SJI - Earnings call transcript Q1 2021 | South Jersey Industries Inc

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Mike Renna

[Video Presentation] Good morning, and welcome to SJI's 2021 Investor Day. I'm Mike Renna, President and CEO of SJI, and we're pleased to have you join us today. The SJI management team, many of whom you've just seen in our introductory video, will be joining me today to share our plans to deliver strong long-term growth and value for our shareholders.

While COVID has certainly presented an unprecedented series of challenges, one thing the past 14 months has taught us, to be a bit more patient and not to take every cameo – every child cameo and dog bark quite so seriously.

So here's to turning the corner into a future we can all be together again in person healthy and safe.

be and certain the other the laws. please webcast in meaning begin, securities estimates contain forward-looking we aware statements that today's of As statements within its caution basis to the our differ cause expectations. or forward-looking our our this And estimate beliefs beyond of persons are materially to wish assumptions and from to webcast we results that ability current statements precisely, expectations, forming could watching control which presentation and would as our We you provided these to our disclosures important in urge review filings. SEC in

today's lay agenda of period. remarks, question-and-answer and Our support out After our a strategies our break vision, and operations, an the purpose, meeting energy. a prepared for includes affordable senior priorities our comprehensive led we'll our our moment of Today short with It's review take represents a a to by important our members that safe, SJI. continue clean for reliable delivering team. and chance us for

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today. our regard this You'll in recent other our members hear about from of actions team more later

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Melissa Orsen

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sustainability a New values and strongly clean and future mission energy with region. our align Our Jersey and for

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I moment discussed. goals of reiterate Before want a to the key take sustainability some conclude, I to we've

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Dave Robbins

the of I It's serve Good today. and a morning, about created of SJI's our as Today, value time Robbins, President talking utilities. spend everyone. I'm to will at each Dave I pleasure you be utilities. with our

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Steve Cocchi

created My be Officer, is Financial will serve time and and President my about morning, today. name value non-utility it's the I SJI's as by Steve segment, and with Good everyone. and Cocchi, In I businesses. Senior this strategy spend Chief our you pleasure talking Vice to all

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XX% provide to on energy basis of rate achieve XX% clean returns to an steadily flows. decarbonization in attractive our hurdle risk-adjusted unlevered investments expected well non-utility returns with increasing Our investments with cash above

metrics our and we year years. improved as through on past a and returning Our credit we future the just today, investments to laying the make balance have finally, rising the past we've XX consecutive And commitment, all will support sheet, prioritizing cash to low-risk are continue focus out remains with growth debt initiatives. a done plan over dividend shareholders and cash-producing for

plan, key to redundancy continued for that investment periodic a healthy consolidated filings growth As and with energy five XXXX. approximately Jersey in by year grow majority well energy capital case will strong $X.X utilities plan reported next improvement you Gas Jersey first clean both assumptions from XXXX our fuel results, our we customer regulatory $X.X growth projected rate modernization, timely and $X.X capital to metrics. cost by the at our our billion can and and plan infrastructure capital in wholesale under from investment safety operating cells released the Elizabethtown in results strong return, a and both management investments X/X rate a implemented our REV. roughly segment equity positive improvement of driven Gas XX% contributions XXXX of approximately expectation off October rate opportunities lag. base results base and and I'm driven roll-in commits services was of X, reflects South Yesterday, earnings asset primarily start a improved as to at production and with improved compared modernization pleased we're report optimization segments. XX% at on plans. reflecting as improved Utility our new stable utility non-utility authorized XXXX, as rates results Non-utility our quarter energy segment ago with Gas growth, and an of Under and approximately underlying base on The initiatives. very a and XXXX over infrastructure in see, base plan billion investments to capital SJI's projects, earning include reducing with our our sustainability billion combined rate a focus years our drives reliability annual sizable both SJI's South to

improvement $XX earnings For from forecasting XXXX, results. we are midpoint, the at economic in a million XXXX

is level the of this for results which, As a nonrecurring but changes tax these wholesale quarter market our $XXX was to of policy, able recall, XXXX. revisions release million, federal gains. Master if and despite forecasted SJI in significant positive originally XXXX base and included management Energy Jersey XXXX Adjusting in earnings Plan XXXX conference other outlined in our fourth level you earnings earnings call, items, number economic achieve New for back is items. XXXX fundamentals,

