Chesapeake Utilities (CPK) 7 Aug 222022 Q2 Earnings call transcript

Greetings, and welcome to the Chesapeake Utilities Corporation 2022 Second Quarter Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, August 4, 2022. I would now like to turn the conference over to Alex Whitelam, Head of Investor Relations. Please go ahead.

Thank you, Kevin. everyone. afternoon, Good late everyone it's day, we and We us. in appreciate joining just know the We're Chesapeake to first excited present half quarter the of and second XXXX. Utilities' results for

the ever-changing both periods, the stakeholders, is in release our to As continued to even marketplace. midst which solid growth deliver you in issued in long-term a saw sustainable yesterday, performance financial company our press this ability testament of reported our for

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

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

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

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

reconciliation and appropriate company is in this gross its GAAP margin the with earnings the margin in in appendix disclosures performance adjusted G. of our release. provided evaluates non-GAAP the has accordance A Additionally, SEC's based in gross on adjusted presentation margin and non-GAAP provided gross the to Regulation

the drivers company's some call to of financial our the Jeff results turn provide I'll Jeff? opening remarks Now to performance. on the key and over

our you Good afternoon, Alex. today. you, thank for Thank joining and call

them moment, the organization, to X, Slide a happy of Utilities and Board to Stephanie the have services on customers, able to X, skills, to board. were expertise, outstanding the Jim providing and Chesapeake turning I'd quarter. colleagues thank to Stephanie leadership Slide and Through across our Now like an hard company. to Petrone and this On work solid to in bring my we're second will pleased results in speak energy] we dedication but to Sheree and Directors. their welcome Sheree [essential our Gary to all of to deliver continued we're

in our the overcame through challenges, in businesses. pressured as we team June. per Our to earnings supply constraints challenges to year grow the chain and Despite date and these quarter, again, continued share inflation both quarter

last several Florida and compared in largely quarter, For same the including customer period expansions, million which service transmission Diversified natural grew service territories. the gas $X distribution and second year, driven was both our strong growth adjusted by to gross by margins recent acquisitions, Energy, Delmarva

gain EPS transformation a to do excellent million also we We as resulted real estate and business higher with step for efforts. expenses another took in And rationalization, an quarter. our job continue contributed finally, $X.X $X.XX the in our which our team continued mitigating

the additional increases adjustments gasoline to to The impact, interest materials costs. our biggest cost corner virtually action impacts employee While inflationary will managing course, in result in XXXX of inflation and with the margins We're potential business, we're every into environment control we've good costs accelerating significant a in and to all and of of experiencing the is future probable additional from were to done Fed's rates. quarters likely continued third seeing fourth job XXXX. possible,

it detail the call, have that later are XXXX. dates we're that In and projects suffice impacting in several other but interest addition in to timing regulatory to increases, cost of supply of shifted the experiencing discuss the expense our the capital issues this projects. some of and chain expansion into and say in-service I'll delays also greater

issue. timing a it's Fortunately,

we're so they delayed on are these have this remain will not and that track issue long-term XXXX simply We would but timing number And capital affecting be completed X-year a to projects projects, certainly guidance in expenditure expect shifts we're the a not year. seeing EPS reemphasize these expectations and for point, adjusting and of just our our We on XXXX. guidance. current with our both that beyond. capital also I reinforce expenditure for canceled timing

positively territories. projects connections, see Delmarva pipeline our financial which great but operations, national of our growth experiencing another impact and customer this natural organic given teams. and the for our gas customer I'll our reaching levels territory, continue that natural next to that to close we XXX,XXX work in well distribution investment speaks see said, at solid results recently our growth levels continue to we're operations growth, future. that We was on our Florida with customer announcements opportunities growth further by the will great number the the again above of a the All to across and in exciting it high significant earnings average. In number and the service we're quarter slide, gas businesses surpassed customer and discuss capital

lies near-term let touch ahead on both On platforms. our substantial, businesses our we're Slide investment pursuing current the foundational we're X see me ahead. the challenges in and we and given sustainable energy are growth opportunities While future X, inflationary for excited projects environment, what

in is Delmarva our mentioned, in we was X.X%, both growth growth organic Florida distribution the natural In year-over-year strong saw and businesses, and above gas national the Florida X.X% I quarter, to second the As which customer growth, well Delmarva service continue average. see territories.

