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Chesapeake Utilities (CPK)

Participants
Beth Cooper Chief Financial Officer
Jeff Householder President and Chief Executive Officer
Jim Moriarty Executive Vice President, General Counsel, Corporate Secretary and Chief Policy and Risk Officer
Tate Sullivan Maxim Group
Brian Russo Sidoti
Roger Liddell Clear Harbor Asset Management
Call transcript
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Operator

Greetings and welcome to the Chesapeake Utilities Corporation Second Quarter Financial Results. [Operator Instructions] And as a reminder, this conference is recorded, Thursday, August 5, 2021. I would now like to turn it over to Beth Cooper, Investment [ph] Vice President, Chief Financial Officer and Assistant Secretary. Please go ahead.

Beth Cooper

Thank you and good afternoon, everyone. be of to today. great is with you all It our us and XXXX. We joining review second XX, appreciate you June to quarter through year-to-date performance we safe executing on we investment demonstrated projects effectively, results, our our in new our growing employees this keeping as environment. serving and and operating possible Yesterday, how identifying customers, and announced as financial continue which ever-changing

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

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

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

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

have Additionally, of reports initiatives. disclosures to governance like our and added highlight key mention I’d that in to ESG we or some new some our quarterly environmental, social

today, to initiatives on these wanted We about he earnings on feedback welcome documents. conference later our our your reporting. talked our during typically Jim While more we would disclosure filed as will enhanced provide in calls,

key of company’s on results provide the our some Now, year-to-date performance. Jeff remarks drivers to Jeff? the and quarter turn to I will and second the call over opening

Jeff Householder

and you our afternoon good today. for Beth joining thank you, Thank call and

were the through usual, as call, When ongoing pandemic. pandemic of measures as first remarkably The was manage continued of reduced levels spoke the illness. many along continuing Let’s vaccine effective. last positive serious COVID-XX to and COVID-XX quarter terms update vaccines The proving during our infections good earnings its to the trend in news precautions with with preventative relaxed and we long U.S. plateaued. didn’t on efforts and be start, an the

an have cases our across territories. in service core country, in the including seen We COVID-XX uptick

has in levels any full. than course time Florida, reported been are As now hospitals of widely greater case the pandemic are the over and at the entire

COVID any our margin to-date all other not serve we and for services remain Florida of open However, point reductions states latest at is. in of significant any surge, there or usage are experiencing the business. Notwithstanding in this COVID-related we the

has another Our the possibility return plan cases to office that we long this COVID in fall. see included the surge would

U.S., months, Delta the few in have fall scheduled remote the were surge. variant’s Delta additional view UK. and been not in any variant India our the spreading past we the after in Even the teams school impacts work had better and a return of to watching late to to until after prior we Over the office resumed

to risk effectively and with of need potential office of another to was over returning remote a We year for administrative have really midst workforce operating been the there the well in no cases. a wave

Of services. providing essential course, an essential Chesapeake is business energy

they teams service throughout as pandemic. field operations deployed have been fully the Our remain

guidelines, We safety establishing wearing CDC distancing. and continuously mask including followed social OSHA have and health and protocols,

assist to very vaccination of our I their require not but encourage, proud to and employees choice. providing make as continue am they are We several incentives team.

embraced by challenges have pandemic. employees presented the Our this

of quarter, growth underway, growth with outcomes. successful drive very units initiatives many to continued continued across the serve keep strong ways our to performance. ultimately growth regulatory that XXXX augmented and have profitable Chesapeake’s financial our a projects very We find business We by customers had second

compared $X.XX, second quarter more to was over As margin share share the or XX.X% of $XX Gross from of than earnings per XXXX an of increased earnings our on Slide operations second quarter continuing XXXX. million X, of $X.XX shown per increase $X.XX.

expenses increased to close second reflect pandemic able results quarter. the consumer Our consumption returning for We were to conditions. COVID-XX reduce pre-pandemic also

margin projects, settlement, the Aspire expansion recent increased for Gas Some acquisitions key Michael the from Gas gas Natural quarter from of natural customer included drivers organic of contributions Western the and pipeline regulatory margin growth, Energy. Elkton distribution Hurricane and

as normal segment the volume. we in unregulated Our was down propane decline experienced seasonal slightly

expected as margins agreements supporting Marlin longer We Marlin to response emergency migrate Services maintenance, that from reduced also at was the pipeline earnings system first toward term to we operations experienced $X.XX, or Gas XXXX of per X an service share and $X.XX deployments continue blow-down was from Year-to-date, XX.X% of XXXX. months RNG increase continuing or compared capture transport. for purge $X.XX

continue We and energy communities the that significant provide services are These communities to deliver. delivery to growth. value we be to experiencing fortunate energy appreciate

X,XXX combined Florida XX new Maryland As of Delaware, territory customers average in Delmarva months. one day growth, measure our and of customers past over X connected new Natural Gas an we per over in and the business

in We X more have and we than of billion over non-regulated invested regulated areas serve. past in the growth support the $X years

just Our us of track putting million million. $XXX investment the achieve on $XXX XXXX investment to capital to through our $XXX annual capital range second under quarter totaled projected million,

financial year of net growth X X-year than is point more period. full which was moment for That income remarkable months our would the a our that growth total ago, XXXX of are income less As net million XXXX. over I $XX.X out a I is for these performance. investments our than first the mentioned driving annual

several the Southeast. next the on continued see Over and across and growth opportunities Florida we years, Delmarva Mid-Atlantic and

have Our rate natural above trending well average. been the that is national customer at a additions gas