utility for strong year. customer case, modernization segment forecast improvement continuation through reflects XXXX contribution Our of from the year rate growth, and programs the full SJG's

with includes which equity to a is and is earnings in performance. XX% repayment well to renewables segment economic forecast interest our XXXX XXXX debt, of by management contributions recent well investments quarter. of post this debt. expected also improvement expected strong energy witnessed as economic non-utility also driven as XX% financing the on of is to expected REV. already transactions contribute by Energy XX% our the result to as XX% with XXXX of improved XXXX from results, largely other, production as earnings contribute results reflects interest segment, marketing improvement in Our as Within impact driven for positive of to first wholesale largely

significant well utility through economic forward, the that expectation and five is Looking decade. continue forecasting years SJI X% earnings-per-share growth will of X% support decarbonization strong over half the an second attractive of growth to to the investments next with

earnings. with investments. step-ups operations to $X energy and driven we timing XXXX to outlined outstanding, forecast economic clean per diluted by utility we've the generate in the utilizing million in the share to of on strongly associated utility rate earnings SJI's earnings per will XXXX XXXX Under forecasted and more XXXX increases consolidated a improvement shares share. significant the share outlined our slide to $X.XX with in $X.XX average cases XXX XXX prior SJI's With per million plan, to and plan economic $X.XX majority is consolidated today, Under weighted continue

is that As noted Melissa the for if gas renewable federal mix initiatives, under to during and SJI's discussion I state reiterate these legislation of would result remarks, earning provide lift currently in development XX% that the New in could Jersey would both plan. utilities. to level natural the significant the above implemented, important our at is incentives her at XX% regulated our that a potentially

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range ratio, dividend payout low lower declining a to our percentage, which you by our mid-XX% generation XX% in earnings under in see, forecasted results results by improvement forecasted And As achieving steady our can improvement significantly dividend of in by flow XXXX. declines much a and improvement strong to cash XXXX. in XXXX

significantly In you balance and sheet. balance executed improve credit strengthen today. plan March, transactions sheet financing SJI designed we've our the to ratings fund our capital to our Turning outlined several for

shares mandatory from the sold that $XXX and million. with I million. forward first be months. million to the X.X SJI to next XX.X convertible gross shares same Specifically, these At total $XXX issued a in under the X.X SJI offerings quarter accomplished million expected issued Gross and more the of are and that million outlined. previously proceeds sale are million expected proceeds time, expected XX issued of goals generating total These sold a offerings over than X.X units,

ample stable significantly In to outlooks improved available now to continue to the March we SJG $XXX execution, our our utilities, and our and up at their of transactions, total aftermath and both from capacity as through affirmed ETG SJI, ratings billion with SJI and in liquidity credit S&P available set position. these cash, raised their Following approximately $X.XX million for and a execute growth XX. BBB from We're financial plan of forward negative. have our equity

the we've significant addition, prior and has of the of from debt In transactions repayment convertible from SJI in with efforts units, year due notes mandatory maturities near-term. remarketing well equity the no as undertaken our proactive refinancing as our past debt over the

now our plan. Turning to financing

approximately you clean with for billion, uses utility majority capital our our projects for the non-utility today, and As outlined plan energy $X.X allocated of investments.

the with needs described, flows, about the by generated transactions half remaining needs XXXX I've external equity will be the financing with be X% today remainder cash We financing expect financing, funding our a internally just largely through met from met completed years. through financing over through modest financing. next of five debt Having our equity met to through X% to

noted metrics XX% of our from Along XX% in to to these remain in remaining and see, to period, XX% XXXX we our plan. accomplishes the capitalization plan XX% during on XX% equity and XXXX. we've tremendous equity our sheet XX% gradual you opportunities us modest focused many our forecast defending an a balance FFO-to-debt amount lines, supports in with to goal. plan as our we in this credit as growth of times, As have execute can the before believe We ratings improvement

closing Before positions today. I've summarize an items some to year past very execute I'm overall of pleased with achieve been remarks, perspective, let improvement on outlined to we've me the turning able for successfully financial significant you Mike over that to it we've that From plan today. his key reviewed the financial the for the us growth over