the housing, solid demand see to national inflationary and continue our foreseeable future. growth in rate rising environment territories service population and While pressures a for significant be for interest the housing for a homebuilders to appears demand slowing

have confirmed they example, months. that XX our units presold an builders some for As of out have

for and need greater the demand City distribution propane natural example, the We including, North our for opportunities throughout gas capacity only The Delmarva. continue expand not Winter to gas Connector continues continuing compressor Beachside on to on growth present transmission businesses, the Ocean see and also well. service for high builder with Haven for our Expansion systems that customer Eastern it projects Shore territories. and the natural investment in We're but Florida, our as upgrade systems, expansions projects further drives our and Southern

All are we've projects those past. of the in that discussed

will Lakes deliver a St. submitted an project capacity customer area, also expansion for growth, projects specifically the These bring needs significant Florida, petition once We in Twin Cloud, additional that poised to are in support the growth margin completed. to development.

through drive the for to continues year. also incremental first half Diversified has business The million margin propane driven $X.X results the company. gross acquisition strong of the of adjusted an Our

door the region. opportunities is in service its for other Given locations Diversified the the across Carolinas, opening

opportunities June propane we City in propane those fruition North to acquired Siler Davenport of One Energy's came Carolina. in the when assets of division

and continue challenge, respect trained organization, North to And value landfill nonregulated see as to of projects for the customer million transport of we've working Beth footprint our our costs especially I'll a pursuing in transport Despite customers. continues investments renewable driver adding Services meet add for over this the in transportation Marlin quarter. is as RNG discuss business, XXX and some in we to to for allowing With communities opportunities overcome our begin we in to to to more Like We're Marlin completion. those as Carolina and dual to efforts $X.X expansion Propane continues come local of Beth? with a be we're an East and demand, to to margin to gross and Mid-Atlantic our results to important doors our renewable adjusted natural generating shortages, by higher the excited highly mobile highly in finally, to efforts, acquisition, with portfolio companies, well open us labor additional our along gas operators. also finalization been continues Coast waste. RNG overall added build approximately many objectives, meet Marlin portfolio from of additional turn our gas delivering our complementary, Gas the depth. contributor natural excited in the further With to that that, Southeast. closer it agricultural opportunities and number projects. to these sustainability

Jeff, succeeds, ensure all do team challenges everyone. you, face the of Thank our to to for thank company the continue to like good in afternoon, I'd and especially Jeff the also they proud quarter and the continue With to team. we said, a together details XXXX. mentioned months first the what that previously. as X of accomplish into the of of let I'm me dive

earnings year XX. As and share you'll X, were through Slide June per $X.XX see on quarter diluted to the in date $X.XX

our basis our performance. a is delivering year-to-date of reliable result safe, continuing plan direct executing on on service, to XX.X% financial solid while and provide team Our growth growth a

business. to; which programs December customer our Florida, infrastructure businesses; continued margin in key Eastern contributions business we Some strong included distribution units; XXXX, and growth Jeff summary CNG margin for our at year. million and in services in Gas first per within legacy gallon million by margins in just expansions which the gas spoke demand from X, the increasing Energy, acquired and margins $XX.X $X our Slide half growth drivers businesses; for of the and regulated from Aspire Shore Elkton, financial of various year approximately for increased higher thus the additional Energy pipeline gross in Ohio; quarter natural increased our our organic far On finally, Diversified our business the Marlin shows propane for Services the adjusted

and result an earnings quarter of job earlier. of rationalize we $X.XX impact on the higher rates the gain onetime expenses, million sale net estate. outstanding did quarter While for half generated that second will was a rising year. continue our share throughout $X.X negatively impacted mentioned a managing This This we That $XX.X real the as said, and income were a in as EPS, our included $X.XX. additional second of interest have charges more significant earnings team million, building per the to as

onetime X.X% the the For X represents by earnings On a the $X.XX per-share up the year. of first increased XX.X% on increase. key the period, last the year. the same which was X, same time, first as by for increased quarter income over to highlight to million the period contributors over compared gain, XXXX measured we year-to-date months a EPS Absent $X.X EPS Slide basis. prior through net growth