X.X% rates X.X% in of are growth in seeing Florida. Delmarva, We

on We in through transport see to portfolio organic additions and me minutes. Beth? growing small-scale performance. pipelines, Our the back our opportunities initiatives across details Beth CNG our acquisitions. a capital energy turn expand selected let our over propane both growth a call I in quarterly and business business But continued business about just to of will Marlin more and continues investments. projects growth renewable investment for for transmission more units add few our

Beth Cooper

Jeff. Thanks,

from second for was approximately last last from compared by million rate to the growth latter period was the period $X.X the year-to-date XXXX, This income a income the representing the the our continuing operations This quarter $X.XX for net net second $X.X XX%. income to the of share to just quarter same compared $XX.X we to continuing the continuing grew million. for under Turning half for year. of of net to million compared continuing Slide from of share over operations in net income $XX.X half for operations quarter net $X.XX in range. quarter represents EPS per quarter the Earnings XXXX for year year-to-date represents million same to ensuring in growth of first the compared X, reflect stock same of operations share, $XX.X last from both million year. growth EPS rate achieved or compared growth XX%. per target growth a income of per second representing of by growth XX%. the $X.XX On large and million to grew $XX.X The $X.XX equity to basis, issuance

collaboration margin earlier, X, Slide gross on drivers, across As business enterprise. with highlighted was continued the Jeff, coupled result higher the net the of standardization management, efficiencies shown expense income and and

compared grew while gross Specifically, to the for quarter, margin income operating last XX.X%. XX.X% second increased the quarter year, by second

and Our the highlight a performance for the was strong to Energy the X both whole. segment second the quarter X seasonally year of third compared for as and well quarter the margin year-to-date. last for by led Slide light as as as segment expenses Regulated are the energy quarters drivers gross key unregulated and

margin earnings the the or after Michael reflect business generated a per margin regulatory from the earnings which $X.XX of across amortization share $X.XX associated increased For after in the quarter, tax. depreciation the and $X.XX gross regulatory share per key Higher impact, of settlement, was quarter assets. drivers terms per for share Hurricane

expenses. more share expansion added pipeline Expansion Del-Mar Callahan per our condition $X.XX acquisitions Pathway the from from Western Contributions terms added $X.XX per including program per returning share, from and added Palm our Reliability $X.XX to a and Energy in and the incremental Customer margin the pre-pandemic per per Our in $X.XX County share Florida margin from growth Infrastructure projects, added gross added share. per Beach Pipeline, about Intrastate corresponding per recent $X.XX margins Aspire of Florida share. consumption gas operations or added distribution after higher Gas share, natural $X.XX $X.XX impact share. Organic the our

to recovery noted I natural systems to above, fuel to also quarter the transfers like gas methodology valuation out the from CGS program, allows in for business, system would our strategy PSC In future purchased the which we costs that the to assets community gas advanced propane propane Delaware convert during point our In the connection earnings our rates. with in service. at this and for for addition the increase Sharp systems replacement approved

have conversions our to path. We expansion begun natural initiate gas along

over sales just to increasing equity was margin COVID-XX gains expenses will share highlighted, continue year. strategic Act. Jeff was and share and discuss that Slide return earnings equity initiatives can a represented drivers Unusual growth per share as per expenses advantage key of given X, also and across our share these per from impacted $X.XX months to generated incremental within the reduction several our as change conditions. opportunistic $X.XX offset with impact within drivers range. system, per per $X.XX gross see XX on The moments. $X.XX were asset per share. opportunities increases We issuances sustain well and few to fortunate to target a in gross CARES margin year past which the by associated operating expense strong On expenses to of our release. key I we’re of items favorable our of per $X.XX our included tax The market structure the the a growth share, new depreciation projects year-to-date, $X.XX growth our operating $X.XX the increase last last in announce operating in capital position in take to net share, you see pre-pandemic EPS with attributable costs as

Our pre-pandemic expenses lower $X.XX $X.XX we PSC also results per for per share related share of to in per orders, for as consumption related of COVID-XX regulatory $X.XX of positive expenses COVID-XX XXXX higher share. the closer contribution a our and conditions XXXX migrated reflected deferral of to

in Our structure with commitment to additional our per share $X.XX equity reduced year-to-date. capital target alignment raise EPS

announced infrastructure have and our ensure other X, investment Delmarva we XXXX previously capital Maryland, the gas the Beach expansions we at & We natural in ranging support invested gas new to forecasted Shore’s Expansion, Slide expenditures and sheet approximately Pipeline in project, with million and Light. the to demand our Western from expansion the sufficient $XXX Expansion capital $XXX regulated balance natural new associated Energy the including mentioned, with of Year-to-date, remains the capital concentrated fuel XX% we million areas, distribution’s Escambia access station the announced have investments. priced Again, the is Gas strong Moving County, for system County with to a approximately Power experienced improvement newly and the Eastern the program, maintained our in assets meter largest Palm guidance, as growth activities Florida in projects, growth. million. electric Jeff capacity competitively and energy forecast $XXX future expansion, Somerset capital to the Beachside Winter customer Del-Mar service Florida Natural Florida Haven system acquisition project, meet distribution Pathway GRIP to our our between have

long-term on As X.XX%. total now under revolver an end capitalization million XX% average rate at the equity, at of average you debt interest and Slide X.XX% our in approximately $XXX debt of short-term a which XX, our as comprised stockholders’ of was is June, an see fixed XX% of billion, rate $X.X of million, can $XXX