X% be plan step-ups growth and XXXX and timing economic by X% rate the XXXX, of will by earnings-per-share growth our for of A and driven strong cases support majority with in safety, in in calls initiatives. with investments. sustainability plan reliability energy clean driven significant utilities Our to associated our

clean energy and state cash goals align as of that calls for as significant investments decarbonization plan well earnings. and our region flows both and the renewables produce support of strong with Our in non-utility

credit and as Our liquidity and balance to my of SJI our have believe sheet, the past years execute plan ability from our with a result while for supports you've very Along financing on our maintaining execute this our improving actions growth the improved ratings metrics. plan, is strong all today, colleagues positioned over to and that financial plan. very important I in And I'm well excited heard these ahead. year,

today my I the conclude, that team you our of to the to for they've I and in As thank and want for your for year. hard investment work company. participation put your past in interest My continuing all over thanks

Mike Renna

turn to today's takeaways. spend I'd some to Q&A, we like minutes a key few Before of summarizing

it. said it, I SJI future. moving upon onset, invested toward has the strategy world centered our the a is As at is in clean and energy

for long infrastructure modernization decarbonization South Jersey largest, Gas enjoy and our are opportunities. runway Gas and businesses allocation earnings customer both growth, and capital companies and Both investment generation. terms a will remain Elizabethtown strong in of above-average

contracted We to our fueling a And our growth for rate above Production, Management and platform. in through XX% XXXX next roughly utility grow five returns compounded non-utility XX% businesses. expect is gas the eclipsing margins we'll of contributions renewables rate hurdle steady years, our to base approximately derisked investing at rate low-risk and Energy set group Energy provide from In and with predictable through natural be a million over $XXX XXXX. renewable traditional with

share economic and associated investments. utility timing to X%, step-ups energy per with significant As we we XXXX look XXXX, clean X% to by in with to and expect earnings XXXX, grow driven rate cases

at XX% We growth cash clean utilities. flow well expect five in over driven next operations the increase years, significant as as fundamentals from energy investments by our

roughly balance of with return the our to in have exceptional our current us. cash before growth the with growth We expect rate dividend we as line we of shareholders X%, opportunities

emissions you consumption, reduce the XX the next of XXst to company and forward the stream creating and transition the We of a then investors. projections delivering these a and carbon Q&A. to and over lower will today, years, and energy to always, infrastructure as significant break intensity future. our value Finally, gas for investments our I your our for clean look SJI operational now and the our in century company. on your want interest five-minute We'll for take begin thank investment attendance long-term delivering

Operator

Ladies we Thank will Q&A. break hold. now you. before the Please and begin minute gentlemen, five to continue

Operator

[Operator ahead. session. Guggenheim today first question question-and-answer the Pourreza begin Please now comes will go from Partners. Instructions] with We Shar Our

Shar Pourreza

guys. doing? are Hey, How you

Mike Renna

you? Good, Shar. How are

Shar Pourreza

Not too here. bad? So a couple of quick questions

get opportunities, prepared potential regulated sort about million to the know New I we in How legislation legislation, and $XXX $XXX could maintain swing RNG we could the allocated of around obviously, of Or we about First, remarks, interplay you utilities base at non-utility non-utility the to i.e., we RNG. basing R&D between if see that talked non-utility? in Jersey that rates base still just RNG million spending do kind rate legislation target further the think downward? at add versus while

Mike Renna

Good question.

utility. lot is a broad part outside now it's some right the the you rate If of of they as going can businesses' what utility, you of I where think investments see So of into would the the final base have I the Yes, transfer by a think to So I non-regulated within got dedicated utility? RNG right? that determined are – right they as of be those it's lot in the would move legislation. Oregon, contemplating to that become a RNG RNG that of is again, then narrow a RNG. legislation then it's that going Shar. it the trucking by we've think, that money permits whether farm, geography, If then more a to perspective, dairy it's of from compress basing and cost-effective And all inject now, state, and is development determined to non-regulated rate there, be

waste, So farms gas that water have and dairy a Jersey. an based be don't facilities, We that in out lot all Jersey. in treatment for give rate New But landfill state. be would New of developed food opportunity would then us of to

Shar Pourreza

the Got you then Jersey we're And waiting as for LNG redundancy But opportunity with curious if that. territories service there's it. opportunities South Thank additional at ETG for well? Gas. still obviously,

Mike Renna

comment. Dave ask For I'll LNG, sure. Look, to

and its with with to maybe systems Jersey Shar, our continue which you which customers of and means be and Gas and and in as ensure LNG globally, certainly address could one to grow, is demand think to right? either any pipelines a supply, liquefaction we And I as quick about storage. utility capacity is could obviously, the continues be constraints. of a – reliability add is one scarce a to continuity resource, the a continues It's potential responsibilities as to large-scale to of jump respect really between capacity South Gas Elizabethtown that, alternative or Dave, means and differences of talk service.