Let additional me some provide details.

an I the gain incremental As the Meter acquisitions Station quarter. in sale $X.XX rationalization and Escambia generated that the generated mentioned, and earnings from Contributions building of quarter. Energy $X.XX Diversified an for estate in just subsequent the real

Our with largely core gas Operating Diversified higher increased growth, from expansion regulated Energy from natural that operating tied share. our propane distribution additional income from along infrastructure program. $X.XX $X.XX. per to and earnings businesses the acquisitions Aspire additional transmission This operations, associated includes delivered performance higher income with contributions expenses projects, by were organic margin our

first largely upon in colder the on losses the of and job fourth and more were remind margin our during investments have quarter, remind may months. Higher whether team translate the ourselves of were generate evenly the year. expenses mitigating level an second with associated we business to and so quarter, we we want flat. significantly over excellent to core headwind. our third normalized property dependent the frequently capital As a operating those some operating operating the weather get did during tax into $X.XX while in this has costs quarters, Again, that expenses an tied more the [colder] depreciation, growth business new This amortization, propane call, and business costs occur in to

through as $X.XX all generated interest But similar we businesses. XX, similar Finally, growth our expenses our a and and On bridge, walk portray were core see, and follow Slide we solid from a acquisitions can I so the you details. higher. won't other

by for to and opening spoke enable natural operations. gas from Let in adjusted Slide XX.X% our periods, Operating his efficiencies X.X% comments, has see Energy light year-over-year efforts you'll capture our Station and regulated quarter margin was Jeff our infrastructure X Regulated operating our business businesses the segment. our been both On Utilities' operational for was of from expansions to gross drive up and to incremental And Chesapeake driven organic contributions respectively, from in continue within segments scale our and our contributions to distribution the various in pipeline, primarily acquisition. and as system, improvements slides. extremely next the me several transmission project growth now touch transformation X.X% beneficial higher XX, This X.X%, in Meter on delays. programs, up income on pipeline Escambia

contributions margins second Unregulated quarter, our Energy. gross margin compared for from to adjusted segment Gas and the of Aspire Slide by year. the period year's to XX.X% driven business, to XX, increased year the Marlin impressive an for distribution XX.X% and Energy compared Turning same months X This last increased margin on was Services, our primarily Diversified and growth last first propane

other the labor, segment of from in the at cost a million impacted operating mention $X updates rising costs few quarter average the year. increased with On Slide notes In more first in income the higher more I'll through of transportation significantly, the than XX-year a March, million on senior life. by X.XX% just $XX fuel, $X and a Unregulated issued we balance coupon XX, and sheet. half million While rate

include short-term potential current year date, the $X over our to including $X note Something interest basis. interest on does capital at other will that Chesapeake annual Utilities' not rate, we on pleased million short-term the debt Also, our annually. year based expense while is Fed an were borrowing, future million expense over hike, actions with new actions. placement to increase most secure recent by increase this long-term to approximately attractive This annual Fed's will

within We through from financing total approximately hedging rate mentioned. fixed year-end now the million stockholders' and of At debt just $XX capitalization to X.XX%, these options, average to of range, to alternative short-term financing million, totaled This continue our strategies, to debt I $XXX billion. attributable decreased regulatory evaluate debt with target at the impacts $XXX which $XXX second is mitigate and XX.X% included million mechanisms. potential XX% million equity, end long-term at $X.X the means an long-term capital quarter, and

and Our strong positioned will earnings our to and value. drive enhance which our shareholder capital balance sheet well remains growth support investments,

through CNG, transportation acquisitions, RNG projects, LNG we XX, growth will initiatives regulatory Moving and expansion, to that and our strategic the pipeline XXXX. highlight drive Slide

we always, we of pursuing. that not evaluating indicative does organic As are include table you remind is that and and the it this not growth, projects all

