking restoration revenues. relief all of Slide we expectations. mechanisms. expect Centuri to are year. X.X% our infrastructure $X Company-owned and annually. X.X% increase to grow expected rate is remember XX, be we XXXX, is expect we operations, to expansion grow by to billion annualized reflect rate our And in at and over ATM earnings based prior the for program X% of Services for X% $X.X utility X% years to X attributable Group, XX%. net insurance on by anticipate the grow we significant base of to expected continuing activity to and our rate and in regulated Holdings, income to in to to the noncontrolling and million X.XX% grow period ended in million Also, For operating XXXX compared again, net income Gas states, At ratio please X projects Group capital million, are to a revenues. gas should dividend of to regulated XX% gas assumed ended growth, the delivery X%. Operating $X payout X% be XXXX, million, we'll to interest. XX% total Pension period X-year income that investing Southwest expense operations, revenues to expectations target our of Interest due estimated systems to

Holdings our to investors. that believe on complementary offers XX. Finally, and segments X Southwest Slide wrapping up Gas attractive business We

base opportunities posture offer operations gas flow. reliability, natural Utility Our opportunities efficiency safety With of our dividends and our Services of natural focus the great Similarly, an Infrastructure renewable supplies, at utility long-term see on and the continued growth, cash Centuri segment, and hydrogen, group and service energy development and that, opportunities, a enhance customer call to exceptional relatively investment-grade low-risk relationships for system distribution growth new rate and more. we strong operations a Ken. with gas free platform, favorable to clients with increasing return I'll sustainability growth

Kenneth Kenny

prepared That our John. Thanks, concludes presentation.

appendix slides, X These that For reviewed your and convenience. who also slides be an have at provided pertinent we slides information those business with Inc. Gas have accessed our about Holdings, segments. can includes Southwest other its

Sadie, process asking for now operator, questions. the Our will explain

Operator

[Operator Instructions].

from our Bank first question, Ciciarelli we America. For have Richard of

Richard Ciciarelli

think curious, range given assuming your I just Just that -- appreciate giving into all each requirement how that time given the any you wide? the just But you're And XXXX range, relatively are there? trackers is you on just the about guidance, curious for it segment. guidance revenue line and that executing from drivers within

Gregory Peterson

Greg. is beginning the this very at Richie, year. of the We're

we $X.XX I think we consistent this the provided $X.XX provided last range that year. that with is

rate the to the subsequent in So there and year we'll range we do. to to the see Arizona can watch for that made how impacts as detail, but I progresses and the filing the some believe certainly if provide give Justin we additional results. see watch recovery those at after have we is -- is of see all. will into the filing guidance, But level again, there is some and

Richard Ciciarelli

was there said just you that Justin. And detail curious was? from is there I it. what some Got additional

Justin Brown

of set Justin. unique it's I I just a there's that frame. think not -- referring Rich, kind it's mean, to he's like No, in time

get make or We assumptions we So our a filing typically, would by usually a are based in would I past, decision -- on July. in tracker think February. the June

a And tracker the that path. it's fact should follow so similar estimating, to it programs, related of given the we're kind of kind

similar in And to time of what's the our of kind we guidance. decision end so that's towards the year, and reflected see a a of terms expect frame,

Richard Ciciarelli

That's helpful. it. Got Okay.

small just some your thinking stepped bit Or long-term the growth X.X%. can to like needs, looked on programs about end not And I given I tracker And numbers, anything are there guess you prior rider or detail into rate the at what's your the amount, there. of the that that on little then are between around those altogether? a X.X% equity tad the just included So in that year. just there from X Is go how guys of base guide driving the up there moved It if delta assumptions. is there? timing guess, more down that? you a

Gregory Peterson

Greg. can what math, drives the just CapEx. down that X-year is guess, this saying by is I on the Richie, One, really start. I CAGR

year was $XXX CapEx year, a If beginning base. expectation on million still it rate you a a remember, lower of last