Dave Robbins

now, protected so mentioned, Yes. we do systems right Elizabethtown that we see subscribed we've to think Look, an should well territory. LNG sufficient prolonged peaking What in facility cold. I Mike have, the we're have we as

that. we There's the it Elizabethtown, more Western of Right our is another on to system way preliminary reviews territory very system add moving begun have. on be opportunity to that the be nothing configured. challenging where primary really But is right pursue have infrastructure redundancy. could of now, that we'll We continue critical now. would focus In our the replacing existing the

would more probably at So and Eastern in densely to something connect the point possibility populated to. infrastructure likely most it's there's the some region be where

So Vineland discovery. had with to in again, one as hearings. good mentioned, very is in very reviewing us. preliminary had had We've The important regulators. that. dialogue And you we've We've the public

So certainly that's encouraged still moving forward, by. which we're

Shar Pourreza

for it. Got lastly just then me. And

here. level? you having of minimal was within than range, much spending the pretty top with that more would incremental state a the levers. at kind so talked to Just your just would half items, on what it's need like growth To you lag. number the about healthy end, hit sense of I obviously legislation a I you on trying of get rate, drive especially sort mean lot regulatory – a

do sort we between about presented interplay think point? the you given bottom So of the top that end the this at how and plan

Mike Renna

we allow would took the Shar, of basing if Certainly, the that we the be would the next included to where that get if in We board take one. earnings reiterate with would legislation the to federal for the revisit RNG respect that I our end, back become that one disproportionate But legislation, stream. what to way would level, higher certainly, just be renewable want investments. on ITC – has very range. with four Steve strategy of probably – you want getting RNG part Look, do presentation. end ITC the to I would to biomass a future on is a said of way. questions be happen, our that were we If rate traditional think off that one to would sensitive to point higher a in

a of If there's be incremental is over have we we relationship we us We've enjoyed could the if limited with think always expected. it get us But have outstanding such but some And that some should our conversely, we really it better-than-forecasted that the result that than to to upside end. better the we sort down were that to on have then regulatory to Better again, one wholesale would had opportunity an of upper for outcomes The expectations. shift We shaped a back those have say, regulators. think there range, planned of I the, to less at wholesale lead there. slightly front, RNG. upper to have portfolio downside. a outcomes, renewable And could certainly respect what investment. certainly will with same yes, ITC – in the results way So be look traditional the we've but one-for-one largely we way Downside, certainly, to below fall us I would not upside, attached RNG could some we planned just it would again, investments. I lot our I a strong think, as regulatory end to story. the it, of and really is

probably to with the I other outcomes think that's respect one. the adverse would The biggest be PennEast one.

Shar Pourreza

Congrats. guys. Terrific,

You year. got this past

So congrats.

Mike Renna

Thanks.

Operator

with Mizuho. question Our Moreen from next come will Gabe go Please ahead.

Gabe Moreen

good the morning, Hey, if follow last up Maybe on just could everyone. question. I

interplay IIP LNG at the well the SJG in I between, guess, as plant. terms as of the ask Just

the kind some the well also at that plant I size? variable, the LNG a guess, bit, not with depending timing you of with IIP talk of the the ask, of comes think past, I ask just any on about, confidence you having Can flexibility timing there's but on little SJG on degree LNG in in And maybe to the hinted plant? it. being the whether what back its given flexibility

Mike Renna

go on Yes. jump Gabe, this and ahead David I'll ask to one.

Dave Robbins

question, Gabe. for Thanks Okay. the

regarding need the inventory quite programs still that do little we've a will So We that IIP, we've about, ETG. of bit be is it have SJG asked previously to and larger as at talked a for the replaced. than

of we for when good upsizing And we it of given the the our talked this, attributes right? this program socialized so regulators, with like environment. positive about It's the possibly significant opportunity a

continue We methane. fugitive to reduce

our The need positive work. as feedback Jerseyians of the it back other strengthens to earns put a system. return. New then, thing a that And – a And right, lot reliability time of it when creator, got timely safety we a big to tracker, it's of job more a in course, and

