CPK - Earnings call transcript Q4 2020 | Chesapeake Utilities Corporation

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

Operator

Greetings, and welcome to the Chesapeake Utilities Corp Fourth Quarter and Annual 2020 Financial Results.

During the presentation all participants will be in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, February 25, 2021. I would now like to turn the conference over to Beth Cooper, Executive Vice President and Chief Financial Officer. Please go ahead.

Beth Cooper

afternoon, good and you, everyone. Thank joining We fourth to our today and appreciate annual you quarter XXXX review us results. keeping as We at full coming normal, and months. new effectively availability in as Chesapeake Utilities vaccination continue serving to of the our in await as we possible operate COVID-XX this employees the safe the customers

Secretary As today and President Corporate Householder, Executive Officer; Chief are Jim General Slide Executive and and participating President, me with Compliance X, on and Jeff shown on call Vice Moriarty, Officer. the Risk Chief Counsel,

for We joining & also under can on management our the have other questions. Events members up we website subsection. Webcasts of be us our team remarks, the our and open prepared presentation virtually. section After Investors Today’s will accessed call

provide you our annual into on today our Our to our fourth estimated of new to update objective opportunities. results, key XXXX initiatives the in our COVID-XX is as on regards and business well impact outlook in on the for review and future progress strategic as quarter XXXX insight

X, to risks remind discussed matters and that that call like forward-looking this would conference uncertainties. Moving you in may involve to include I Slide statements

for from the Form projections statements differ statements differ Forward-looking that cause Safe section factors further results. could information actual provides from actual company’s such XX-K to statements materially could The results. Harbor XXXX and Annual on our forward-looking of our Report on the

to to results. call Jeff and the over provide the key XXXX turn to Jeff? the our remarks I’ll drivers opening performance Now, company’s contributing on

Jeff Householder

had year row a resulting operations XXXX. growth year for in joining Slide from XX.X%, our continuing Good of XXXX And our X, afternoon, call. on in year-end you strong earnings. a XXth and We earnings earnings record in very increased as shown thank

XX%, something a is also done on since year return which we’ve each XXXX. equity above We achieved consolidated

approached achieved a our extended these peer I’d note and quartile an us capitalization. group significant we consistent total of employee record represents total that This period. enabled XX% a where able capital safety million, in procedures Chesapeake Our It’s year operating essential accomplishment team uninterrupted year top an once provides. continue representing over that track were services our of the is to $XXX again financial earnings and year. results performance among throughout the to the extraordinary of to has identify a our that been delivery dedication we energy investments testament

the of One the significant growth was happen. I potential had didn’t in pandemic That the of of our as completion concerns momentum the intensified capital loss projects.

XXXX keep our able on find was projects margin to years And team ways investments to growth schedule. strong safely and to Our come. in will earnings for deliver

propel earnings annualized long-standing reinvest capital additional increased of business of resilient the time, to over the and is part relative correlating consecutive $X.XX followed closely to We’ve to S&P increased price our downturn. Our in declared annualized above consistent dividend year, end return portion our practice SmallCap strong Board pre-COVID-XX stock utility the and key to able growth At We shareholder XXX share, inclusion the during strong, stock market. proved the broader doubled significant dividends. been per growth our A our earnings Toward dividend index the total per future reflecting of Chesapeake a now Chesapeake back share X.X% past XXth through financial year and into dividend. earnings years. levels. the our our same we’ve performance, XX also of an maintained pandemic-related the investments. dividend of losses our to be subsequent annualized the increase market our to significant the in the value an of

for the performance As shareholder Utilities return top of gas XX%, exceeded level among total shown Chesapeake year. the utilities the year-end, on Slide all X, at of

return periods shareholder to our has value longer-term historic quartile XXXX, for growth I XX- and period, exceeded creation total strong XX% was well. three, our as performance XXXX, XX-year shareholder each upper representing over five, return it Including annual While equally peer long-term our to is total the consider compound believe for group. rate important one, compared

fact, was growing at And our million. $X.XX capitalization at represents year results. peers past above Chesapeake share the XXXX $X.XX doubled XXXX company down diluted ended the among or experienced more XXXX $XX on doubling twice income the Slide from totaling In to path billion, Net $XX.X This share. XXXX net significant Shown per the was $X.X million XX increase we share for the another growth of $XX.X XXXth $X.X for margin our of with years. X, XXXX. per our XXXX. Utilities’ decade. business. periods. over to or step compared market the growth by and from income We highlights XXXX the continue per was the company’s than in earnings We’ve a for capitalization or operations $X.XX for over percentile Slide X continuing market $XX.X are an million the over million all significant share had past We $X.XX million