$XXX was So going math XXXX, the that continued drives in XXXX. comfortable with executed And think available million, pretty through And in it XXXX. little a as see to out what range. we We we we've that $XXX up bit. that just million we're the forward down

the dollars. to start we're guess I of relates it billions needs, I'll round of using tens saying equity by As

$X.X so $XXX just from by up to same And but the make million that $XXX work, to it's the it things ticking was before, range much up math equity, billion. as what you million pretty end

mix XX-XX that there's again, So anything equity and I are our wouldn't books. think say that and to debt have to good that But work. that's expect we math than it's the driving it Other place We we this that a be. we just maintain that. on makes ensure working

over course be stay along And so the where years few way the next we the to ensure of that's equity we issuing will that, at. all

Richard Ciciarelli

All increased into weather is particular? sneak in the I That baked last can was if weather business, winter events to your that your just one, the And it. helpful. infrastructure right. it recent expectations? events caused has very And demand current On in. Got that, any

John Hester

Richie, John. this is

has the that weather kind for little think plus bit minus. I recent been of of a and event Centuri

significant we've that had say normal that other then with some they were, slowdown that kind that utilities. to seen as of doing weather were would bit with opportunities restored. any conditions of in with that facilities little uptick caused had And limited wouldn't they as work work utilities you that a So be I to needed be poor the their

So I a to expecting not most big recent that out that we're of would storm. say increase see

results not a change it's -- the as so in XXXX really reflected And that our weather. XXXX XXXX our result guidance and of wouldn't

Richard Ciciarelli

impacts fuel experienced? that any all I'm assuming And helpful. you Or not? very That's Great. Okay.

John Hester

see see customers. of on prices on is experienced customers, gas of get We fair off Arizona gas gas some amount We that of the the served we are some did actually Texas -- again. did El for which primarily our with John, a impact We impact Paso. this out our

including mechanisms notwithstanding the now. some part our rate-making take impacts Pipeline. back, that we with of Pipeline, experience we think discussions did our systems, accommodate and on some customers, will accommodations River, that that we might us in We're saw have are think going we're that experienced. of jurisdictions happy our that some of, cost see the of pipeline use any in see pretty got to Northwest at, We've to cuts we're costs regulators, tallying kind some we our look of our the end any there need on something incremental each pipelines there the increased But Ruby it's that lesser the was to But that. go customers. were Kern that if gas outages we important for a I for off interest we up other of take incremental not make those

Operator

Richard For our next question, from we Sunderland JPMorgan. have

Richard Sunderland

there. follow-up starting be point length period on a recovery the potential of that you The Just alluded maybe for that around last or combinations off would recovery. to, sort timing of with

Just curious more. bit that if speak a little to element you

John Hester

is we're about, talking Yes. exactly what This Richard. John. That's

in and got take that compare our service a fluctuations in in How bills with want probably I that look and bill Nevada our the that do seen you fluctuations time. at as know, over probably average of something the And is those the Southern neighborhood we we've will Arizona to relatively low historically? is territory, think be we've bills what $XX.

looking longer be there are operating less to that normally be what half want amortization costs to when than we consider costs and of increase yes, want bill, at the it. But under a the we gas in we than mechanisms. is, we areas So normally particular at any would would would looking thoughtful included gas what an be are period

Richard Sunderland

forward two and That those to on regulatory on it. just here, we update, cost; just makes one, the maybe should sense. total both, -- looking when an Got expect And discussions?