So this – look, the program. of on to we're confident. We're speculate not going the size

know everything Typically, for. you get You asked you for. ask don't we what

I'm outcome. that the But think program. been we've in a size here good predict of we would I I dialogues. don't advanced not prudent. again, expect think the on So to be that,

maybe given with the that But of something regulators, probably to end we're it expect may agendas We by slip than on But more QX. what's in the likely, real our program. QX. confident

did mention You LNG. the

with As until end but local little toward had resolution, the there's on meetings, comments start slippage the program think that dialogue. the a with expect in a I've more that come to But for continue to later discovery, Again, not my have do filings, of just Shar, everyone. Construction shared LNG year. volume given had likely may not XXXX. favorable we I on of

Gabe Moreen

I be would or five-year earn-out kind little about correctly the $XXX loaded are terms maybe bit to just the need you us Thank REV sort also, looks in I investments, through the of in-service shift of like of, to understand are farm walk dairy that has the dozen, What back-end you. when Can opportunities a which in bit plan. the the assumptions And be of more REV then million. could cadence I guess, some potentially, earnings a of decarbonization And the thresholds little looks minus, if plus dates? to of It two just Maybe occur? potentially could specifically. those hit? those of payments

Mike Renna

Sure, Gabe.

increase with stake given what twice front full our have the in ownership, REV within hurdles, organic not REV period, expect and the them – We those be triggers has EBITDA would anything ownership they're of that hurdles XXX% But growth respect the obviously to achieve we five-year and are. to reaching disclosed expect we in it, to in XXXX. specific

the development, a back-end farm it far with little cadence bit As as loaded. is

largely XX I XX as window. Steve because, it's month think mentioned, that's a about construction to

So bring in we're year construction initiate them that expecting would to on farms several this XXXX. online

number the a few that's XXXX, construction. construction commence it all this where commence number year, So be after farms, they that XX-or-so commence next year I think will a a where will in begin we Of about should about way the remaining probably and a thinking be coming it. online year will there would

Gabe Moreen

at-the-market then kind equity back? that seem about think But equity are for Yes, equity? program that your ask minimal. around future me likely question needs to be issuing just how go would last of will appreciating most you and that maybe issuing way – the probably go pretty about Mike. Thanks Do is an you at

Mike Renna

one, you grab want this Steve? to do Steve,

Steve Cocchi

Steve. was in I Yes, taken the in equity with right. activities pointed as we about block March. is on that you're thinking I care large issuance of this mean deck the the remarks, and Gabe, of kind think – out in of

And out. more a I as think refine an our like sense. roll that about lot plans and makes at-the-market we something going talk forward, something we'll of

Gabe Moreen

Thank you.

Operator

next Siebert Our go with will Williams. come question from Ellinghaus ahead. Chris Please

Chris Ellinghaus

Hey, guys, how are you?

Mike Renna

are How Good. you?

Chris Ellinghaus

level? give Good. on some us Steve, XXXX on are your the ITC you color thoughts what can

Steve Cocchi

And Sure, the XXXX level our being then declining decarbonization pegged you ITC the of Chris. plan I course about, the more over XXXX, The think, spoke gradually – same as investments. and has look should at by at it. we Yes. around out as plan is the replaced way

Chris Ellinghaus

off CAGR earnings – Okay. assume your – $XX million of that for that And you're economic I calculating the level?

Steve Cocchi

That's right.

Chris Ellinghaus

math slide it's of you This $XXX metrics that of me some it I let to see and doing REV Slide for what there. just you that gave Can farms was buckets us is. is sort XX. on The million down – the what clear break the the the entirely – XX all Okay. slide me And not just are.

can? the So of the where as money big sort can kind broad just give expecting sort headed you your what What to out million buckets break $XXX you goes portfolio as different best purchases? for of relative those of buckets us the to add to you you're just that today? is REV to Can

Steve Cocchi

Yes, our includes included Sure. do in slide farm we development. million think forecast for I $XXX that have – approximately the

over to million course So additional number the be will take that's equity $XXX devoted that of both as far a farm development. the your business combination place entity, support the REV, of the as at of own as in the will goes remainder number capital on opportunities developing that The buyouts outside a plan to farms we're those umbrella. develop RNG opportunities has period SJI the Devco dairy its of that as growth well to under the REV. is

the trucks have acquiring offtake capital contribute needs REV's to developed injection those to be would farms then additional to we development the those that farms that for farms and would ultimate we contributing that as expectations So will to system, point. the the from of as well transport agreements, the capital RNG are

Chris Ellinghaus

Okay.

you're So outsource to the transportation. not going

going You're to have in-house transportation.