COVID-XX a the XXXX due margin was $X.X stop The of after-tax provide received a disconnects. authorization COVID-XX assistance partially resulted customer jurisdictions consumption, from We the net unfavorable by $X.XX Our primarily total margin higher. per pandemic. In in impact approximately weather would policy results were But gross in to now pandemic COVID-XX-related the assets regulated have have A impact in even during offset create decline regulatory by million share. of each of expenses. been we expenses. margins million utility driven $X.X to to significant or $X of to customers our million service lower our net defer distribution impact they and and in nonpaid XXXX, deferred to

various necessary review And COVID. these with continuing estimates adjust associated cost to future. the We’re impacts we’ll in the as

these businesses say over like long the provide regulated manage continually straightforward. and to footprint. We growth term stable, our non-regulated investments expand our that predictable seek for foundation, we a can We or to Our internally, strategy to opportunities look earnings that fairly as which seek our results three exhibit our fundamental shareholder related meet some on return business we’ve than in and of prescribed short- energy consistent utility our augment earnings core adequate to are: been two, risk Slide existing XXXX. highlight to three, activity non-regulated businesses. higher and few a total year. of provide criteria, can We of profiles investments targets; these accomplishments utility with in And meet return businesses; outlines one, in is our noteworthy peers by had targets. growth, that primary driven we capital let constantly projects of our both And drivers On on and on X the last we Slide upper growth performance, an key our of identified quartile product significant return investment achieve pursuing. the the X, and long-term have all that accomplishments. of almost me those areas dividend

the our business significant to make $X.X have our continued internal pace the with had we keep make management to organizational on XXXX and We That do achieved actions objectives. are billion, of of level our goal, skills, process may set our company it and structure taken previous twice simplifying and can in planet. this you don’t size sure our a beginning achieving years. that painful a the growth capitalization with units. our processes, pandemic business business. We’ve five across need again, COVID-XX standardization our of of greater To impact an our seem toward across organization our already experience underestimate transformation structure, I to tragic The to ambitious, think aggressive progress on been but we employee technology the has XX able over approximately initiative. unit growth market years. the At of goal double we diversity,

COVID-XX However, business to address and and several process has processes, facility our and safety forced identify our elements, technology, design work training as has our organizational the challenges responding significantly our our accelerated planning. such introduced remote in our into weaknesses transformation practices, new to our us structure.

business the Florida Delaware for earned and on we our Chesapeake all culture have core strengthening appreciate USA saw hold and survey that once feedback recognition of company in it’s know from national this of mid-sized us We again awarded a solid from this the all inaugural year. and and we’re for of the award traditions companies. recognized by Utilities XXXX to results party was units important success practices, employees. special and are our While place and at our last on a based Top as Workplaces to to operational our We workplace made top that work. third contributions business earnings a

our in for Marlin from gas pipeline rates gas Elkton reflect Aspire higher acquisitions of propane operations regulatory replacement, Our Gas distribution the expansion new Hurricane projects, Services, propane the margin settlement, Michael results from Natural and natural operations, Gas distribution increased Western margins, organic increased retail Boulden Energy. system, pipeline growth and increased earnings continued the natural

also property offset We gains cost of sales had on that helped two the pandemic increases. some to

in continue strong earlier, and Pipeline Customers went our Callahan XXXX. the service to As budget, as gas result, service million And $XXX customer more notably, twice continues choice. XXXX. the in our of I in Peninsula, incremental we into than mentioned gas Most expenditures both prefer We regulated advanced territories average. Delmarva in their record our expansion Florida $X.X to under multiple energy of in pipeline in growth natural early million. Capital investment continued totaled the growth producing projects. natural national and margin Florida a as be

achieve Florida ATM of helpful rebalance The and companies in I these plans, Delaware Chesapeake and of S&P target. the index XXXX. integrations in from which Gas our Boulden new completed natural was in completed line propane and and acquisitions two XXX equity Western SmallCap structure system contributed equity were for all We Maryland. $XX.X the acquisitions Utilities our gas they program go million year our bottom Natural the September. Elkton also certainly capital last worked on in hard in propane our earlier, the and We XX% seamlessly, We to mentioned various obtained to stock of

achieving retained XXXX, total back turn more results million the capitalization. stockholders’ earnings in call Beth? million of $XX.X I’ll in XX% our We of Beth to XXXX increasing to to $XXX.X also equity and discuss the detail.

Beth Cooper

Jeff. Thanks,

Turning compared quarter last year. of to same was million to quarter Slide $XX.X income the XX. Net the for

recognized exited gains marketing As and all the you on associated the natural exit. I’m with of the we gas during business sure sales XXXX, that fourth recall, quarter

our As in operations, the today were XXXX annually a result, will any quarter largely of absence the one-time despite earnings both consolidated focus strong although for continuing on discussion and I our gain.

XXXX. the result committed performance is The In Utilities operations XXXX per by per margin $X.XX to for growth Slide $X.XX continuing represents the share quarter share as from in across earlier, the for XXXX $X.X EPS new with the Jeff through operations from share for company’s income income grew Higher XXXX enterprise, of $X.XX $X.X of growth. of million or $X.XX, coupled last or net the quarter representing quarter, the the the $XX.X for $XX.X on was to highlighted $X.XX or by development operations, or as $X.XX fourth quarter from our XX% operations $XX.X growth or XXXX. issued million equity Chesapeake $X.XX income to to $X.XX an per XX.X% of of increase and for fourth share. increased of compared per XX%. million shown share efficient of compared This grew continuing million above income because results year was or gross project management. fourth XX. for terms year was per Net expense million continuing

in For Keep X.X% is X.X%. at expenses margin that inclusive operating other increased milder experienced $X.X of and gross in million half mind, less were lower XXXX, – that of margin gross with of COVID-XX. the operating than million increase of while X.X% growth associated weather we margin $X.X up

have operating segment, would versus segment, our our of for XX.X% If XX.X% consolidated basis, XX.X% on X.X%. Unregulated a our been, exclude reported impact, COVID-XX Regulated X.X%; Energy versus Energy reported versus you the X.X%; income for growth and