September XXXX. Our in short-term bank facility matures

we in the extending renewing the the process facility are and coming of weeks. in So

the equity utilize moved Our year our capitalization further our we’ve in total traditional hit Chesapeake has all-time have to to recent this equity equity million beyond issue issuance week plans we stock as earnings high reinvested some exceeded $X.X business. equity $X.X this capitalization and Utilities’ within continued retained new increased us billion target stock prices. of to our market and range and

regards the in earnings, though by will to including back strategic focus turn prospects Jeff to now call of our shareholder our remains on talk to growth expectations the I sustainability earnings further investments drive to to relates future increasing and guidance. local for about our capital our Jeff, as performance, Our our future back increasing value communities. and it that while you. making

Jeff Householder

Thanks.

strength the and noted, our support capital our Beth As to of growth. balance capacity sheet continues

our we very for Slide XX around capital as our growth, project our as what development with remains historic call well earnings five We updated target. acquisitions. efforts from on and which highlights comfortable additional focuses are on focus our our previously assets platforms guidance internal optimizing external

noted I continue our our expanding by a XX As provided businesses services major is investment significant of devoted our growth in of units. we A projected experience the demand to core Slide energy territories. to underway. highlights a capturing moment ago, and capital few our portion existing the for the significant existing business service initiatives

under have previously investment. our I development also several projects As that will increase noted, gas small-scale likely we transmission relatively pipeline

Our propane business continues to grow.

When opportunities projects, the market. Gas margin major and we Services viable looking in table. organically capture the keep Southeast. in these along in increasing in Marlin acquisitions, investment for both them acquisition opportunities we through natural become Mid-Atlantic renewable growth will We gas and And initiatives see with our

table key and and table. shown transportation, On which CNG regulatory Our Slide million, projects over reflected year-to-date $XX million margin $XX.X initiatives in including this as XX, a our pipeline highlighting of margin total increases acquisitions is latest initiatives. expansions, and RNG, on basis,

are include you, remind the this businesses capital prepared have energy have not include margin generate not unregulated not or organic are respectively. where growth expected projects to approximately expected in XXXX. but included million years XX we expansions frequently we we $XX generate to matured It incremental to compared and and also projects of outside the does discuss to Slide key The million margin XXXX, in projections. growth development, in acquisitions. million under As are to or margin in Pipeline XXXX in point total $XX.X gross XXXX for does $XX.X

include New projects pipeline Winter Haven beachside expansion the and extension. Florida in the

for As populations of demand high. a we’ve gas consumer remains are grow as our said before, geography and beneficiary we natural

Gas with estimates Gas. pleased the Natural million of full the $X.X particularly million $X.X of and margin from for acquisitions and and are Elkton respectively We XXXX integration and XXXX Western

also margin expect that area. Florida the existing Panhandle a Escambia the gain of meter from $XX the We in million serves project Pipeline recent the station our acquisition Pensacola Peninsula

X, fuel a plastic Service rider with Counsel reached recovering front, quarter settlement through was accelerating the Maryland In purchase approved pipe X-year cost and Council of significant July, ultimately proposed by we the a clause shortly Under margin our during Gas’ On the made PSC fixed thereafter. People’s in COVID-XX Public Florida that and or Commission. first-generation recovery Office finalized also over offsets recovered the charge the form will advances our the the of replacement for expenses Florida for the this the associated regulatory we of gas to a regulatory Public the the of and purchase years, $X.X will are through through in recovery swing in program, related X asset, Elkton our and and the the we settlement, establish agreement Under replacement the will regulatory adjustment pipeline million and existing of which recovery our program. operations cost be service amortized January We’ve division. beginning XXXX, mechanisms an natural the surcharge. Office with electric There with increase an asset. also Maryland amortization and staff power be gas

million RNG I the and underway at in from the our the development additional sourced XXXX Haven to get at turbine extent manufacturing supply disclosed. incremental Ohio. In station expansion to our of landfill for the several flag be we of investment projects pipeline in system Winter fueling or provide Once especially contribution currently and financing to information annual an Pipeline terms particular is Haven, and are stage RNG securing project the And have the project add of on that margin disclosed other $XXX given opportunity a highlighted included X investments Savannah shows estimated we gas the area. the initiatives, is of intrastate I in facility planned completion developers. through growth projects the have scheduled natural on $XXX,XXX time $XX.X XXXX. Winter additional remains placeholder our and slide do our million projects blending completed XXXX, closer for appropriate support project the believe, CHP anticipated projects we and $X.X dekatherms the first recent to projects X,XXX margin. development of per These Peninsula RNG and projects of agreements when The estimate the will construction of realize details margin of provide not we pipeline day XX. service to projects hydrogen the these full interconnect expansion project underway began service. company in Marlin Florida related a on of Florida develop transport distribution yet transmission of support Island gas under our transportation, Gross firm for RNG compressed as million fully our considerable Pipeline, take contracting project $X $X that under have with for RNG-related complete XXXX, RNG gas development. Slide installation to of in million facilities completion. Amelia will gathering pipeline XX will projection, renewal to Slide will operation. generate for quarter Central provide in million those

of additional XX.X feeding and construct to transmission company this gross per of City Turning Florida serve River beyond. pipeline expects XXXX dekatherms The expansion. in margin to NextEra’s XX,XXX Indian distribution generate Extension in Gas’ XX, of million County, in Pipeline the to expansion Peninsula of Beachside Florida, Slide service approximately firm Beach. miles vicinity Vero the Gas subsidiary, Pipeline Florida areas support coastal provide of day expansion will in City $X.X will the

interconnected the Transmission XXX,XXX a from $X converting which Gas is mentioned Florida for million while communication projects three customer to so focus, perhaps growth business are in plant, Escambia of gas meter development Beth projects, during Florida margin responsiveness our even continuing pipeline coal of up pandemic, as ability planning These and business & asset station relatively our earlier. and mentioned find serving Light and the the XX, in day small develop development of generate needs in provides continued Pensacola, Slide will indicative earlier, our firm this natural to of annual By service for where with dekatherms XXXX, context remotely. a done on Florida. Finally, a our to total to global has power Power much to a service

several we have are number Over are renewable pursuing. Three highlighted the past a of gas quarters, projects of outlined that initiatives XX. these on Slide natural we