Steve Cocchi

start, that's their the core before subject this their REV negotiation. That's at how into – of their really and that's core point, RNG business competency. getting and is That to got But kind goal. their still

contracts have gas. the would will been able historically, expect, they to we that truck So to to achieve be the continue get as we able to

Chris Ellinghaus

Okay.

So $XXX average your farm out that there there's of another to sort of $X that anticipated CapEx million overall development you're piece bucket, million. But portfolio? is assuming

Steve Cocchi

Yes.

the develop to farms are that and plan that that average CapEx of XX would to incremental we with the are and would far be addition what in a the rights plan. to have other development get talked we in in development using are we is the end process There to outlined. we've of assuming intend refusal that the thus will the acquired that number plus originally, that you up about develop – we've first – right we the So of to our develop XXXX, process total opportunities at development acquisition $XXX million or

Chris Ellinghaus

Okay.

capitalization general? With the that thinking of are production how in terms CapEx, of the totality you the production in of business,

Steve Cocchi

and that we running the cash. business, first Well, we the to farms kind up tranche there, average from of EBITDA could going as look, – projections next a you once this the have in in and year, ground of put it's EBITDA generate lot see of

we is me it your ops if cash from to asked misinterpreted earlier, expectation that back So equity. composition the I financed markets. would forgive then that was it, from what And question produce finance asking, have plan through that's the the Chris. business and if question. to capital in of in But you're is that a we the minimal incremental going the coming activities debt And some combination

Chris Ellinghaus

the AMI any In on thing. Or CapEx XXXX what's of built AMI utilities, your time frame? last the got the One that? you through Okay. into thought process sort for have

Dave Robbins

Dave. Chris, is this

for half an AMI in latter us. have for of So the makes sense of plan. AMI a think lot we dollars the do some We program

really I out that don't have it meters. need have running, fashion We will and meters be swapping When replaced. with XXXX. begin assuming, in the significant including think the that doing we're be We're But still out prove smaller we got to we cycle as we the we'll smart until, a our pretty to program, and program. up begins which are plan. master on some It's aligned with environmental positive some we like attributes, attributes, great homework and

but of won't see ton kind this ground pilot in five-year fashion. some you So we'll probably of to plan, look think a dollars I program get the that in off starting

Chris Ellinghaus

you area? what something substantial upper Is element that as see the one more in range that end is of earnings or growth

Dave Robbins

It's certainly an opportunity.

we end. will our I making priority the and along it opportunities, sure investment Certainly, more back need make toward to the AMI get for attention And safety part is information? have move Our as RNG. to priorities, we be decarbonization infrastructure We'll with think top particularly more and reliability it pay Could of we upsized close that. few be could. right?

Chris Ellinghaus

the it. details, Appreciate Okay, guys. thanks for

Dave Robbins

Thanks Chris.

Operator

will Our from question America. go next Bank ahead. Clark, of Kody Please come

Kody Clark

all my thanks the disclosures. question and taking for for Thanks

Dave Robbins

morning. Thanks Kody, good

Kody Clark

morning. Good

profile a my and You already, cell questions much wondering in been some better in answered million provide have of the but if investment. that How past So solar? you on the cell the breakdown is bit have a return versus solar. fuel $XXX cells little toward fuel color lot of can solar going than stated fuel

thinking wondering how this. just should we be So about

Mike Renna

offer Hi, we're on the Kody. Certainly, Mike. returns correct. to opportunities Great what revenue targeting you by closed cells are I of It's fixed where do you're than Fuel state projects and and does And had think similar question. XXXX, credits. we that protected solar. of the one XX% in better upwards stack

available. we XX% not importantly, So just happen make-whole with should side the they're guaranteed you units again revenue guaranteed derisked think the not provisions manufacturer of from I side. right? the protects We've of the that got that something should availability – and fuel cells it, a really with have operator And they're availability and as

year – So be structured why preference that's like very and it's that's investment. derisked cell do would our it's so market that And – lot we those. one on big projected there of nature feel renewables our to of fuel deals, think we similarly is significantly given satisfied but I there would I'm utility-like for believe in a them, a remains investment. chunk probably a not expecting traditional a

goals also delivering our about is a For decarbonization within utility on us, operations. our lot solar

opportunities, on operations. electricity Will putting remediated solar, So so green we're that like, in MGP solar we can with produce addition to sites and the and at repowering lot and other away decarbonize We're a of our we looking our from again, and continue facilities our fuel walk identify not in continue further to preference Jersey be really to cell opportunities develop a going certainly Sure. But good opportunities. to the New look opportunity. would attractive for region. in to solar our

Kody Clark

Okay. for super helpful. time much the so it? and That's congrats. Got Thanks

Dave Robbins

Thanks.