collaboration in support growth, expenses the mentioned of expense our the focus laser the continued pandemic I of company. across of terms and midst managing on our In in

for new also Excluding Energy margin was acquisitions, for Unregulated our expense there segment. incremental Regulated other Energy our with X.X% corresponding growth where was X.X% our growth, on and associated operating X.X% a segment basis, expenses the a consolidated

into unfavorable insurance our costs attributable COVID-XX remaining consideration and to to this effective taking keep costs. is the of offset cost of our acquisitions Overall, and helped All higher insurance. management expense impacts operating the flat, increase

for drivers XXXX XXXX on amortization excluding impacts Slide and of We $XX.X our increased margin property expenses gross per expansions continued and Finally, that the new see margin key associated And and of COVID-XX, $XX.X tax or million and XX. $X.XX can compared with increased depreciation, investment new related property what And weather this presentation for gross million the growth show negative our us. to is is initiatives. a share. to you

added had expansion expenses. $X.XX per additional share. per the Boulden, Western However, reflect share margin per Organic the of distribution $X.XX natural increased expenses the Natural with there’s and share. Michael added of share offsetting also earnings and XXXX incremental the amortization earnings impacts Marlin projects associated Contributions added acquisition net $X.XX reached in for And Hurricane per $X.XX acquisitions Hurricane after regulatory Florida settlement growth Michael. with $X.XX associated the regulatory with some depreciation that’s and Elkton operations assets. share. an Higher Gas gas from of Pipeline associated that added PSC. of per increased from their

essential Shore’s generated per gross our by again added $X.XX margin weather, capital share. $X.XX. had in unfavorable due incremental margins for third the highlighted expansion quarter operations propane $X.XX benefits decline to And added These that per we CARES per we customer incremental are $X.XX for regulatory services the $X.XX retail by propane with non-service $X.XX impact had Eastern the share. continue expense distribution contributed share. our the consolidated well included driven COVID-XX also Rate net quarter. and GRIP release our program from some provide including improvements our margins resulted COVID Aspire by per in margin and consumption, from that quarter earnings fourth XX per in increases offset net of share, Our incurred press distribution Slide estimated that as projects lastly, pandemic increases And the of higher primarily for that share. impact were to a to the as natural electric associated The the net lower tax establishment Florida the again from fourth a implementing gas reflects of and and Act. table our businesses is assets on

our agreement those refund various Given would The thought year, to per be income million, basis, million on after interim highlighting spending capital mentioned we an a plants charge; $X.X our fuel components results recover new out annual and overcollection through annual in plants. initial be increase useful moments contributed removal details. On XXXX the this settlement of to settlement effective of net million of allowed the XXXX. the to forecast and the rates for base it $X.XX with rates I cost FPU the settlement lay interest, or in surcharge amortized surcharge revenue first, third, I’d XXXX. regulatory the capital and record the in amount including our tax share, and previously. like million for the undepreciated magnitude annually; for a costs X, collect costs of storm storm as and a assets a associated and storm for which for six regulatory were $X.X total of November $X.X finally, second, new over $XX.X few in years; an the The will recover of costs asset to: spend through

As guidance see Slide year. that on XXXX spending we million, the you for $XXX can provided XX, the within totaled in

the within requirements. the we growth in invest to continue and in work guidelines course as normal safety COVID-XX projects opportunities We of

the assets. budgeted of The million. Our initial for regulated new new Regulated similar $XXX between businesses with capital represented expenditures remains million XXXX. and concentrated capital transmission about XXXX forecast $XXX in Energy ranging distribution levels, XX% investment and additions is XX% at Again, in

five totaled $X XX, expenditures the billion. XXXX, capital ended December years For

we investments represents completed million the the on largest XXXX XXXX. guidance scheduled of touch we over one will million capital estimated $XXX tandem recent distribution through spending on in that to of represent to $XXX These associated gross in drivers the by expecting undertake of invest Jeff continue economically enable pipeline gas demand be customers. or Ohio higher of just billion, growth our These are XXXX. in $XX.X will million XXXX terms completion expansions of be In Incremental Florida, a reaching our projects our guidance pipeline by in the quarter million and and of margin XXXX, in expansions new XXXX. to exceeding Slide expanded services XX million driver $X the minutes. Further the as to already footprint, and few these range. of expansions our service system projects commercial our projected pipeline are systems to to continue are distribution including increasing and for end capitalize end a in XXXX Delmarva. $XXX $X in span and for with is natural XXXX billion lower-end $XXX through of XX% the on fourth residential once expansions viable of fully estimate to

incremental projects generate and RNG shows this. incremental million added pretty shy Slide table expected and Our expansions, on XXXX, initiatives and our represents Western XXXX. double growth In XXXX and are million for expected approximately familiar and all Key $X accounted by million Pipeline $XX million these $X approximately margin think in We proceedings transportation, are initiatives is of XXXX you million in acquisitions and settlement Boulden, are it to initiatives. respectively. the margin projects million remains years margin $XX $XX total, XXXX regulatory Gas, incremental $XX.X And recent million pipeline The I XX. Elkton particularly of And million in in for with XXXX and approximately from the contribution. estimate shown latest that at acquisitions note for Hurricane to XXXX. gross expansions the projects the and of the in for $XX XXXX for million $X the and $XX and XXXX, XXXX. XXXX, $X from for margin margin Michael level generate million for XXXX Natural incremental CNG

include reminder, rate access cetera. for include and a future sheet projects strong not organic competitively projects only the the distribution, As priced our in margin, we our fuel support do adjusted from businesses, growth new announced. customer margin definitive and we’ve additions, the will have be reach ensure example, are with a transportation experienced sufficient, definitive maintain to this adjustments and capital once we we capacity they capital. as Accordingly, RNG unregulated et maturity table growth, to To growth balance in