Energy, Aspire Rumpke XX.X-mile project Our & processing natural will developed Landfill in pipeline renewable Noble Waste transport at Road facility a a pipeline RNG from to their Eastern Recycling Fortistar construct Ohio. landfill gas

for distributors acquire and will Energy will RNG under The pipeline scheduled of Aspire to Once transport Aspire later this in-service XX% total for the Energy’s customers. gas is end-use every volume RNG year. construction it the volumes. and represent flowing,

of Company DevCo station renewable gas Gas development produce produce quality and at Southern on center availability we projects is under tankers. undertaking CNG for The to Port under Peninsula, natural gas CNG RNG the gas Savannah. Savannah, construction pipeline CNG In port distributed project. by truck Natural both utility logistics to Gas Eastern be transportation waste. Services construct Marlin and that a dependent serve serve Delmarva with CNG will ultimately the The a each the Both are feedstocks projects tariff designed On vehicles station CPK’s natural of their to will and are filling poultry fleets, Marlin the Shore will CleanBay our customers. Renewables are the filling as Bioenergy is working from commodity Gas, of RNG facilities the schedule for timing of different Georgia,

station gasoline later produced enable are XX%. vehicles, to option. RNG is emissions working offer by up go us oxide natural lower to The this than scheduled will an XX% renewable We diesel secure gas by emissions for and sources to nitrogen carbon-dioxide and emissions XX% reducing to premium CNG station year. service the that fueling vehicles in to

project Bay homes, of Forest, gas. to-date. also gas as exciting We in Bay a another began conversion single development community residential largest the June of Peninsula Delmarva commenced will to XXX conversion we Forest natural development be propane the system the CGS the on

to see I a Delmarva those a to Of the surrounding was Chesapeake XX,XXX the natural Beach course, are in occurring little the Maryland conversions, CGS as know and they areas but ensure developments. for to conversion expensive. the City, our was that saw sandpiper development of wanted Ocean And over somewhat gas part long-term propane back towards significant our more customers painful areas and strategy it’s propane a decade. over of well We dating that gas part of folks

electricity customers over have solar appropriately technical systems we hydrogen purposes, a and on allow identified with renewable XX,XXX is take installation years from several with interested burn hydrogen hydrogen beach the green to been to equipment reach plan operational. We’ve propane consider well. Other prior to Energy and Our our customers additional Department the as CHP in underground will complete on a proposed maybe introducing held into mentioned us It Eight and that companies to natural last gas. Amelia test we’re at the our turbine I plan to Eight on gas the operations move successful have Turbines. place customers for terming staff will research testing. test other until the the systems. hydrogen propane of that conference site a us area these opportunities source of the to a up pipeline At were of pursue to by We’ve nonrenewable offered that propane note, waiting required X% – and that immediately a new and to conversions CGS Flag has in we’re gas. well call up project acquisitions been Island purchased, produced consummating to high-growth mix as our startup working growth converted Solar on accretive in hydrogen Delmarva states continue as we blend natural to additional We’ve in system markets. in and a when several supporting in for the standing propane fully we are both converting to Flag

hydrogen We initial large able plan Eight retrofitted begin are tankers testing gate the to existing to tankers months. and steel on Our hydrogen to work cylinder be three Flags of underway. Marlin next is few transport over

We customers our are also existing opportunities with several their industrial for blends facilities. working to at identify of hydrogen

We’re gaining attributes full at equipment. learn at of the Primary And beginning particularly availability the understanding this of promising. testing measurement the hydrogen, impact share as more the in a customer of and stages on areas time. of appropriate downstream operations will safety, effects we opportunity, is the we about

to Let of our and now the commitment call initiatives discuss and our some our corporate culture. to sustainability already where more Jim? ESG to strategy over recent me turn of part Jim, as we regulatory

Jim Moriarty

Jeff update legislative great I providing by you, today. been and would Thank good we’ve an that to working afternoon to on like everyone. actions with It’s begin you on. be

June. one our bill energy Florida work resilient law. the energy Similar the the new that shown diligently others to of an with also gas unrestricted late promotes natural and of been the was in Ohio, reliable territories. XX, adopted service As of the affordable, on state, resource governor Slide and as along another preemption in availability in has choice signed by advance this in many legislation We, state consumer

gas authored and This and the cleared energy that by the for biogas also defines chambers certain natural This bill state the generation we that of sponsored law PSC exceed into rates promotes new in In conditions. signed distribution was in and injection transportation, electric cost may under in both excited authorizes bill about RNG that governor are to late and use a renewable Florida. market The June. approve and addition, gas law recovery their renewable systems. we contracts

residential, important supporting these customers. new firmly of resource demands the other is government legislation affairs reliable and meet affordable, industrial and ensured Ohio gas to these states. readily and natural energy our resilient I team remains joined which driving our within am XX states, for that proud that the clean, laws, and Florida available commercial With of such have

to recovery provide portfolios First the while part of delivery is of recent customer initiatives renewable reliable states. regulatory a and be to XX we business a public to our customers. mechanism available ensure throughout natural meet safe, gas to to key – viable our for and Slides further investments energy secure and foremost, also commissions that energy have natural demand with and port XX in of supporting affordable where our the some of various service to worked lists proactively our gas