line. added just we projects and for already continue on with additional the These We many now. table rates rate XXXX case are of adjusted market fruition. But million gross look we've long-term excited get call, last as opportunities. XXXX the finish initiatives expect longer the to and growth continue our share in announced this $XX add have runway for bullish add value. provide Florida. provide filing our projects take moment, stated, Florida to more but in they it margin with We'll of underway that available. than Jim XXXX. million also our will $XX state driving to bringing forward types be projects to these than some higher-margin are to a the of the them of the on in we are a in of the table interim] in we as become pipeline margin renewable in in and from growth will additional the in case, projects placeholders energy to this the We're we approximately levels. major over to million expected details projects maturing of details Since rate our across Cumulatively, included more $X [Absent

an projects close of Slide our million, approximately million to contribute to $XX margin. XX, gross are expected key adjusted With we $XXX these in projects. investment highlight expansion pipeline Moving to

Moriarty Now updates. to call with that, the regulatory off and to discuss Jim? ESG I'll pass our Jim

final September million subject increase. in readings has Well, Florida year. The thank we interim of business XXXX. Florida plan for for effect for refund pending for some storm cost storm recently of and recovery protection you, with the are are storm November, XX. $XX.X rate Utilities' XX case permanent system allow interim on meter basis, event on to details our of proceeding. the approximately ongoing rates base plan case plan the of and is approximate protect mechanisms service. including our rate for a Hearings $X.X are an filed of recovery Public prevent all rates to outcome for this in all. the approved protection to effective a of this annualized approval protection an on recently good Florida into storm proceeding cost The protection the electric progress PSC million January now, rates and you storm with to The in in in On and initiatives, afternoon loss new company further investments regulatory starting Beth, filed the of the XX, and go plan Slides recovery electric and scheduled These hearings May PSC. seeking list

invest have the Florida Program we Additionally, $XXX Utilities invested to nearly end miles by first Elkton, progress quarter, Gas continues XXXX of we went make the and Public the safety systems program distribution in XXXX. the and with Through to significant approximately Infrastructure end began in pipeline. XXX into In million for of mains, that Maryland, many to forward. integrity upgrade The Aldyl-A Reliability the towards of the reliability increasing going continue our systems' service upgrading Floridians. of

expect We and XXXX XXXX, project $XXX,XXX adjusted generate in will in the respectively. $XXX,XXX and gross margin

Finally, transmission PHMSA-required projects, and to our Natural Shore costs highway railroad upgrades. mandated unit interstate recover with with Eastern associated safety capital along has relocation Gas authority

$X in in in that will expect million XXXX We this million adjusted gross $X.X program generate margin and XXXX. additional

to strides Slide we our We which missions meaningful mission Heartfelt, our Turning of strong HOPE XX, affirmations, stands experiences. spirituality. enhance and in new already already awareness HOPE, provide culture a making I'd to established called describe their employee driving employees' are ERG resource Chesapeake. the personal support the made and for other Open, a communities ERGs to significant and Their prayer, company and employees' serve. of within is knowledge positive and making Encouraged. to group like few we our just This to Prayer, a have recently company at was advancements established impact

I'd in resource inside grateful awards recent and we outside We groups culture, are and organization. X important carry received. help like our to have who both employee for of colleagues highlight our very also all participate these our

governance XXXX team Stacie led the their and Finance corporate great continuing work and our best awarded Roberts, World magazine. the all. our for governance First, and to will which published be ethical the by U.S. practices recognizes those World corporate team, to of business in was by company. our award Media, News unwavering in commitment This across Congratulations

serve. Energy unrelenting job Shore by as the safety teams. recognized our our and Natural Gas and This highlights by American were Additionally, A those recognition performers. Gas safety of in businesses our Aspire employees the communities on Association the we Eastern great focus recently outstanding of both those top