As of XX, end at of was you can portion current debt. short-term and XX% of under see debt, stockholders’ Slide revolver the on capitalization long-term billion as $X.X XX% rate fixed year, the total long-term equity, borrowings of XX% including outstanding comprised and the our debt

During XXXX, $XXX net stockholders’ equity incremental capital, long-term million in a including we of permanent added debt. and our

Our recent total capitalization to equity equity issuance moves target to range beginning XX%. us at our

equity traditional earnings new our just proceeds plans utilize rate program our We plans to and in and average various issued equity in long-term to successfully an new in gross stock $XX to our retained under and stock XXXX utilized and ATM at first continue We increase X.XX%. raise million beyond reinvested equity million business. in issue the of debt $XX

administration source. our streamlining capacity facilities also short-term and while restructured funding to provide the We additional enhanced debt of this also

prospects to I the to capacity growth about Jeff? corresponding to add to back would our will extension our look Jeff of on We our growth call for and updating to our plans progress. supports turn like you and that continue now future guidance. strategic forward talk

Jeff Householder

our this in we a employees Thanks, been is latest to end update. the plan customer XXXX, be of our for the strategic significant our energy contribute present our On to of and delivery that time reduce far for areas the Beth. meaningfully are drive annual Chesapeake key At I’ve challenges and be fantastic that of the expansion. we of We platforms we’ve faced continue to few that telling we opponents meet same Those that we to effectively, Utilities. serve. years. potential, investment part At our business communities the in denying these These industry our are need the time, next Slide carbon energy and We investment highlighted challenges demands finding by a will believe respond raised cleaner transitioning no that with certainly ways the growth. growth economic strategic for will fuels. footprint. opportunities focus energy from to fossil to limiting growth many world. challenges carbon extraordinary times lower XX, to There’s principal over require well-being the we to completed

in First organic our and operating is our we through opportunities collaboration across and growth, existing regulatory units. want to optimize increased the initiatives for growth businesses efficiency earnings

of of dollars Our our organic of update existing investment opportunities hundreds plan significant recent represent opportunities strategic within acquisition. without units. millions identified growth These

Delmarva, increase opportunities of gas and meet demand we pipelines capacity to for natural distribution intrastate projects our Second, Florida, continue to across to see Many other interstate as expand. pipeline for continue and Ohio systems the will growing states. these

during Our pandemic. service growth the areas have experienced tremendous

think with continue Third, CNG in growth likely, area. to of larger along we in fourth, core and market Southeast, Marlin further we expand acquisitions our Mid-Atlantic propane business propane primarily AutoGas a offerings Services’ And is business. gas Gas our to the the through expansion

transport pursue and And identify In opportunities. RNG at our capacity aggressively to pursuing the recently, us unique we transport a the transport CNG same we’re added opportunities offers increase potential LNG Marlin opportunity to agreements investment across several renewable our tankers to help capabilities. And U.S. time, fleet addition, RNG

for is Our Slide growth we renewable fifth XX. energy discuss on investment, platform which

is projects. of past advancing. and participation Over and the working And announced we’ve levels. renewable our finalize extent participation our the we’re year, projects of to in Each these energy actively several scope investment

you Let projects. our and our of describe emerging me update on some progress

furthest are with CleanBay’s On and DevCo we’re are Peninsula, projects. facility Renewables working the Georgetown, two R&D waste-to-energy DevCo poultry Delaware projects Maryland Westover, Bioenergy The Bioenergy and along project. the on Delmarva CleanBay that several

pipeline construction activities have construction for opportunities solar developers use blend site with sites, the and in plants Most production, of respective the In one RNG a investigate to to terms. land various are we complete provide negotiating LOI Florida, one place an included renewable other before thermal away the begins, Marlin at photovoltaic to deliver development financing systems of of transport, renewable CHP the take potential construction for the gas offtake, agreements As RNG organic gas and gas processing, final permitting design power fuel fertilizer and Solar currently our or we contract working of and that are investment final in Turbines list Island. and at Flags and opportunity in Chesapeake either place on potential operate under of investment opportunities. Eight a Combined to we’re hydrogen the to utilize Power to Amelia plant Heat have

In a fact, letter and support with research in hydrogen project. yesterday, of executed our development to we participate Solar Turbines

a Our of to to the goal utilize next that fuel few is percentage significant hydrogen turbine within years.