Slide on Program, Reliability our in business Public invest continues shown unit Utilities to XX, GRIP. our Gas As Florida Infrastructure Florida or

We have $XXX upgraded XXX a miles of pipeline million. at cost of

expect Florida margin The on settlement of and to of investment the than million no end recovery settlement provides $XX Michael complete return in XXXX FPU for we later The gross in program Panhandle. for We by Hurricane the made the this our investment allows XXXX. of to restore XXXX. system electric distribution

unit Commission expected million Gross mandated natural with costs relocation be XXXX million $X Shore in highway gas authority or associated in $X.X transmission interstate Federal these is projects. and Eastern Energy to associated the with to recover Regulatory has XXXX capital relocation projects. Our from railroad margin

acceleration XX, program company replacement settlement earning gas STRIDE servicing complete the agreed accelerate Slide the required. County to Moving X-year pipeline on in an natural gas, and enables to while regulated investment return This to PSC a the replacement faster natural to our utility Maryland. a us Maryland appropriate Elkton Cecil program planned for this

The personal our initiatives bad business units regulatory amount work. $X.X will to company’s utilities debts, regulatory assets million. protective X-year and approval information relates in Florida for the a includes equipment PSC remote recent Finally, services establish the regulatory over period most expenses The one enable of to of XXXX. asset for Florida to regulated beginning our recover business a COVID-XX-related incremental

environmental our governance commitment on Slide on focus Utilities ESG, and sound bedrock shown stewardship, Chesapeake dedication to to to social justice As XX, build on continues a principles.

and and Our inclusive volumes Awards, workplace Workplace year recognition the recognition continues culture, development which to growth the communities. our long-term well serve active engagement of employees in safeguarding governance value been stakeholders. promote corporate the top essential one our all as a in our and we to in as areas speaks Strong diverse commitments about our creating for as to Xth has Top the the our and Inaugural consecutive

stockholders to provided our we and our that framework the embedded Board the results ongoing road results, the proposals this extending more which of of future committees governance. throughout have voted chart of and to support ahead. guidelines favor over Directors continue were our other annually. engagement, shares the Active strategy. and adopted demonstrates Our as in in year’s vote and Strong not and monitoring the effective corporate presented. people, with This be performance together of policies beginning includes of is company, Based governance important company stockholders’ our for its listening on have our could XX% a also informed the Board and the

Turning a to in across operate environmentally manner our furthers our practices friendly to sustainable safe stewardship Slide XX, our and facilitates and responsibility organization.

enterprise incident gas Our announced Florida for by recognized and each Public from emerging rate American program, day. part company are embedded guidance demonstrate Gas recognitions to risk. unwavering vibrant factors working in ESG-related In their program of These within our team Directors Leader three our safely an Chesapeake commitment Accident management total focus we that ERM as the early Prevention that a Eastern Natural Award further presented and with for June, Each and our are the Utilities, businesses key each were risk commitment below Industry average. mitigating regulated evaluates risks safety, every ongoing the to achieved of Company Gas safety. XXXX. of Association identified our industry Utilities with areas Shore and were Board

for safe employees safety performance strategic our and with priority both is is a objective short-term strategic long-term. is other, of in safety our are. and our providing of customers the our serve. communities we first center at only initiative to a achievement Safety top and to each the an not priority committed workplace are who our making important interactions the it superior and We we in The

training plant Town facility Florida for second Delaware, safety and our town colleagues. our operations provide facility in Safety Our hands-on and Dover, both classroom in

our we which information corporate later be ESG insights inaugural additional year. will be sustainability our and responsibility on on working We are diligently stewardship. will and made also available longstanding providing There, this report,

to values sets background, employees our diversity XX. on skill as environment and that committed providing are Slide and We a of work experiences highlighted

EDI and to central around The to supports is our the diverse engine are a further inclusion want and will we be Our workplace and we to propel culture sharing our the us enhance driving to experiences employees collaboration all company. is council help equity, and our mission communities that Council embracing who to of make and diversity backgrounds their serve the our who and we business. improve better

amount resource employee contributions short time. the or groups, a that made Council five ERGs, Our strides in just remarkable are of valuable and by EDI fostered have

excited about We are of the creation ERGs. other

know to talents their our our for share ERGs base employee that Our and valued EDI-wise and by for the employee been employees The to community. and knowledge, have diverse talent, to company. opportunities across are the provide insights they webinars supported channels larger forefront brought and that our are inspiring, ideas skills have

Finally, of to XX brighter the of Chesapeake’s scholarships building to award our we as honored a were future, employees. to children commitment part

we to of culture service questions diversity to scholarship key inspiring of One the Utilities our that as generation. to in and identity. the the was all how our place make answered were is a responses better testament we Chesapeake embrace winners next do. a Their nature Community world

reflected our work technology and left hard is improved emissions, our greenhouse so ongoing affordable efforts day we no of detection reduce As service to to services completion program provide gas compressor stations. behind. clean, pipeline our every resilient one energy and plentiful, replacement at is that in delivery including This to

suppliers efforts. contractors We to and our encourage with environmental working their are also

sustainability large reduce the and identify that about diverse our RNG excited programs carbon technical assistance by projects conservation underway customers to and of our the to high-efficiency teams we and engaged volume appliances the as reduction serve promote are as well We footprint opportunities. emission communities for

is remains we conducting, I deliver needed, our some the turn comments. advance call Jeff? commitment Our continuing to will necessary steadfast while when appreciate steps today all it to you to take and with closing and now energy Jeff being environmental back stewardship. to the for where