today. pleased Health, Petron to currently earlier, Stephanie experienced, As Title Maryland-based growth. closing was strategic it specialty Health, Shore. of and Vice planning road across with the Jeff Jeff? of Executive Board to of very organization's our work Sheree, hospital Trigen Head thoughtful, to Prior of Sheree We insights you with call our leadership Commercial Sheree are positions joining we Both system leaders a turn recently ahead. leads is support. health back divisions. offices Title welcome as look sustainable navigate as continuing networks Gary Eastern Stephanie and has Board held and mentioned a will I accomplished warm now financial Jeff driving retail Excellence, on perspectives functions, President forecasting, those and Finance various to finance With we bring at role, Energy electricity we to and of and and and also on served forward the some both management our welcome on Stephanie at most roles decision as of the across Westinghouse. her Sheree great Vice and Stephanie very company headquartered the to Dynegy's opportunities Directors. that, the and all President are Dynegy, extend including valuable Stephanie financial hospitals served In and analysis, held who President comments. for country. and to Sheree Vice Prior to business. to Retail be

Thanks, Jim.

beginning adjustment we've to our a regulatory chain Slide comments, and in XX, and the companies look short-term permitting, raw challenges approval many expectations regulatory that adjusted at work, million mentioned now were as and XXXX logistics we experiencing complete expenditures the materials, timing, supply the as unforeseen I most ongoing capital We my the shift Turning of also highlights a temporary reiterate timing, constraints to shift as to of the actual in To which of are from to of to $XXX may delays, original year. projecting in opening reflect [indiscernible] with forward result the the delayed capital while expenditures to the projects million. our million, accelerate of again, these million it bringing to mix a in range completion some this that reasons. aforementioned projects. negative does on projects We're $XXX not Rather, for slightly others XXXX. outlook $XXX are guidance $XXX securing

in public period. example, XXXX. delayed expected expanded an was the to begin Expansion As has and or third an quarter construction second of FERC project been comment our approval to Southern The accommodate review

responsibility To X.X% expectations compounded despite to capital during period. later finished maintain We of We've that pipeline year, just within conclude seen XXXX, expected been expenditure today year in we we where X.X% current The discuss targeting of likely And the the for annual mix in them in our additional a the company. the growth will provides service and the period. the in the current million Eastern and to capital in earnings many lowered growth. distribution $X.XX will mix environment guidance. have project This reaffirm transmission continue capacity we've We our demand see XXXX. range per strong We we that We're regulated continue conclude, on investments on of transition for gas, over projects $X.XX. And both XXXX, be to pursue, now we and project proceedings matter In to opportunities track our our it comfortable no of serve shortage more you'll why year, some top positioned of recognize we remain for to us, growing to Delmarva Shore on in a increasing enough a long-term to do to our deliver our with the drive energy prioritizing part our of projects with sustainability of important projects systems, to our deliver of opportunities financial growth the board for in rate higher we've to frankly feel and expect opportunities. the continuing gas time, objectives our sustainable becomes front diluted $X long-term investments record expenditures share for future. that's represents natural these billion to our $XXX earnings quartile add we construction focused regulatory activities market expectations and what expect engaged recent We'll some X-year so the a and renewable in cleaner the few the support these capital net a and performance. plan. I platforms meeting see with the our to than to this communities' discussed of come service with result late well lower somewhat other for of deployment while is originally unregulated of of expenditures pleased strategic our capital to expected. been proceed and we addition. opportunities fully and same meeting the compressor to we're for to this at the the The demand critical same to a

why Alex, on the challenges certainly for don't up appreciate questions. Utilities, we there are see we continue open to it your Chesapeake With a for horizon, that, future and bright While support. we

open Jeff. questions. the Thanks, for line please Kevin,

with Group. Tate First [Operator Sullivan Maxim from is question Instructions]

background your the Can service as to fees? the your business. remarks higher related margins propane business, distribution that it -- that -- the And mentioned for some First, inventory you in on in of you are is go partly well? what lower-priced in the is

several as it's of us of, supply acquisition. -- It associated expansion to across a mentioned, portfolio. you -- a the fees, have also a it's diversified ability with becomes our things. Diversified combination that of certainly, It's also our an customers some joined have really newer It's of the part

does, some those into given then that for programs, of that some of existing what that us market to fact based our And base at And portfolio. additional translate market continue just so, the just the times, diversified margins, may supply programs. we to we on lastly, customer the have

so, join on And they margins as get programs. new some board, those we incremental as more there's customers

different several things, thing. one it's just So not

new the What new are programs, are What just those, please? agreements distribution customers? for