Gregory Peterson

estimated Yes, pretty long. that these We have $XXX million to of Richard, this flavor that incremental we is Greg. costs million. I know bit were at did a estimated our period say incurred are little $XXX gas that to peak over documents

that seen other peers big. have utility numbers our that that I climates XXx of we've colder So in operate some -- that much think are

probably So with intend time our our And that do will give million with actually won't we the any QX meetings assess have that is until We regulatory $XXX million. timing us body. to range to come we the and $XXX do that updates to out the report. also with

likely until So May. QX in I update wouldn't early anything the expect

Richard Sunderland

Great. then one appreciate color. the for And I here. one final me

Just look return the the earlier were in But the changes like some around made overall commentary I COLI it but this, apologize, to have all. the forward. misunderstood doesn't volatility changed at going the sounded like if there I script, it expectations portfolio

you So just thread any X needle of other those elements or could kind the considerations here? between

Gregory Peterson

Yes, certainly, Richard. This again. is Greg,

driven of had And As returns. our last you run increase, range million those know, $X of by are $XX.X million. X $X.X million right, years, ups, really we've some million the at stock $X was XXXX, significant in been increase. it has market least to And the a

activity $X.X go market it in you in XXXX. If another back COLI because was of million the stock decline a year,

really changed. have. just overall expectations type is you haven't any investment our balancing portfolio other like So This

are our to values over move half XX% fixed things that So cash about the the like year, more that market. into we've probably is of now. that them linked of number probably out a component. stock invested last surrender more moved in and Previously, things talked That having of in stuff return stock moved I

probably range. more XX% in the it's So

million surrender So over a the value. to million to base million good $X still got thing. of big is a now, work $XXX cash with $X We've

think I still will the So range be fine.

we this that get on because the I minimize million. ultimate day, based the about life $XXX from of end as policies, to the proceeds total is those that are come intent Our from the insurance at which, volatility actually the indicated, dollars

Operator

our For Williams. we from Siebert question, have Chris next Ellinghaus

Christopher Ellinghaus

about you're in terms talk a Can opportunities out seeing you little investment decarbonization of what bit, there? John, RNG

John Hester

Chris. Sure,

and opportunities that we those think I existing now see growing.

pretty venue. I been have think us that into that regulators supportive moving our of

We sewage a of plant treatment produced part a are lot whether you're who their the of partners. customers or interested is as in dairy of landfill, that methane same harnessing a some an in for interest a or that a that customers getting you're lot have farm those not is operations, of those necessarily bus municipality, gas into your But supply experts if operations fleet. gas of they're in a and the distribution. you challenge have renewable Maybe

capital accomplish helping us to the and them has been goals. So them, commission investing of supportive those able being partner with

to and that think right now, So expect we grow we continue it's over to time. happening definitely

Christopher Ellinghaus

in areas, market You acceleration in a material. and an sound housing like new that's have very Phoenix strong you starts Vegas housing in

John Hester

And is some I lost if increases a live continuing that in to think still demand the of to homes. the regionally, buy affordable But There's has word although, have new inventory. a service price, of Resale that a market. Chris. asking, we're you in you're housing -- see very there, definitely market it been very said I accelerated. acceleration by It's a seen amount strong. people our territory it's decent homes low high relatively

at increased on have certainly, you prices you and that of see if homebuilding their and stocks, I look can significantly. their to year going see we that through this think and revenues any So share profits continue and the expectations

to reasons, number for And other in by have lot followed that be some other a legs continues you think for incremental including going for might to the significant here, to tax Southwest Desert of to able have seeing that years, considerations, shortfalls we So interest the related that to states that as of be we're thing tax I are relocating this enjoy to the think increases. you've the that, lifestyle tax different continuing significant a and followed individuals Chris, to alluded that grow. I is

So bright. future think that the pretty we looks

Christopher Ellinghaus

Okay.

you your of Arizona, from commission an there's been in some tenor there. the significant where view Give see Justin, point us assessment forward? sort the of at of changes commission the of going

Justin Brown

Justin. had changes. you with Chris, chair some a there's point, election, Yes. been your the as With To -- new well. this it's

several think -- of scheduled Chairwoman with new be meet a week last got O'Connor mean, Márquez Peterson, and Anna still in far, have to them, this Tovar. Lea a we in things pretty met new where I we've it's in a new But couple actually, to left positive. So meetings I some to Jim I so with. Commissioner seem Commissioner know

legislature well being We Mayor of as her given have Tovar, the as relationship in state the with a nice Commissioner long-standing former days Tolleson.