Jeff Householder

measure long on XX returns ROE XX us. major performance focus our our regulated are goals. for produced period reason I Slide of we’ve to for return to an performance. ROE We want over authorized a regulated Jim. on to our a time. exceed share metric but higher on regulated return our to limits. past the return of the our good emphasize per We’ve on equity non-regulated contributors consistently overall key for charts than equity results. another exceeded important Thanks, take XX% moment as We optimize years. But tend managing been financial historical prudently earnings We’ve businesses businesses these is to returns,

adding Our above strategy consistently shareholders. selected capable benefited of businesses our our foundational returns of producing of assets regulated non-regulated those has

X-year billion. to XX update ahead investment the can that of million of us we $XXX on capital high latest Slides strategic XX, to of $X a XXXX for you I’m and guidance our that gives confidence As have continue our plan significant opportunities period degree we reaffirm XXXX to see excited us.

$X.XX to guidance of representing per and remains whether XXXX. natural believe of XXXX the component propane of the XX% value, at initiation also approximately country’s guidance serve end we strategy. energy an the that’s that $X.XX growth share, we from average services support We EPS Natural of energy gas to our our electricity. gas, We a continue EPS deliver of or long-term markets key the range

given here provide strategic the At Our that expertise a to customers approach our and energy sustainable and have business we to opportunities spoken on now have this wildly time, bridge the renewable mix, the future. in new capitalize same opportunities from regard. more

X, including X, July XX% on for XX the We’re top has growth delivering focused and exceeded through XXXX. years way, by performance, each return, shareholder compound our quartile which, XX committed period, annual to XX, growth X, strategy,

commitment Slide Our XX. upon performance, on proposition to based outlined investment we is our

Our strategy, employees. our level a dedicated performance thank Utilities of our sustaining all philosophy Chesapeake employee few of engagement by of I our all initiatives, in support in disciplined operating to objectives our financial our achieved want a industry. and are

pride to our and deliver to us in success great takes reliable clean, day customers. our for and safe team Our evening. Thank the joining work this we you energy do every

have. We will you address happy any to questions be may

Operator

Tate Please line Maxim [Operator Instructions] is Group. go from the ahead. of Sullivan First from question

Tate Sullivan

Hi, I’d dynamics Delmarva. projects. related a thought the the Florida, start is I different and of different on a mean how is projects thank hold customers the providing with and you. some other capacity Good well. Florida than Florida, add mean, new think like detail I there it afternoon. – Jeff, I And refresh and bit on I it can [indiscernible]? give service to to just you projects a urgency Can some serving overview be of how to the it’s seems territories could broad as too seem you

Jeff Householder

on our in a have, of Well, move We tell number you on County for expanding I’ll right? know, bit of as little network well Eastern today we projects, and Peninsula. Shore Gas we Natural have places years, as both, it’s other a transmission and you, to been the continue down Maryland Somerset Delmarva, that

We have of of number in Florida transmission intrastate Pipeline been with that activity duplicating business. our a kind Peninsula for years

customers, a systems way. primarily companies of end-use customers although are two provide distribution of that the those variety certainly, so serving to pipelines industrial service the And to are transmission transportation both those service direct along providing

homebuilding kinds to in and is on pipelines, variety where same the customers are transmission infill, Delmarva and things significant Florida seeing both significant are activity Delmarva by we’re of of building usual serve both Florida, a in followed commercial substantial both customers. we happening and distribution so growth, those industrial there demand And the and

continuing if the more I just for Florida business focusing have or for additional would than like on look happen But projects sounded to Delmarva. the in areas three right growth. were the of both know new we opportunities We we in Delmarva. two are on say were in So and Florida to don’t I transmission it are

mentioned, many, frankly, large they use at other expansions to transmission both are facilities, and we to that are gas they end territories starts providing and service many housing measure as the utilities, distribution seeing, service to I providing service We’re customers. our services providing in are those many, a

Tate Sullivan

continues will Light Power on – did can would get give territories, I and how – & I Florida the in you background Yes. just sell growth and a distribution station what systems Escambia slight meter to territory, service or want follow-up mean one why acquisition… their – more to mean within I that on think I of both – us their also

Jeff Householder

gas delivering part It which to service. interconnect coal a negotiated pipeline actually smarter was the access that provide converting into us we on and point providing to that’s Crist have is was gas facility, gas that hope service in FP&L the It’s natural of some to some But future, in an is FP&L agreement in between point at transmission to for Power now down over at a future, we the quantities additional an will that nailed we this us haven’t point yet. that area. hope it and opportunity primarily

multistep step it’s So, of to one a to deliver opportunities area. more Pensacola what be the our may expand process in gas

this been So, has will point. But that happens. it if not finalized we see at

Tate Sullivan

about one, last you and is remarks, Delmarva, in your And day that think the a earlier or I customers mentioned XX Okay. in same if…? new in Florida

Jeff Householder

a the homebuilding over just although It’s saw on the Peninsula. is significantly years less more think But to what we rate that, we X.X I Delmarva. amazing just see been to peninsula our a just growth than our – or percentage the growing fraction hair Delmarva the on on really last Maybe so. than activity have

in them both net X% are X% So more they rates per yes, the do we now relatively or have, more Delmarva, Florida, fractionally than similar, the but range. but I customers year think, in growth in of

Beth Cooper

margin on the add is included release, And press add I I actually would we to what that of some going our information growth. – just In am customer sorry, to Jeff.

