Detailed Narrative
Record Winter Performance and Reliability
New Jersey Resources reported excellent Q2 FY26 results during one of the most demanding winter periods in recent years, with sustained freezing temperatures in the Northeast. New Jersey Natural Gas (NJNG) experienced its highest send-out days in history, while Storage & Transportation (S&T) assets like Adelphia Gateway operated at maximum capacity and Leaf River saw withdrawals exceeding Winter Storm year 2021 levels. This performance underscored the effectiveness of the company's infrastructure, planning, and operations in delivering safe, reliable service.
Customer Affordability and Savings Initiatives
NJNG demonstrated a proactive approach to managing gas costs, hedging over 87% of winter gas supply at an average price of approximately $3.27 per dekatherm, significantly below Citygate prices that traded in excess of $135 per dekatherm. This strategy, combined with the state-approved basic gas supply service incentive program, generated over $93 million in gross customer savings during the winter season, contributing to over $1.6 billion in total savings over the program's life. The SAVEGREEN program also helped over 115,000 customers achieve bill savings of up to 30%.
Regulated Utility Growth and Expansion
The cost advantage of natural gas continues to drive steady customer growth across NJNG's service territory, fueled by new construction, conversions, and targeted infrastructure expansion. A recent example is the formal inclusion of Chester Township in Morris County into NJNG's regulated service territory, reflecting successful partnerships with communities and regulators to thoughtfully expand the company's footprint while maintaining safe and reliable service.
Storage & Transportation Segment Progress
The Storage and Transportation segment is on track to more than double its net financial earnings over the next two years, driven by strong recontracting activity at Adelphia Gateway and Leaf River, characterized by fixed-price, fee-based agreements with high-quality counterparties. Leaf River's expansion plans are progressing, with a FERC application filed to increase working gas capacities by over 70% and the recent receipt of environmental accession. The initial expansion is already underpinned by a long-term contract, with further phases expected to be similarly secured.
Clean Energy Ventures Scaling and Innovation
Clean Energy Ventures (CEV) continues its growth momentum, increasing installed capacity by 33 megawatts this year and surpassing 500 megawatts of in-service capacity. The company anticipates an additional 50% increase in installed capacity through fiscal 2027, supported by a diverse project pipeline exceeding 1.2 gigawatts. CEV is also exploring leveraging its operational assets and existing PJM interconnections with technologies like linear generators, fuel cells, and batteries to optimize sites and benefit from investment tax credits into the 2030s.
Financial Strength and Capital Investment
NJR deployed approximately $400 million of capital year-to-date, with New Jersey Natural Gas accounting for roughly two-thirds of the spending. The company reaffirmed its 5-year CapEx outlook of $4.8 billion to $5.2 billion through fiscal 2030, with over 60% allocated to the utility. Strong financial performance, particularly from Energy Services, enhances the ability to fund capital investments and maintain robust credit metrics, with management stating no need for block equity in the foreseeable future.