New Jersey Resources (NJR) 3 May 192019 Q2 Earnings call transcript

Good day, and welcome to the New Jersey Resources Second Quarter Fiscal 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Investor of Director Puma, Relations. Dennis Please go ahead.

our Sean Jersey members our Resources you, webcast. our joined Steve Senior team. and Pat and senior Operating conference as good New to I'm well Westhoven, by today Financial Welcome Vice everyone. here and second Migliaccio, of and Chief Officer; morning, call Thank President Chief quarter Officer; President XXXX fiscal other as management

as and of statements our the assumptions our include today's in ability basis laws. X. most also do any statement expectations filed to which statement call estimates future our beyond many on within statements or as the caution control forward-looking results estimate certain including precisely forward-looking beliefs meaning herein, statements revise items expectations, our the in section found forming to XX-K call know to or in by today's We found particular forward-looking referenced any Form events. you earnings wish As of could These are from this not SEC. that to factors review on securities release furnished differ current and and that We Q assume light recent in obligation and contain cause the statement of for materially of slide can this Forms other X-K listeners the the with forward-looking be

to such financial certain slide our more that measures understanding Net a referring to Earnings will We non-GAAP complete be performance. or believe provides Turning NFE X, we Financial as NFE. of

substitute a for to NFE However, intended is not be GAAP.

of more fully our measures are XX-K. the in non-GAAP discussed Item financial X Our

and which our and turn call Chief from were like to with X-K slide is Form the found X. today's that results available filed up I with today's there will over and then also out of With financial by a -- President Pat are we'll Our Steve? open this projections to accompanying also website on call followed our questions. that to are like slides Westhoven. call morning. and quarter the on Steve agenda Steve your for to discussion, point the begin filed I'd Officer, review Operating on today said, highlights like

and Dennis a this morning's to good morning you've Hopefully, Thanks, chance had release. to everyone. earnings review

two reach to service, reliable To provide through Jersey to between to this BPU. Gas expect meet New Jersey customers XX,XXX Resources Natural outperformance demand to to XXXX. As safe our our be the a to of add X,XXX New contributions. gas six fiscal New our also year's no service fiscal segment Through Energy to included $X.XX the heating uplift with diversified quarter our over execute in with use we material over for We manages per territory of new and per customers operates counties. five the In home for out months preferred our We're homes Jersey. the the serve now customers and compared the of year, we reaffirming Services. results. for customers energy choice earnings has XX,XXX goal obligation filings and and guidance Last Natural deliver fiscal company, gas NFE energy heat XXX,XXX in, growing Jersey for infrastructure X made of with and from New invests results, net $X.XX $X.XX in and strategy XXXX. financial share first the reported $X.XX the we significant change of to added XXXX across six share continues natural continue

distribution by reliability rates rates. the more million the system. enhance last First, and increase transmission we've than approved were Since our XXXX, we rate March in filed $XXX million case and a a safety seeking BPU on invested to base $XXX base XX, of to our

XXX over We And customers. retired aging mains in replaced miles have we addition, new approximately also support have of XXX and or service safe installed our for miles to of infrastructure. reliable

to we systems. which Second, efforts strengthen pipeline network our filed million infrastructure program, technology and for a $XXX investment our continues X-year

know, its Reliability Burlington Link more already towns miles New Ocean project construction Southern Jersey's last The employer begun to Joint will the also diversity will resiliency completed largest on It benefits Monmouth you December, As the second and Base, have provide critical supply we've and operations. pipeline. of six and the support in than and XX counties.

constructing we and our remain pipeline, customers impact continue to committed the to minimizing the communities we As the area. the in

grow more for gas continuing constrained. natural becoming are We is and also demand markets that to recognize

low-cost investments continue sector infrastructure to more accessible midstream in natural will Our clean the to customers. gas make

continue continue these in will to advance role to play reliable customers. clean projects. to providing We to an important take affordable gas Natural energy steps