fueling port of Savannah, CNG under Georgia is Our station construction. vehicle outside the

sites connecting on choice. landfill renewable will with port scheduled a scheduled marine working agreement markets. landfill announced construct offers later gas as transport increasingly gas and this Fortistar Construction CNG a soon our provide is gathering the processor RNG But the a opportunity in renewable and to support to Aspire begin vehicle us would interest trucking Ohio, year. margins site on system. for the to pipeline We attractive to an fuel fuel. processing of the RNG to We’re pipeline several premium to of an as vehicle fuel in-service is that vehicle enable use CNG to

strategic facilities, agricultural as our that updating opportunities. system additional to solar projects renewable look investment host all other for years. These to RNG energy details public finalized. of of forward opportunities discipline our several and projects, And working that same waste over electric gas is that quite announcement. note processing and stage the the you not on renewable I additional other applied strategy are objectives we’ve many the at an also a projects landfill investment of are investment generation We’re with aligned I should include financial

We’re aligned our looking meet core linked our financial that and businesses, for tolerance targets for with are risk. investments our to

not for renewable having simply are investments the a investment. seeking We renewable of sake

capital XXXX current earnings guidance the originally was XXXX. Our for through five-year issued and investment period

announced our announced of projects and strategic and major margin extension already and updated in table, our growth we included EPS the yesterday, plan guidance. our Given an capital

$X us our that extending we’re of our Slide $XXX Slide degree XX, five-year gives that EPS plan latest to of period a for strategic to you million ahead for our As excited have high we investment additional also see three-year opportunities to On XXXX an can significant resetting XXXX us. guidance period confidence through on we’re XX, I’m guidance the XXXX. capital billion. update

earnings XXXX per on share guidance projected from represents is guidance our ESG to The like an to XXXX end $X.XX XXXX. now range to you average approximately of Jim the $X.XX. initiation turn in the Our Jim? diluted of update of to over call range I’d growth XX% EPS plans. practices our at and

Jim Moriarty

Thank you, everyone. afternoon, Jeff, good and

is As on on Chesapeake work on day. how Utilities focus XX, every Slide bedrock principles. dedication shown to a commitment to build environmental to ESG, This and stewardship, continues our social justice we to sound governance

our promote workplace areas well which our for and and recognition engagement about of the communities. culture, consecutive year development we the our one employees speaks serve, awards, the top Top Workplace the inaugural as and inclusive in volumes Our as in as and a ninth to growth our diverse recognition USA continues

long-term and by presented has when vibrant evident the the Strong more not could corporate stakeholders. pandemic have been creating safeguarding social all COVID-XX justice that governance value opportunities the challenges than collectively we culture to Our been in XXXX, to our were to and actions. and any to commitments essential presented inclusive for responded

ahead. informed which effective guidelines and we have more road as ongoing and people, critical governance. Our for Board continue our beginning its extending company a with be and the have our together Active not engagement, Board committees that provided important chart could is to framework policies other to and the adopted throughout

environmentally and organization. facilitates to responsibility sustainable Our operate furthers manner a in stewardship across and friendly our practices safe our

of vibrant team, other, initiative, workplace in our discusses each is our our risks with and an customers to priority, safe we short who and providing within make our serve. safety term our input ESG-related are. risks. is long Directors, and factors our are enterprise and program important and for only we from of Embedded culture committed to a of also our of not the strategic it ERM to identified with priority are Our safety, top the risk and areas is as key the It program. part term. a Safety both employees part interactions the communities we in management the regards Board emerging mitigating In center

regard is One both facility Delaware Town of latest and of Safety classroom technicians. our our for Dover, to this in the operations hands-on completion training accomplishments in provide the

this is our about and provided our Chesapeake excited long-standing unwavering of stewardship, inaugural and report, We highlighting the are ESG also next later the year sustainability commitment the will step which team. be dedication in

by EDI committed around that to be diverse and our who experience to environment and In busy feel Council guide Council our company. skill providing continue forefront is supported a the the part. are their will plentiful doing is affordable value providing to we working is payment serve enable be of that that instrumental with in work communities improve no to The the We ceasing energy The midst benefits other to central continued to to been newly or organizations We we to talent, company. Diversity accounts on we make Equity, have aid and and for brought we the rollout want business. have The engine so our in every groups EDI path that Council the plans to vision and that and experiences communities and clean, culture they – & place share funds to the better our diversity groups for the our sets all the bring fostering company. driving is XXXX, inspiring and our mission enhance is these backgrounds help we and the is one XX. the skills EDI, community each pandemic, to to collaboration to bedrock Whether ensure be and day resource to us behind. our for delivery help our or inclusion, highlighted their are workplace it help nonpaid continuing craft of disconnects, further employees Inclusion, equity, throughout The left provide who Council ideas formed as background, services commitment a work forward. to customers them that the hard our of EDI are and values that employees local embrace with Slide current and are and also the diversity helping receiving by of to the employee serve

have we record levels local addition, donated organizations. to aid In

underway the teams We to serve. excited engaged projects and footprint our of are we reduce about communities very the diverse carbon by the

where energy take Our needed steadfast continuing necessary our advance the commitment stewardship. it when remains steps environmental to while deliver is to and to

future RNG in help sustainable the examples Our announced more the are how are just communities projects our build a doing beginning. for to part serve. are of These we we

I you You will in of the opportunities for more the comments. closing will all see some these us future. Jeff? and appreciate to pursuing Jeff being many turn with now call today back

Jeff Householder

strategy. the Thanks, Jim. We component long-term believe natural is key gas a energy country’s to

and we approach, more the mix, gas, now time, value opportunities, our execute same serve have the We’ll propane and that RNG this we the electricity. the provide customers to to energy customers. afternoon, we’d services the At reliable focused of energy regard. be loudly have. spoken might our capitalize our us employees, to we identifying continue to the to committed or future. that joining solutions and And markets sustainable do. we like safe strategic expertise we quartile this natural great address our deliver, And top believe performance and you on pride delivering happy a closing, to return. opportunities strategy, In shareholder Thanks have delivering whether take and of clean, me are in business on always here given any all let who questions work in delivery from dedicated also Chesapeake for innovative bridge that our We new thank significant Utilities for the and

Operator

first Sullivan Our question Instructions] go [Operator you. Please phone Group. from is Maxim Tate Thank with ahead.

