New Jersey Resources (NJR) Q3 FY26 earnings call: guidance and Q&A

How does the rate case filing fit into the current regulatory climate, especially regarding affordability and recent BPU reports, given past strong outcomes and gas's position relative to electric?

Management stated their filing combined the rate case with other measures to protect consumer costs, acknowledging affordability concerns. They noted the process has been normal so far and emphasized natural gas's position as the cheapest heating option.

“So you saw our filing back in June where we combined our rate case with a number of other filings to really protect cost for consumers. Obviously, that was done purposely.”

asked by Elias Jossen · answered by Stephen D. Westhoven

Given current strong tracking, how does management think about rebasing and updating implied FY27 numbers, especially in the context of the 7-9% growth target from the FY25 starting point?

Management confirmed they will provide FY27 guidance in November, based on the 7-9% growth from the FY25 starting point of $2.73 per share.

“If you remember, the starting point was $2.73 for 2025. So from there on, you can grow your 7% to 9%, and that's kind of what you should expect.”

asked by Elias Jossen · answered by Roberto Bel

Any feedback on bill mitigation proposals? Are there structural differences in this rate case cycle, and opportunities for settlement similar to prior cases?

Management stated the process has been a "normal kind of plain vanilla rate case" with no differences to point out so far, and they have just started the process.

“I mean, this hasn't been any different than any other rate case. Just a little extra color. This is a normal kind of plain vanilla rate case like we've had before.”

asked by Constantine Lednev · answered by Stephen D. Westhoven

Do EO1 recommendations create opportunities for more certainty through multi-year or formulaic ratemaking, and does the BPU consider this?

Management noted EO1 has primarily focused on electric companies, not gas, but they are watching for opportunities to make the process smoother. They are being "opportunistic" but it needs to play out more.

“To date, those executive orders have really been focused on the electric companies. We have not been closely involved in it. But we're certainly watching it for opportunities, just like you pointed out that if we can make this a smoother process for all, we certainly look to do so.”

asked by Constantine Lednev · answered by Stephen D. Westhoven

Will incremental S&T capacity maintain similar capital intensity, and what pricing data points are seen for recontracting and incremental capacity?

Management expects expansions and capital intensity to continue due to strong demand for midstream services. They noted opportunities to expand Adelphia Gateway and add compression, which are not currently in the capital plan but are valuable assets. Recontracting rates reflect increases.

“I mean there's certainly strong demand for the services that our midstream facilities provide. As far as moving forward, I'd expect that expansions would continue and that capital intensity would continue.”

asked by Constantine Lednev · answered by Stephen D. Westhoven

How will ongoing debates around capacity markets, resource adequacy, and interconnection reform impact CEV's project pipeline and long-term returns?

Management sees opportunity for CEV to expand and add to capacity markets using existing infrastructure, which they believe is the cheapest way to add new capacity. This potential CapEx is not yet in their plan but would be additive. They are optimistic about participating in this market longer term.

“So we see opportunity with CEV... the ability to use our existing interconnect and existing infrastructure to expand and add to the capacity markets. Capacity is more valuable.”

asked by Dylan Lipner · answered by Stephen D. Westhoven