It's programs to some of customers. our make available the that we

may new that available, up sign fees as for that margins so there's and have programs those we you So we those. some margin they I on as up, and of And earn have the those customers in additional get then roll programs sign margin mentioned, of of addition as as that incremental result a from out portfolio. well, we services as again, we acquisitions, some and from supply to

for customers you of those Tate, lock of hedging are allow services. They the to as what and opportunities some types in just the way describe -- those would programs. pricing, there are for along us

propane or pointed customer slower prices impressive. above-average of in gas organic gas, natural you growth versus are natural gas? retail impacted growth, gas rates has to relative and which systems big your from conversions remains community where your seeing And natural Great. But natural out not then you gone that maybe because picture, gas have

to impact from find into are what out We have a process. point and go relative -- homes. the those customers those we mean, is this are changing and much association the we've appliances that actually that conversions semi-intrusive have seen issue. at responsibilities just ensuring come to a modifications an don't we to think agreements I in of to make There getting challenging conversions relative more homeowners it's the I -- It's not to making appliances. the understanding and

seasonality be of certain times cases in out in doing communities year. kind change to some We of that cases, or them considered. in adjust interested them many or there's are have convert not being you and where work in here, all neighborhoods their to issue some appliances of There's so that a the

things of of of that kind and those scheduling those So impact it's the timing all conversions.

the real initiatives item your include in just business CNG, project-based your RNG, LNG you business, table? mistaken. a please, is gas then combined line Is maybe Or is And -- another I'm not or transportation, for your that in in major please? that that one of would auto projects LPG me,

not together. we a it Thanks, of be varies look But much, different, in so not a so customer be is commercial Tate. it It aggregate a customer, single It date, or a set we the service there. table offering is enterprise; to at. customers. that is because projects a can included very it can a typically to don't we've again, the it fleet historically something size those take major can fleet, can extending be one And because and so

[Operator question Sidoti. from is Instructions] next Russo with The Brian

Just the our that on and could the that year, reduction related, acknowledging you nonregulated? regulated CapEx understanding timing break between down is for

most significant the pipeline. relate seeing that shifts you're The Brian, is to,

So the decline, come to you future providing -- on our beginning the currently some anticipated. Expansion. are working with with the do pipeline of be previously periods. where back that quarter you has see likely to we can are some the than decline, projects. a There's And impact those been of mentioned in first to year, to projects couple on as projects a that we're of larger the a the we prepare later have not guidance, there's and forecast likely decline that some that at things also that of just, other but go are what some things shift transmission and we're in would Jeff were if slight largest that side, Southern And announced

you might side, cases, offsetting will is of what the Jeff there, see the will And there with happen on that some line, a a side. at projects mentioned, a that see where we distribution little if kind on look are unregulated side come likely that the in increase we'll of the had you is transmission distribution kind can the year. as of that, as beginning or that result in have certain some other expectations projected also that at spiraling impact, forecasted an investments You the with though, the initially what because be actually on then bit line not on of

we what trying the Brian, do, we're guidance. at take things are our that what queue. lower end again, to is the make where some just fortunate look now to of that The is and happen, what is at thing might So truly at we're the are market, old shifts. the end in given in in and upper just where right factor a And projects sure the trying seeing

Got it. Okay.