Your line is now open.

Tate Sullivan

million what’s $X I’d thought please? the start I and think for appreciate mention more year. CapEx afternoon your – detail business, the with And next million project. you a to Can you Can to $XX and Good on solar $X electric you Slide everyone electric comment you. from Thank behind all million distribution, you I indicate that XX. then mentioned increasing CapEx On comments.

Jeff Householder

the is of that percentage storm are Florida. invest it A in very required we in, large hardening to obligated

GRIP biggest natural for planning. to that of recover similar those that have a improvements – that’s very substation new and The recovery it Fortunately, to But side it, on typical bulk serving storm the program we’re customers to us hardening. it’s the there’s additional our will of that a mechanism including gas go enable dollars. part we of couple capital

Tate Sullivan

noted rates Aspire for for you tariff higher Okay. Can do me, that rates usually also then you are And your how just higher secure you business? Or schedules remind business? those in Aspire.

Jeff Householder

They are go rates. please. negotiated Beth, ahead,

Beth Cooper

No. Please Jeff. ahead, go

Jeff Householder

Beth. it, No, take

Beth Cooper

Ohio. place also with have We – cooperative contracts with Columbia, in and contracts with the

particularly, opportunities time. rates renegotiate with we those to co-op, from the time So to have

Tate Sullivan

Okay. you I then propane acquisitions. heard And potential Mid-Atlantic. mentioned the

to what Or another acquire know I you about there. most smaller decide your you deals? do deals, please? out from Can attractive many area. there do some background, those to see? think you companies? to you see mentioned need recent example propane can I propane But are to give What’s what cite need an companies you

Beth Cooper

So I Jeff and add. start can can off then

great do little acquisitions if couple gave And even real them, doing done, a foundation way the they we the area. it all case the recall, similar saw take a strong go Cecil of a County you the pretty And back, also fold-in. It That’s Pennsylvania. our market. in the years us you benefits nice Sharp overlay more Boulden in was to called of Boulden. if had that you was had transaction we’ve ago, Tate, what a at that operation, And some that was of us Elkton. it look footprint around Ohl. a of with up that was transaction overlap that a in bit a one happened if nice existing you’ll of but So a with up

gas footprint, the acquisition, stronger on Boulden opportunity here but we had, a also So with growing necessarily Shore, largest the Maryland, to Eastern areas an player. in But other natural we we presence. a build on the our in we’re have had presence, particularly where not up even and there

a Jacksonville again when but the real the again serve acquisition, And area. we Western Gas Natural that. you us Boulden particular at also parts of then that gave So strong in us foothold Florida, acquisition look gave

So we’re looking of those opportunities. types at

looking to but contiguous anything you expand know at our opportunities We’re there. some might else footprint. startups in if also acquisitions help to Jeff, we’re markets, – there’s don’t also would contiguous in we interested add markets. want We’ve expand I that in done

Jeff Householder

No, that it. Thanks. covered

Tate Sullivan

Thank Okay. for those all you comments.

Beth Cooper

Thanks you. Thank Tate.

Operator

from Thank you. And Please is go our next Brian Russo ahead. line question of the with Sidoti.

Your line is open.

Brian Russo

afternoon. good Hi,

Beth Cooper

Hi, Brian.

Brian Russo

Hi.

RNG you just is country. contracts? utilities the from think if of advantages And I terms we’ve what’s was Utilities’ And around in in competitive lot returns? been of just the Chesapeake Or projects, impacting the Mid-Atlantic on elaborate and other wondering seeing to both landscape a that announcements could like? competitive sign I

Jeff Householder

can I that that the geography. start is advantages one we Well, of have

two so specifically, the Delmarva Peninsula. middle the in And are of territories the deep CleanBay, on project mentioned the projects that service DevCo I Bioenergy and our

California the the the we of attributes for vehicle jurisdictions production, the significant may they in agreements we viable. that in in the similar we for pipeline to with gas, come obviously Florida, projects actual pretty attributes for have that advantage we the gas, a offtake the green whether the other confident if nature regardless green production And or area. market, and are may the in somebody those in not, offtakes other of market we’re physical Ohio example. even, distributor that have We or But else some feel believe

projects production production a it’s transmission connect to The other facilities, advantage a mentioned or not I to economically moment to in that viable thing, system. us these I interesting facilities, ago. a these Marlin, as RNG think, distribution gives Frequently, an is build pipeline the

gets of look potential us Marlin projects lot look so also give at another but And at a a investments.