that's So had O'Connor, pretty meet with to respect I yet. chance know know then to we someone him a haven't Commissioner And well.

is next we've former I a week understand. think good And friend my with is got pretty what they Little, understanding Commissioner. a is understanding are that who's a like-minded, he's that's meeting I Doug but someone with him, my

And ACC. pretty working Doug relationship hearing regulator thing. he is so will a be good And Because time if we're definitely I him to that think -- was and a anxious what to get that constructive the little, he's correct, minded I'm similarly if think at as with him think well. know I to develop Commissioner during Little positive I a his

Operator

we last Zmigrodzka Our question, have UBS. from Aga

Aga Zmigrodzka

I on question have one filing. Justin, the clarification final VSP

be increase? VSP? and will I increase gradual should think Or onetime for $XX million. we of for Is increase you And rate both coal rate over mentioned the that VSP? more it expect time

Justin Brown

Justin. Yes. a That's Aga, good question. it's

of calculated So that's as it. kind total we've amount the

total. in second part that your to would -- really, so so And be

all that whether, year So theoretically, the multiyear part then probably there's some or And that's a second components. of that's flexibility think on if one X includes a I is, thing. that

surcharge. -- XXXX things case a our that ultimately, recall we years. rate over in surcharge commission case, and time of made $XX the and to there increase at our we had you pending proposed that to that rate to million to moved the If kind the froze and we surcharges when rate had case, amortize was the filing X Well, we the moved

applied we over it's terms the to precedent whether mean, get there's this component staff part year whether years. of a all So that's as of little three people look where three there think a that's one be fall. may of by with whether I look And again, or bit and working to summer the that's to the I we'll in hopefully, one that some decision, or commission components, process a

Aga Zmigrodzka

the kind growth? a more. or going to have to thinking in it accelerate prepared What's mentioned potentially the little in connections those Do tariffs was that you Are projects. bit that the elaborate of remarks, think now about If I RNG on you basis? development plan spending be the grid-based that rent-based? of annual that costs invest could also about you you're In for Could just the facilities?

John Hester

is over this I'll start Justin. then it maybe turn and Aga, to Well, out, John. I'll

that would forward be think investing moving that I with. plan considered million $XXX facilities included RNG capital a increased to the for be opportunities in related we in of to that year

acquiring work with interested that through those I that and have supplies been who the primary not think is that our process. regulators in types have naturally it pretty the we those and to might operational working of us interest customers pretty regulatory The have supportive of in working with experience fuels.

Anything think express would Justin? on So be in I plans. that, included go capital expect to I it up. our it But that expenditure to continue else

Justin Brown

Yes.

as arise. on I So they remarks, couple touched in and support working focused place Aga, a been we on of X starting that describing ago, is in getting slide as the what allow he will was opportunities prepared John reflected with and think that on on with have consistent those just frameworks years states the all

further. talk case. -- our workshop this rate to got We've about later a to some in Arizona. got tariffs Nevada. Arizona some so to And good continue we'll we've They're had going a proposal We good and on legislation California year in that have

we'll place plan bring arise, so available And online. so when in partner continue to again, those suppliers, that get is resources these municipalities them we able framework that can opportunities that be those to so have with our way, that, to

Operator

showing I like questions the to I to Ken Kenny. at further time. turn back this conference no would am

Kenneth Kenny

conference interest have Thank a Holdings, your you, day. we appreciate and Southwest participation and our Sadie. Thank Gas in This call, great Inc. you. concludes Everyone

Operator

concludes gentlemen, Ladies this and today's conference.

You may now disconnect.

Southwest Gas (SWX) 28 Feb 212020 Q4 Earnings call transcript