This distribution allows clean have to during various We we better solar continues efforts. that our in and serve in we of part our replacement BPU improvement renewable was infrastructure our an efforts integral cybersecurity and resiliency also and over to projects. It is system $XXX the assets, the necessary new that our future. our replacement customers us $XXX of energy our IT committed costs our slide systems, the million On with recognize growing includes strengthen the market. With infrastructure energy continues with million the second invested X, quarter. program to associated being also enhance leader filing of a which of the details our the filed are

this completed fiscal commercial since Energy a Moving are XX Clean projects an $XXX over year, installed capacity XXXX, solar of of to total into slide XX of and investment of about In add Ventures projects we've Already on XXX million. megawatts megawatts will four with installations and additional total, service complete these placed represent installations year. track two has X, commercial capacity. to this

new continues a X,XXX XXX now quarter be this Sunlight to Advantage over We success. program and solar serve Our added customers. residential customers

that, our call over grow systems, deliver business quarter. I'll resiliency for our see you we for of some and With in the invest Pat reliability the of our can results the As turn shareholders. to additional details and continue to and customers

changes Thanks, months Steve, provides three and year-to-year everyone. ended the both of six from NFE for Slide breakdown XX. the March and good morning, XX months a

the both new programs. were and periods, higher NFE customer For growth due infrastructure our reporting utilities to

However, by the for higher O&M NFE increase months partially six was expenses. in offset the

was increase to The due last results O&M increased during of not quarter, Energy the Midstream in securities recognized lower Our associated the in XXXX. to sale did effects in and tax well recognized as fiscal due tax primarily expenses. compared Clean credits, primarily gains that as quarter Energy during Dominion investment reoccur the to increase an fiscal in Ventures the certain XXXX year with

both, and Energy earnings declined year. Clean due year month Midstream tax six not the last of did Ventures the to this For that recur effects period reform

both of due hedging on to are in and cold of years. The revenue our We periods related production Finally future program for Services, Energy year. in weather the price highlighted volatility for slide as SREC sustained SREC last the results was lack our lock hedge compared decrease energy XX. to to

year reported hedged production and under XX% XXXX, expected from we SREC significantly now has the quarter. we For of construction, XX% facilities from increased last our energy which currently operational

years our driven The to desire XXXX levels. hedged attractive at significant and also hedging at both production was the increased have $XXX. BGS hedge pricing average by percentages activity expected of for an market of price increase We coupled energy in with during hedge XX% began year auction

shows Clean Our approximately the pricing increased of Compliance through the due our the a Payment. Solar driven average the strength capital Energy price by that XX passed Slide market in likely half balanced XXXX hedge this last XX% expectation from reflects RPS is the year of year. first was the to plan energy of Alternative for term SREC The near Act year

with last XXXX made we've beyond, changes Looking spoke we you. since at and the some time

the infrastructure other already in now cost a And item. February. Natural the our plan includes New with significant Gas improvement capital there overall IIP in A no XXXX. filed of included BPU with the of plan removal and been at is increase as had capital spending through Jersey program, line result, Our portion associated the in

capital for that timing date in-service expenditures the expectation. shifting adjusted the with align we've to XXXX, With in of later our SRL

Moving to XX, cash you projections. on and update slide to our financial I want flows

the We bonds municipal in quarter about proceeds new sale reinvestment of second quarter including program, of remaining this of the proceeds assets million. the total completed and $XX.X April during dividend equity our of for year. million This from million $XXX raised $XX.X we also of wind remarketed successfully

our plans capital growth capital to dividend investments fiscal the for are finance dividend flows by that as call well strong cash Our XXXX over anchored as and and now from help back will Steve. reinvestment turn I'll targets. program XXXX our operations,

named We're hard our us. work Thanks, to time And you to performance. Cogent Pat. that appreciate We the Reports. for according our I'd XXXX today employees took drives that their to join Thanks Environmental Champion like them. to recognize the

the now to questions. to our to – work like And team call our open call the for open deliver of proud questions open are yeah the for We sustainability continues I'd these for efforts. results. do

with Morningstar. ahead. We with Please Travis begin go session. [Operator question-and-answer comes will Our from Miller now Instructions] question first the

Good morning. Thank you.