running what is cases, that that there several and years trend can you the so higher. are we we a for very And little to slightly in in some doing have been bit similar see higher now

this got customer from new have we margin incrementally of $X.X about million. year-to-date, So, growth

time-to-time future. industry Florida, which they that Delmarva forth into and like significantly from go back growth on are growth rate will to continues but we both growth rate above higher, customer continue strong is running and So, the it’s between at and appears going that the the foreseeable

Tate Sullivan

you, Jeff. Thank Okay. Thank Beth. you,

Operator

Russo of is Sidoti. the The Brian Please from next ahead. question go from line

Brian Russo

afternoon. Good

Beth Cooper

afternoon. Good

Brian Russo

Yes.

constructive enabled with have the be And the expect that that you and in can now advance backdrop natural accelerated and in the might have accelerating with legislative discussed. sense support? we to projects can further gas you of out now legislation you some do Is – on the projects announced? your that projects been Florida for Just just you in Florida pipeline

Jeff Householder

you number here probably different But second. is for But business of regulatory environment. here up a will legislators. help many, There a I structure Jim many governors throughout and a it’s of is and as that. of any very that years me different and little number tell in this has is supportive and a of The been in with Florida expansion constructive

able anything is And we don’t it’s have do been that nice I it know to wouldn’t already accelerating that to so certainly that. here. But a feeling

providers do fight You are way customers think make local to have to doing. to to is continue of we through to central what going sure gas we and other and your we to provide a energy what choice number brands not that that the different fuel are

Brian Russo

any I update the Maryland, was RNG Bioenergy with there? it you think, if Okay. call, in, maybe processing I possibly conference last on And recall discussing in investing up facilities were DevCo,

Jeff Householder

development working process then We which a facilities with mentioned the DevCo under to be Delaware. facility, project in different number LNG and the Maryland. in happens in has you Westover, are facility CleanBay currently The Bioenergy of of Renewables a

those is intention of projects. involved and in both to be actively Our engaged

with works. scheduled are operates now have final that and contractual And arrangements will that facility Bioenergy to the that DevCo go operated processing are with we all Lockheed is how from who to developing is that investment DevCo purchasing how an we the We working a we deal Bioenergy underway and that develop gas right facility to facility.

investing evolving are a renewable of others of one and are these it’s to people issues variety deal see as people There structure to emerge kind that options looking in and in of earlier. It’s and I spoke of those different projects contract us interesting investments. them. that at so are potential And structure interested like those

Renewables close is will as so is along existing us I what service projects territory. our doing think see Bioenergy as well in that on of actively But being a in path. to involved others what very CleanBay Peninsula DevCo number right And you doing we and with and Delmarva other are the

Brian Russo

that great. capital past in down surcharge And $X margin wind to I million believe program Okay, for the XXXX year? its XXXX extend does that then program, or cost

Beth Cooper

an additional there, basically would the included is that’s at for we Brian, back future then If from that investments been point are set in associated in is annualized go additional margin, been so That investment some speak, what’s made point at added, there the with to time. get the in those. rider

Brian Russo

I rate or in it. place – got Elkton, that, suppose with filing rates regulatory all if in Is on of rate look separately at then from matters? in treated and that And STRIDE, way you it? the Okay, just raising other the recall I Elkton STRIDE out agreed terms to lastly to that’s is then still cases. and stay the program the

Beth Cooper

to it. look way the is That at

certain to relates in. have to in come back have when various requirements our We as it we Maryland regards to jurisdictions

so that of may several we things entities that standpoint. have given looking different approaching consolidated that be one at small we are a And is – the more we from several

that, established in go this we at outside timeframe but is we back that when that. go change in and yes. to consultation can and back may the looking with Elkton, So, after right was in, when working Brian, for in timing But there planned to PSC regards a now, RIDER regards of

Brian Russo

that just And acquisitions. was Okay, be if then could you pursuing I that on great. curious bit? you correctly, heard lastly, if a might elaborate Marlin mentioned I just

Jeff Householder

we that, there possibilities along. been be as that that opportunities similarly pretty constructed will some least at are Probably at look I you think we at Marlin. come or to to tell have looking opportunistic likely to the There businesses not much, and are acquire yes, acquire opportunity businesses can

goes. And so we will see how that

especially earlier, that the renewable a doesn’t over service be markets will of that to to transport to segment show the needs gas I of the a markets out years, for pipe atmosphere little in there natural in ensuring think I that gas market consolidation mentioned and escape then couple when of continue the some maintenance. the up capture be next of opportunities gas of as bit taken

there organically acquisition. and more much adding and doing substantial Portland think be equipment on we may side to I So, we the there resources. some that, opportunities opportunities also facilities investments we and for making see personnel grow some as are in are But think

Brian Russo

Alright. Thank much. you very

Beth Cooper

Thank you.

Operator

from Please of Liddell Next Roger Clear go Management. ahead. the question with is line Harbor Asset

Roger Liddell

the to afternoon the wanted performance. XX, and state quite obvious. on equity to It’s Slide Beth. return Good Jeff I focus on extraordinary

a happened you and on of opportunity saving – that shared climate same opportunities characterized us perspective to have have create extraordinary period stands shared would am and was there And ROEs I I that so savings. up. the over of as what kinds But for regulatorily this to that, created as And ROE? of an whole issue caught as And consequence extraordinary decade. sidebar generate ability ROEs, been Is durability, win-win of the had think regulatory by is how your and political think create, here by shared structured such it may company attitude, you I lot opportunities. that generic a comment savings. I the shared And a have there in last in arrangement mean XXXX, is has roughly pursuing savings like that’s you the the durability you the And in the to Florida. have question your perhaps tell an starting can ability that of I uptick politically