Operator

Please question will Richard Sunderland, go JPMorgan. ahead. come next from Our

Richard Sunderland

Thanks and morning. the my taking questions here Good for update. appreciate

Mike Renna

Rich. Hi,

Richard Sunderland

PennEast. with off starting Maybe

EPS are what baking the Phase from should Just PennEast Two if Phase there curious One? offset not any advance? you're And contribution in

Mike Renna

Yes.

again, So supportive and Court. to pending PennEast. We're a are of a we to the whole project – strong Supreme need sensitive the this, – it's front a the in and pending of fact SJI provides a that for obviously, benefits want there's FERC. support for decision and it and we our strongly trying balance of But still of the to the our also There's be project the utilities case approval the as region. approach because our in final front customers

because contracted around quarter timing date Two that, fourth a at in-service looking in us still less Phase XX% X%. earnings. once great road would be long just a a would the online, uncertainty of we're Phase come XX% not our when Phase would – scale pushing projected two There's is Jersey. we're And was What ahead say Phase be So for One. XXXX of earnings I New to than of it's to of One. to that the All in of It's our be earnings is contribution really range One, that's now capacity to that Phase expect smaller after Two. of X% It factors: would then not minimal. said, that And X% One. the being there the that well on we there's Bcf

So contributor. that it's project. But a due our small is the growth more a smaller specifically other in relatively significant to is PennEast businesses

Richard Sunderland

to I PennEast. guided $XX think the net you full the in million of income So past, that from

way One that the then given of think of bit working is that at considerations? Phase So somewhat, about XX% smaller to figure, kind it's under down a starting little

Mike Renna

Yes.

should million would back forecast AFUDC I so be again, I scaled we think, lot at Phase It think, And to and yes, not a least how lot spending a – plan, of project. that's again, X% it not earnings. X% a – really I overall take or being some It about conservative we're assumption as would it lot. these think it, the again, taking effect very, you five far our not considerably. At and Two. of looking you're original would our years that as you've right, in very related was $XX the mean seen our of a making, look. that replacing

Richard Sunderland

what, up? kind terms was start any recall, Got Or to sense. of just back that LNG the project, I it. if earlier give That before to pretty runway commentary, approvals? about the the regulatory slippage makes you in that XXXX then in think project of how And circling do construction additional a given good does you geared the late runway getting

Dave Robbins

it's Rich, Hey Dave. question. Thanks for your

base expenditures submitted for actually the we is was And the It's it's will begin complex we project. costs place, that, costs upgrade once construction and pretty file a begin, concluded. case actual tank. will those the But a quite get those approval would to plans what in all those The the are on our So rate when large after runway. to is long next tank infrastructure serve then and we upgrades. in a

and like permitting three-year it's between I at, a looking project. you're mean, So construction,

Richard Sunderland

Okay.

clear call to just on months, of build-out associated as the for to be done work you another in still process the, terms So tank the just the were the that to six have get front, as upfront approval associated room slip infrastructure the itself? in plan well it,

Dave Robbins

push continued out. there Naturally, to Yes. Well, to it would. to the would delays sometime approval, we we We'll expect look, it date and were then we'd will we – have get And if that subsequent that are year. we could reexamine when completion case. rate start do that would the to occur, certainly, then approvals, get file next if

There's So I in a long just good dialogue. it's progress. look, pleased little lead But been a time. because padding we're some that have such we there there's think

the the I redundancy. need important understands critically create to think Board this

to earlier? delay So years we nothing months subsequent that Of would. all next in placed still I service there it in course, it's A little be delays, a Would to lot optimistic. when could file I consider happen have a we the monumental. further needs it's for few forward. then loved I'm could that and by shifting, are if when there still approved moving But case. it three so would And rate be some

Richard Sunderland

for one I the guess layer, ETG baking around And enough. is which of And you're my into that guess I kind done the the – turning upticks you've component, way course equity cases step-up modest there. be Any – what understanding the the plan the to Fair one color that Is the extent equity over that helpful plan? then in the utility is is is outlook there. would rate step more of period? step on or of the