see a plays gas coming offering many find because way get trying to we’re getting out that projects are And the and that how so years. things I at people over look market to But opportunity. a to think we’ll their first developing

generation electricity are gas, green production at of of like or part carbon anaerobic electric the I the the Because intensity that effect attributes We’re facilities, They’re of least score, significantly projects, opportunities as also has and more. they’re that to gas the do digester the these the seeing, – are with photovoltaic facility projects. even surround but the kind part necessarily significantly provide solar things worth of economics. improve project really which necessarily mentioned, not of the the improving to gas associated things processing the

many mentioned including that. Delaware of And Maryland, organic pretty those looking capabilities. and produce things to kinds of also using but but are in production probably organic thermal gas I usually fertilizer. projects, And we’re the a not that fertilizer the projects, at. of mentioned, so these Many They’re requirement I have there’s that quickly, these for this the ones RNG

services, services another provide the for also so offtake back only drive takeaway the transport thermal opportunity And there’s gas us but services, Marlin not essentially then project fertilizer. to provide pipeline to to services,

of lot there opportunities there think are a we for So us.

Brian Russo

Okay. storms saw the recent Given in Great. the the the seeing increased the South hurricanes in market Appreciate an and that. with you incremental Marlin Gas is winter Services, in Texas into there And are and fall, for opportunities? that? then to opportunity we the situation Marlin Gas segue for that

Jeff Householder

to maintenance. There service are taking revenue agreements and that Maybe Texas a not for I Marlin that see we’ve – kind predictable significant the distribution us a companies don’t so. delivery seen with opportunities not are emergency-based don’t CNG do yes, What know situation. of classic for basis services. stream certainly the we more by are are out on routine related have executing know opportunities of I that pipelines lot, to for facilities a

for of for rather kinds And fleet of tanker for so than waiting the sitting emergency. those leaving waiting phone, are that we trucks a opportunities somewhere are lot the parking looking in a an

stream business. regular that more been path. down revenue significant And We’re trying establish that progress we’ve out of to some a making

we have time yes, where back and be certainly those can portion to and to respond agreements, and some that predictable continue there some make sure on we understandable, of hold time are so we And from respond. We emergency of to schedulable looking revenue streams. for But longer-term we’re fleet more what more may our services.

Brian Russo

to And that how business the you looks Understood. like through five-year XX-XX of mix relative on the earnings XXXX of the give be in us in the sense roughly Okay. XXXX for then of evolve? assume updated can your XXXX, five-year of the will and and might the a the just guidance XX-plus is that’s percent approximately kind CapEx outlook mix Should profile and regulated. It we XXXX? CapEx CapEx

Jeff Householder

but I know that’s you that you wouldn’t comment again, may want a And if speaking, was generally Yes. It target. that. don’t exactly it on number, Beth, around to tell move XX%. good I pretty

Beth Cooper

agree wholeheartedly Jeff. No, I with

looking our I on our strategic as built mentioned, guidance think plan. updated Jeff based at, we

are have a that groups And are opportunities opportunities high were and and there occurring, that so of at our probability it’s – have identified. looking

it it as be over But be more. Jeff – we’ve where it a mentioned, So that’s a bit could about been little less, little could generally time. could

Brian Russo

press discussed forward? cost Okay. gross the going I Could you And surcharge And it that that remain know Great. discuss And see should something programs. then as a regulatory margin gross margin just slide, is lastly, driver again? on the you that? What’s capital just the initiatives, under it release. in driving I maybe

Beth Cooper

respond I to can Sure. that.

our time, will So based and relocation it on do mandatory enhancements needs that to to that are time underway. have projects from pipeline,

incremental in that we to this And will undertake our similar to we’re those But table. our what be of announce in factor to so have you so should they’re going specific going know it’s and GRIP going not in projects something, Brian, we generating we include when like terms those know and we each margin that year." margins say, that to program, much "I’m

Brian Russo

normal temporary some operating then some sustainable? And is you impressive. manage to is that inflation quite going there Is of – it that is see ability should Or forward? cost Great. of cost lastly, your flat Okay.

Jeff Householder

business business units, the I’ll with efficiencies earlier, many Beth. grew in, smaller looking will set we’re I do find mentioned companies we merging efficiencies areas. of similar we we to those time, getting those that the overlapping And of the those as costs. that of and find into we that I in organization. we some of And that, we effectively an larger, together at function. much as first a manage and up transformation can have pass, as in across interest as siloed activities our are find take there, mean areas process that, part many over of continue we’ll of variety think we a And

We’re those much structure a And kinds cost these than the in also of things technology in are businesses. different meaningful that years we deploying of were way again, ago. a in the finding couple differences we’re

drive to down along, we’re costs advantage absolutely percentage. of that. and taking not out We’re as by it some But comes harvesting it

Brian Russo

you Thank much. Okay, very great.

Beth Cooper

Thank Brian. you,

Operator

Thank you.

Our question Montgomery Scott. next ahead. go Please from is Michael Gaugler with Janney

open. is line Your

Michael Gaugler

Good afternoon everyone.

