Chesapeake Utilities Corporation Q2 FY2025 earnings call

Safety Focus: Started meetings with a safety moment, highlighted National 811 Day. ### Rate Cases: Received final orders on all 3 active rate cases in the last year. Maryland rate case approved $3.5M annual revenue increase effective April; Delaware rate case approved $6.1M annual revenue increase in June; Florida electric rate case approved $8.6M annual revenue increase in early July. ### Capital Projects: Brought 6 major capital projects online in the first half of 2025, with projects placed in service generating $2.5M in Q2 and expected to generate $9.8M for full year 2025. Incremental investments led to $50M increase in full year capital expenditure guidance. ### Regulatory Strategy: Discussed progress on regulatory initiatives, business transformation efforts, and stakeholder engagement. ### Business Transformation: Moving forward with enterprise resource plan (ERP) to build on SAP platform, welcomed new CIO, concluded transition services agreement with NextEra Energy. ### Stakeholder Engagement: Published third micro sustainability report, contributed over $350K in charitable donations, over 360 employees volunteered over 1,000 hours, and named Best in the U.S. for Corporate Governance for third year.

The Regulated segment had an adjusted gross margin of approximately $118 million this quarter, up 14% from the second quarter of last year. The Unregulated Energy segment had an adjusted gross margin of approximately $25 million, up 7% from the second quarter of last year. The Regulated segment's growth was driven by organic transmission and distribution growth in natural gas distribution operations and increased rates from rate cases. The Unregulated segment's growth was influenced by increased Marlin Virtual Pipeline transportation services and margin from the Full Circle Dairy RNG production facility.

EPS: Reaffirmed full year 2025 EPS guidance of $6.15 to $6.35 per share, which assumes a successful outcome in the Florida City Gas depreciation study. ### Capital Expenditure: Increased full year 2025 capital expenditure guidance to $375M to $425M, with $20M on infrastructure replacement and reliability projects, $10M on Worcester Resiliency Upgrade, $10M for Marlin Virtual Pipeline services, and $10M for Port St. Lucie area. ### 5-Year Plan: Have identified and initiated at least $1.4 billion of a $1.5 billion to $1.8 billion 5-year capital investment plan, with ~70% of investment not needing additional regulatory approval. Will evaluate updates to 5-year capital expenditure guidance as potential projects are explored.

Q: Was the successful outcome in the FCG depreciation study assumed in the $6.25 midpoint guidance for 2025 when originally given?

A: Beth Cooper stated the full guidance range reflects a successful outcome on that filing.

Q: How do you plan to fund the additional CapEx for this year?

A: Beth Cooper mentioned reaching target capital structure at 50%, long-term debt placements opened up revolver capacity, and will continue to pursue capital structure around 50% equity to total capitalization, aligning equity with in-service dates of projects.

Q: When do you anticipate a full refresh of your key guidance next year?

A: Beth Cooper said likely to evaluate and come out with new capital guidance for 2026 in February next year, as they're second year into the guidance out through 2028.

Q: In discussions with anyone regarding projects like hyperscalers in Pennsylvania?

A: Beth Cooper and Jeff Householder said the business development group is constantly looking at projects, but no specific projects to disclose yet, but continue to pursue opportunities like the pipeline to the fuel cell for a data center in Ohio.

Q: Thoughts on greater incoming calls for natural gas service given higher electric prices?

A: Jeff Householder said they're talking to larger commercial and industrial customers across service territory, seeing opportunities to grow business with increased natural gas capabilities.

Q: Schedule in the depreciation case, including third-party consultant report?

A: James F. Moriarty said staff has been supportive, opposed OPC motion to dismiss, expecting staff to make recommendation in September based on review of filing, confident in successful outcome, and no third-party consultant report due next week from the commission