Jeff Householder

minute. take and jump will part Beth, first down the wait I that, of then a and

since the more of pointed transformation business some was on chart. involves double are of look earnings at organizational or the units. restructuring And all at to size period simplification business out company the process collection individual bit done process, several the that us And over perfectly to standardization the the the talked the three as internally just that It’s about as time, units. have units. looking and a business the you and we intention our among we involves enable to across within this a the a us allow be a this all calls, one have in previous the it of driving in little We – and we of again XXXX say years than company to bought times us company next and

And we the across refining cost those. hunt drive returns earnings same are very for on in the tricky continue and our so and time. managing to to the are at additional company efficiencies But we and it’s careful

We our our are next the of over improvements improvements ability recover fairly deliberate cost in of years a entities technology major to at from regulated the with the looking and filings. technology those several and series course rate

many seen We ways are the years. to margin, looking at continue you over to as us last drive do have

Our focus business sharp. damage that investments. would pretty We quickly development ultimately and be not would acquisitions we look make that returns. do at not pretty not And these do accretive is

this in And disciplined so to we our have been approach growing very business.

year-in that I prudently it’s just interesting are add because only we add that just we sure things managing and year-out We fairly there that out to that those to because to are us continue things we or to hit allow things to assets assets that not bigger get And adding trying are targets. consistent, have the think, do. making we linked will and then these already consistently and

a it’s you combination I so of assets And have. managing think the

say improvements. do lot skis you for are growth We get pursuing. to in Beth, And looking far I am we the over to opportunities that. that addition efficiency sure are for a too not have out acquisitions in

Roger Liddell

you ability reductions savings There a Jeff, Chesapeake. by the I asked operations savings you Can I currently in in savings didn’t markets terms and technology, serve by what through went just for the in the shared those I identify savings appreciate, shared therefore, But costs just scaling. you solution is ROE. a second, through delivered what I and have resi and of for a ask clearly. have I bud communities integrated communities industrial can driven enjoyed slow the drive apologize. the being through in that serve, that are question through to borne higher you should

executed fact, in promised the as is have you community. and benefit the In

to for my that’s maybe clarification that my that did question, is – on is you? useful Beth, Now

Beth Cooper

Sure.

history, record terms that, I you of if you think back in I Roger, the of as our at look – look rate think our track over things one increases.

to things of we is organization and increases have able as not One – the at successful that grow and bearing being not for our been causing that an really customers.

a there our of our – jurisdictions If all in across been activity has board, from standpoint. the you rate look limited

been burden able existing customers. And grow, to able we been so have we have to not

little investment. in have we are a lot to utilities that for situation is of increases it so, cover And different that their to going relative experienced frequently a rate

where years, Delaware, I period Also in Florida, time Central in for we over you have in can action tell jurisdiction. twice or been XX we been very Gas been been in once it’s our our a time. and in again, of if last, Florida time. gas in regulatory long that the long FPU division, natural any think, our Similarly, have you Maryland, period of period maybe So I of in look at a Maryland it’s

increase are want So, having by successfully payers do we constantly growing. we existing keeping continue to their managing as we are them continuing ultimately rates to to grow to implications without rate and are to that. any we And

opportunity one we of as the have, are Jim that that right, say, to of I think to things we that’s lots to have – continue great likes also, expand. areas have

started, an see to are we historically. think, us to answer Roger, where going So, you you what have near done I

there a in and pursue because growth natural a Florida for going are desire to demand We gas. is

on You are going Delmarva, right. us to it do see

us to counties to things display markets. competitive and gas us you natural that are see energy fuels. expand bring at and to We want alternatives same pursue our to want time, other like that alternative And going have and options clean to see the solutions RNG

And so a place. think answer, I I would great in is Chesapeake

think I Every update back. plan. year, we we strategic year, every our come

we did our support guidance, Jeff today. say to able been have We as

So, I is think future our bright.

discipline have us. to of are have we opportunities execute this shows. years we with think on you going last XX for that done plus that chart the But see got I us before a same the ROE lot

Jeff Householder

passed those been along. continue couple as savings other I answered. But continue systems again, to, appreciate that one our it. that’s better ahead a see on runway of billions the a we systems stable dollars, of the customers country. to shale question in a And long provided revolution through savings well pricing than – that And we chat the Roger, of frankly, and little Yes. has will pass to the to there. around as things to have a would Obviously, energy to gas add much untold the millions just And I to that I about pretty opportunity bit.

of markets in We is place. program, these are are moved for renewable seeing the gas And generally they into facility all attributes the or largely supported happened system the for commodity California, many are the economics markets. lower of pricing. the also of speaking, while shale being moving looking are some interesting at even of that gas in we LCFS and a traditional the moving like at example, front. Canada, and projects some what by supporting the into to home see than pricing vehicle California some moving economics things attributes RNG of green gas The through actual other of distribution on green the are Oregon many these And itself, the molecules cases, development

And in so price an are that renewable by supported continue low our it’s interesting to provide opportunity distribution fuel to systems gas.

Roger Liddell

Thanks color. very for helpful. the Good so you expanding much. Thank answer,

Operator

time. like questions to Instructions] Householder back any other looks [Operator remarks. I this no Jeff at closing it there for turn are It will

Jeff Householder

you. I this the us staying with appreciate evening. into of late all thank Well, you

information, good follow-up very As additional Thank to be you. Beth, always, delighted and feel if myself, us, any and much, Jim, we contact free of or need you questions would have you additional evening. help to

Operator

your today. you That conclude thank participation, disconnect your does We for conference you can the and now call lines. for