Jeff Householder

Mike. Hey,

Beth Cooper

afternoon. Good

Michael Gaugler

you how And CapEx. mentioned these I acquisitions? presentation, know of geographic opportunities. XX, it the Slide wondering just for or these I’m while. days thinking the you’re be potentially updated about part In with attractive? that’s newbuilds on transmission what been a the And process regions Would look thought a But

Jeff Householder

at in we’ve Primarily, projects had a build history and where long we’re number of of intrastate being these pipelines. Florida, looking able to a are newbuilds,

couple. actually, a another that have power year. And One, I out pipeline there’s there plant we’ll in mentioned this bring in a pipeline We to the Ohio.

excess and the as that seeing, significantly we’re Peninsula Florida the as are for of on pipeline Shore too some growth we small-scale continue both of on without the be in I and the Mike, in opportunities, more to a here, national these expansion Delmarva mean see they’ll text continue in projects, we described, think that to I just jurisdictions so opportunities averages And well. relatively I Delmarva in for than Eastern rates much double. issue on mentioned an

going for gas we’re in in have supply Delmarva for a so need several years. both and continuing Florida to the additional next And

Michael Gaugler

And one able it. a just get the in then all still On in you’re in final. getting you I’m when the or that’s difficulty that mentioned some there know case equipment was the had you if need I you manner. need to equipment Marlin, And past, timely if wondering

Jeff Householder

extent, historically equipment were the some In some has we’re of Yes. that using technology situation to improved. suppliers dramatically respects, that and we’ve equipment. the changed, That the providing the

seeing opportunities equipment so months when seeing to less we and the bring than business. acquired And in were we originally months we’re

Michael Gaugler

had. Thank All That’s I all you. right.

Beth Cooper

Mike. you, Thank

Operator

And Asset Management. is Harbor question with Liddell from go Thank you. ahead. Please next our Roger Clear

Your line open. is

Roger Liddell

Yes, good afternoon.

Jeff Householder

Hey, Roger.

Beth Cooper

Roger. Hi,

Roger Liddell

but on power have you were high against be your brief, a enormously and comments, or than calls, powerful And bulwark I’m focusing being build-out But sector. example there a spoke they the it’s I and gas that there. even in desire could any more be the is though fuel think hydrogen things and can And specificity be you planning restrictions, the renewable very specific call to. important interested so I’d issues. that’s in in this to that of whole to aspiration given carbon early refer regarding – resi would sufficient An prior it’s the forth.

service helping for in therefore other and right offshore shorelines do Now possibility opens development? to and with territories, offshore you’re yourself fortunate wind wind opportunity many be you. shape of powering to that of enough, the at electrolyzers How an up at some unlike least you see participating maybe

Jeff Householder

Well, lot Roger. that’s – a there’s questions there, of

equipment more We – a back start the gas in Flags actually opportunity go how pipeline believe on are for me little systems gas out Island We hydrogen interesting Eight find about I’ll and Amelia sitting an just at might definitely hydrogen. beginning. the turbine our to impact an feeding. us interest to that that offers both Let systems our our have

in as we’re, And early process. so I the mentioned,

to DOE on the to turbine. Turbines folks do with and especially hydrogen, federal participate actual Solar to going some an We’re in research project development related

fact that to to have that deliver it set And transport can gas an believe Flags we the the other also RNG. we impacting by Marlin, without to we as Eight that facility strain truck able given we have as hydrogen opportunity to so be customers. that We have up well isolate

great And need our short, understand on systems all a the that blades equipment, what things long in impact as on test story primarily, and it so we the of respects, see and happens on case a to impact see the make impact again to the number pipe measurement better. to a the and turbine our we

side. going to the And on so this hydrogen committed we’re path down

who customers isolated industrial We pipeline system run so have could that other of on another are potentially we similar similarly and test. and interest a that may type for are a looking

amounts going system, although So their – I it’s time of is hydrogen while think this significant ready inject into actually is and a come anybody quicker – be obviously, to think. before we emerging this market that and it’s is an distribution I may think to than

and feed that. as as solar, hydrogen have gray from to and that far whether and interested producing or hydrogen or quite ensuring As pipelines actually those the that, look that put in opposed in blue at we taking a we’re green energy to comes wind-generated also

of some moment possibility solar can we’re We’ve those potentially of hydrogen basis production right we like going but there point a it company firms, lot things couple a the at talk in doing something that. where where on other about now, are with are our some we of – facilities. I so got mentioned form ago generation the for really hydrogen, that at a power could small-scale not And green a facilities looking

by we’re here it. think next we’ll few goes the So months, But time able as to hydrogen. say in engaged at more I about over maybe definitely a be looking little

so we’re equipment. of We in of looking one in can that Flags that at our systems hydrogen, do Eight have, we both testing as better customer I said, specific gain some at, where and we opportunities, others understanding a performance couple the a and appliances and of

Roger Liddell

didn’t sorry, to you I’m off. Very – cut mean interesting

Jeff Householder

was just your answered question. hoping that I No, I

Roger Liddell

of Yes. another Well, I an it and call. part some important to for save got

Jeff Householder

Okay.

Roger Liddell

I’m forward you. hearing And looking and in further avenue. And thank Good day. developments to this encouraged

Jeff Householder

Sure.

Beth Cooper

you, Thank Roger.

Operator

the there at to for And you you. back are this Householder, you, any call I remarks will moment, over closing turn have. Thank no further Mr. questions.

Jeff Householder

of Good today. much you very I look No, everyone’s questions appreciate we to afternoon. lot talking much. quarter. with next Thank a you And forward participation, great very

Operator

today’s ladies you, conclude ask that We thank you your That and your and disconnect participation Thank gentlemen. does call. you for please lines.

Chesapeake Utilities (CPK) 28 Feb 212020 Q4 Earnings call transcript