Hi Travis.

being about what's especially leader, wind for energy obviously? you Jersey in think When and clean clean offshore appetite participation energy any, your New if

Steve. auctions part a developing place and the now, going governor's offshore in part a that be clean big and taking wind. there of to energy is are big Obviously, it's is forward So plan plan, Travis going this of right the that

come fit in and if to in our portion we participated good Jersey, line would place -- New not able along to size. are order pretty the have date. risk projects the almost market, just think entire were in would of way have up to find the service and we that niche right I then appetite large. to our participate, We territory does investment a coastline but in These

do on XXXX you you projects? round generally up beyond side as the Okay. those just get side? you on If of midstream the And might next might not Great. uses of specific find the them? what midstream How where kind capital then and see

we and going markets got region. I some look is building then opportunities that Travis, think that are to we I'll Natural One have economic. need and the very for that And once growth up in in plate demand. operable. to at that our two we assets. projects those constrained get It's ways. commercially We've on So, in those gas provide do the around great organic in

them opportunities those So we place. organic should come along growth put once in

we come provide participating know have in assets for the announce are it I'll to but for look to something point, we don't become we at that constantly The active very anything and able we hopefully are investor is think to soon. in additional one, sale interesting that We and marketplace the market this be we'll available that find with at community that for value. second could

it. Appreciate Great. Okay.

from question of Coleman with comes ahead. Bank Our go next Dennis Please America.

Thanks taking everyone. for morning, question. Good my

Dennis. Hey,

lower bit talk and a If I expense quite could about we trajectory that modeling. the O&M start have think if you about been should wonder we just than might in came I quarter-to-quarter? there how

specific or segment mind? Dennis any Overall, your for in

just guess, into start, down I want segments to break all but welcomed. if you to information Overall, is specific

Sure.

So bargaining March changes in wind to for period and Clean you Jersey that modest Those Gas, will have in associated Ventures assets today. no in one of of making expenses six the January costs March O&M course, shared by the collective the might later be segment. Maybe Energy that's increase on our we're agreement. if drivers partially comparable some IT drive biggest offset New services those they year-on-year Natural of the our actually with driven details investments some we be, months O&M so look had the largely those Q longer by

So drivers later and today. other available large offsets. probably By be and the the our in some large two will of Q are those details

examples past? just past handled there talk you your sort will filing look phase second completed the sort that -- that it of rate I of kind you've how for X-month the the window anticipate filing toggling you We'll for and thing obviously, project been has in moved be filing Can that. off within of the whether that? with it Or SRL are the guess Right. BPU SRL? second of post-filing and had we about

to going question. that take the ask of Affairs Hey, Kahrer, to Executive who Dennis. is our Regulatory This Mark I'm is Steve. In-Charge

Hi, the a docket. Dennis. not Generally would speaking standard that it's they reopen

case go amenable but to the but around later again, we little a we on that asked in-service had They have are a certainty determination dialogue our full single They to consider when this rate through with year to BPU that around SRL We more have need staff that's for. we need the arguments as filing that make with we've process. but a is the the it's and outright talk rather something as date, the we'll listening bit to said than haven't to for something Rate no, Counsel.

you. very helpful. that’s Thank Okay,

At our session. to Instructions] I will Price turn Mr. questions. And this to would there any no are Michael further like over remarks. conference closing this conclude [Operator back time, the question-and-answer for

you, to everyone thank wanted thank just us I for this Well, morning. say Sean. joining

on As a be replay uploaded reminder, our a call website. will of this

always, New Bye. As in investment Jersey we your Resources. appreciate interest and Thanks.

The presentation. now now you Thank conference for disconnect. has today's concluded. And may you attending