Dave Robbins

is this Dave. again, Well,

still with took We case. it's below right. ETG Certainly, step absolutely SJG. You're a the last forward

cap. there there we're But to not certainly, on another in is. sure some step-up for another think is ready So to a comment there's have opportunity we Absolutely equity that I'm possibility in that move be. might what to step? that

Richard Sunderland

And it. Got last one one then me. just for

discussions higher-level been in talking stimulus You've about at Jersey. times New

Just vehicle if curious the IIP here. the is watch to

to job-creating you of leverage business? your aspect see opportunities other If the

Dave Robbins

BPU – miles late, have maybe haven't accelerated I Within can the Mike jobs. be programs, through utilities front Well, IIP. provide list on Jersey's replaced. quite placed economy, we package We few we of on accelerated an I a projects. the help and still stimulate we haven't we're going projects as heard all inventory be were those to was the basis, supplied asked by New a the stimulus mentioned, our they to comment. create were if to through a could but they office that of – lot our and

again, socializing talked on reliability everything job that have BPU request we went kind So and the not hey, program," of certainly "stimulus stimulus that – before. the done: it improvements, safety but may forward I the a after with this staff and that, things addresses would creation, be

the maybe been by discussion overall it back So stimulus requested to there's kick space. I'll to if an on Mike see any package more

Mike Renna

been a there targeted No, about hasn't package. stimulus Dave. of conversation direct any recently type Thanks,

reopen for in restrictions. will step itself, announced Jersey recovery. first I I'm is there for of any jobs more I New the I the rebuild think recovery. you – was allow councils, importantly, I that. And type What a with increased the is initiatives the in sure of really to economic accelerate on has And criticality had full just an have but specific infrastructure conversation know that and and that of investments easing recovery, appreciation the a focus part both of will that, around of think infrastructure you say – as and as ability that a economic of

any very in confident recovery types that important remain I So economic be these infrastructure of a investments investments, utility infrastructure, will of investments of plan. kind in very part

Richard Sunderland

the Great, today. thanks time for

Dave Robbins

you, thank Yes, Rich.

Operator

Our comes go ahead. from Please Akyol next Stifel. question with Selman

Selman Akyol

clarification, morning. Thank you. but a answered, have if Most been Good little and asked could. just I

time being to legislation the this might introduced First I in what but Any New – a that you Jersey, know line be? talked idea about on of goes all, back the in RNG. March for

Mike Renna

I've No. efficiencies. prognosticate try to of efficiencies to not or learned about kind legislative

it's I of sponsor support. of It's a It that Senate. – is is has key what in in look, a of people introduced attention a legislation. got the lot got working think, by I'm It's the the on encouraged there similar assembly. type being bill

way. doubt it let be that that this be law I passed me think something before It it then election I that lot so November – going is And would be an year, start you're on there's a would it I into would November. likely highly I put to elections. the of think things to be point time, advance. see after focus to something in

Selman Akyol

passed, legislation side. Understood. clarification and non-utility were maybe that go would the And flip Did you if utility I revisit the CapEx some as then into correct back, again. the also budget potentially But well? just a from get the

Mike Renna

rate We investments. to would clarify, we'd where we basing – identify the Well, revisit And identify investments areas base or in limited wastewater landfills. go legislation No, outside of facilities basing opportunities look where behind makes the look projects. Jersey, to defer. it's permits treatment or projects? kind if otherwise, we the of it would as New well in-state farms largely which make it's of of would And we would they planned allowed just in because Yes, to back, sense are within if of whether would to rate we three food development non-utility. If would those rate would as our just all that's accelerate logistically we be would the remain waste, exactly then To development. right. Jersey, sense, New to

Selman Akyol

All you. helpful. Thank right, very

Operator

Relations, turn back Fidell, this will remarks. closing session. like the I gentlemen, Investor to over our and to for conference Ladies would question-and-answer conclude Dan

Dan Fidell

your Well, thank all you today for attendance your and great questions.

have feel please reach free me questions, If to out directly. to additional you

It's always, conference. You've investment the on your information. And you thank as all contact day. in for got as rest interest continuing company. investor a concludes available and my website our of our your This well. we Have great

Operator

presentation. today’s The conference has you Thank for attending now concluded.

disconnect. You may now

South Jersey Industries (SJIIU) 8 May 212021 Q1 Earnings call transcript