So the the CapEx in adjusted Is in on chart temporary. gross XX? are reflected that margin adjustments Slide

are. They

those We have factored in, you will several projects. so see

to you forthcoming. see you'll a Lakes; in quarter Florida Twin some proceeding, see others in be et like there's same of shifts. quarter second things bit the slight Expansion, will is hopefully couple If addition some of of time, information from regarding addition rate shifts. a That with the where the will coming queue, again, rates, interim the next the little the look although more And Southern At see you'll the there first cetera. quarter the you

have the see a get in pullback constructed, the There's queue will announced. table, some this major year, It some there's So the not big them while no of new takes them project are reflect you'll project those so as in because delays. that for right? real in to a to project they projects be coming those impact table adjustment also

You'll see as add us in them introduce. then XXXX, we and XXXX

So but again, reflected major just a starting table. also with that in being shift the project CapEx, the project, in timing,

connections? sensitivity of sort Trying new to what that and way and to break And about homebuilding, Delmarva the -- X-plus a commentary year-over-year versus Okay. get characteristic et any Got differentiating customer obviously, territories. customer is I the earlier yes, the appreciate is percent growth service down there [indiscernible] cetera growth, I to guess. is is homebuilders, of it. to both Florida what -- -- conversions In Delmarva

for a than comes Sure. try it's that Brian, construction. quarter, significantly XX% about from third new but can I greater home the certainly say not large from would think coming to we part conversions.

Jeff out. there is a down mentioned, that path, new are developments organic still building As and but and we're that lot of developments growth is and that occurring,

propane of a So recognizing What bit we'll you so our that within the try significant side, to on conversions little it there is us growth, propane. declining denote and you'll amount, see will is a will an on in offset we will provide decline actually more if a be going disclosures that see are and inorganic forward.

assured quarter, larger not amount because a growth. in substantial coming the a that so, from of new is there's portion And rest

then on. And Okay. Great.

those the homes obviously, all say, to Florida Those going additions. without was of are goes I new it and numbers, conversions. reflect any saying, don't

with the it. rates book clear be you'll base you start I will from with rate statement Got perspective. accounting a to the I understand know from the earnings collecting be just your years better was case, And on that interim income a just to while want just few from of the an Florida -- storm and million to just $X.X ago, September, unique clear, I there in accounting want rate perspective, costs final some the that pending? is

reserve is Sure. rates rates Brian. And what we've will we certainly were great position we into exceeding time. took high interim at those be of least to were, that was when the being the that each we effect. and done Historically, That could interim we ascertain probability evaluating, put any we permanent not the there that's if do that assessments, question, fully or rates going something a a were

As interim some part that see and into find then we Jim have third we results. have we our we again, and probability, quarter high would should same likely quarter that leadership, the our see If, way come we high team in the third of then we regulatory may we it don't If a rates you historically. make handle assessment. an we'll deem probability, with work under we Cheryl's that

would stay with working So as We're we quarter. tuned here that and making say, we're the into team, regulatory assessment. get third the I further

grip the the these going terms and if does -- the Florida macro that strategy a of you forward? lot not, the question. Okay. the material And pressures of a inflationary does in your that raw at other Does Elkton rider of And last change see? revenues [stride], capture and all lot one environment regulatory

is know, foresee could the a the to regulatory rate was Well, case saw. as hikes, Fed And then, inflationary what we Brian, we and certainly, seeing consider certainly, think, team, as certainly are would at from that wage that as very rate relates are are types the it now to of things hearing approach kind that like team of we Fed where team say most what pressures, in insurance into as as a regulatory cetera. incorporate working and whether for trying so to with that et took could, is proactive, employers And we regulatory challenged of in we middle those terms that mechanisms we already. for the we'll to increases, some interest. of inflationary to it costs to But standpoint. of we're test-year opportunities with was we worked whether of the regulatory the it you look a our there as hike, again, consideration costs that certainly, these are things I extent We're feel us and from was I other relates it many in employee-related other right pressures projections being planning

looking there's we're performance. we'll to if Jeff, monitor our know relative So anything. and at to don't that opportunities, continue I

program GRIP program, recall may kind the Florida of self-adjusting. pipeline replacement the in you Brian, Yes, is

in to an as been a costs now. filing. place number those through for rate recover It require so, opportunity doesn't years have cost the And recovery we mechanism that's additional of them change, the

turn phones. I'll closing it further from to the back No remarks. questions Jeff for

your today, with appreciate and soon and very much, time look continue growth. we discussing Thank certainly you to and forward speaking we progress you to Well, Chesapeake's goodbye.

everyone can participating, conclude for our you call We does now that disconnect. and And thank for today.