NYSE:NJR New Jersey Resources Q2 2025 Earnings Report $45.49 -0.56 (-1.21%) Closing price 05/22/2025 03:59 PM EasternExtended Trading$45.47 -0.02 (-0.05%) As of 06:08 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast New Jersey Resources EPS ResultsActual EPS$1.76Consensus EPS $1.65Beat/MissBeat by +$0.11One Year Ago EPS$1.41New Jersey Resources Revenue ResultsActual Revenue$913.03 millionExpected Revenue$732.00 millionBeat/MissBeat by +$181.03 millionYoY Revenue Growth+38.80%New Jersey Resources Announcement DetailsQuarterQ2 2025Date5/5/2025TimeAfter Market ClosesConference Call DateTuesday, May 6, 2025Conference Call Time10:00AM ETUpcoming EarningsNew Jersey Resources' Q3 2025 earnings is scheduled for Tuesday, August 5, 2025, with a conference call scheduled at 10:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by New Jersey Resources Q2 2025 Earnings Call TranscriptProvided by QuartrMay 6, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Good morning, everyone. The New Jersey Resources fiscal conference call will begin in approximately ten minutes at ten a. M. Eastern Time. In advance of the call, we want to provide a general set of instructions, which will be repeated at the start of the call. Operator00:00:15For those of you listening on the live call, all participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event will be recorded. The conference call will begin at ten a. M. Operator00:00:29Eastern Time. Thank you. Hello, everyone. My name is Karen. I'll be your conference operator today. Operator00:08:21At this time, I would like to welcome everyone to the New Jersey Resources Fiscal twenty twenty five Second Quarter and First Half Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Adam Prior, Director of Investor Relations. Operator00:08:53Please go ahead. Adam PriorDirector of Investor Relations at New Jersey Resources00:08:56Thank you. Welcome to New Jersey Resources fiscal twenty twenty five second quarter conference call and webcast. I'm joined here today by Steve Westhoven, our President and CEO Roberto Bell, our Senior Vice President and Chief Financial Officer as well as other members of our senior management team. Certain statements in today's call contain estimates and other forward looking statements within the meaning of the securities laws. We wish to caution listeners of this call that the current expectations, assumptions and beliefs forming the basis of our forward looking statements include many factors that are beyond our ability to control or estimate precisely. Adam PriorDirector of Investor Relations at New Jersey Resources00:09:28This could cause results to materially differ from our expectations as found on Slide two. These items can also be found in the forward looking statements section of yesterday's earnings release, furnished on Form eight ks and in our most recent Forms 10 ks Adam PriorDirector of Investor Relations at New Jersey Resources00:09:41and 10 Q as filed with the SEC. Adam PriorDirector of Investor Relations at New Jersey Resources00:09:44We do not, by including this statement, assume any obligation to review or revise any particular forward looking statement referenced herein in light of future events. We will also be referring to certain non GAAP financial measures such as net financial earnings or NFE. We believe that NFE, net financial loss, utility gross margin, financial margin, adjusted funds from operation and adjusted debt provide a more complete understanding of our financial performance. However, these non GAAP measures are not intended to be a substitute for GAAP. Our non GAAP financial measures are discussed more fully in Item seven of our 10 ks. Adam PriorDirector of Investor Relations at New Jersey Resources00:10:17The slides accompanying today's presentation are available on our website and were furnished on our Form eight ks filed yesterday. Steve will begin with this quarter's highlights beginning on Slide four, followed by Roberto, who will review our financial results. Then we will open the call for your questions. With that, I'll turn the Adam PriorDirector of Investor Relations at New Jersey Resources00:10:33call over to our President and CEO, Steve Westhoven. Please go ahead, Steve. Stephen WesthovenCEO & President at New Jersey Resources00:10:37Thanks, Adam, and good morning, everyone. At NJR, we recognize that affordability and reliability remain the foundation of our value proposition to our customers, and our long term strategy reflects that. In today's environment, delivering safe, affordable and reliable energy is more critical than ever. That's why we are focused on disciplined capital deployment, operational excellence and strategic innovation across all of our business segments. Our results this quarter once again demonstrate the strength of this approach. Stephen WesthovenCEO & President at New Jersey Resources00:11:09Fiscal twenty twenty five continues to be a strong year for NJR. In the second quarter, we delivered solid results across all of our business segments. These results reflect the strength of our integrated portfolio and consistent execution by our team to drive long term sustainable growth. In particular, our wholesale gas marketing business NJR Energy Services reported strong performance during the winter by capitalizing on periods of pricing volatility through its long option strategy. As a result of this outperformance, we are raising our fiscal twenty twenty five NFEPS guidance by $0.10 a share to a revised range of $3.15 to $3.3 per share. Stephen WesthovenCEO & President at New Jersey Resources00:11:53Looking at our other subsidiaries, we saw solid execution in the quarter from our entire portfolio of complementary businesses. At New Jersey Natural Gas, we completed the first full quarter of new rates following our base rate case settlement. We also initiated investments under the expanded Save Green program, our largest energy efficiency filing to date, which earns near real time returns. At Clean Energy Ventures, we are advancing our solar portfolio with new projects coming online and building a growing diversified project pipeline. We continue to prioritize disciplined capital deployment and strategic expansion across multiple states. Stephen WesthovenCEO & President at New Jersey Resources00:12:35Our storage and transportation business also continued to make progress. We continued the capacity recovery project at Leaf River and remain engaged in the settlement process for Adelphia Gateway's Section four rate case, which is proceeding as expected. Turning to Slide five for more details on our guidance. We are raising our fiscal twenty twenty five NFEPS guidance range to $3.15 to $3.3 per share, an increase of $0.10 from our prior range. This new outlook reflects our strong operating performance through the winter season for Energy Services and includes the gain from the sale of our residential solar portfolio at Clean Energy Ventures. Stephen WesthovenCEO & President at New Jersey Resources00:13:16Importantly, this revised guidance exceeds our long term NFEPS growth target of 7% to 9%. On Slide six, we present our updated NFEPS guidance by segment. New Jersey Natural Gas remains the largest contributor followed by Clean Energy Ventures and Energy Services. In the second quarter, we slightly narrowed the range of contributions across our business lines, consistent with our practice as the year progresses. These updates reflect outperformance in Energy Services and a modest change in the relative contributions from New Jersey Natural Gas and Clean Energy Ventures. Stephen WesthovenCEO & President at New Jersey Resources00:13:57Now let's discuss our complementary business units, starting with New Jersey Natural Gas on Slide 7. New Jersey Natural Gas continues to deliver consistent customer growth quarter after quarter driven by a healthy mix of new construction activity, system expansions and steady conversions across our service territory. This underscores the ongoing demand for reliable, affordable natural gas service and supports long term investment in our utility infrastructure. We also remain proactive in strengthening the relationship with all of our customers. Throughout the winter season, we regularly shared information on utility assistance programs and focused on maintaining our reputation as a responsive and dependable service provider. Stephen WesthovenCEO & President at New Jersey Resources00:14:42We continue to leverage mechanisms that help manage energy affordability. Most notably, our BGSS incentive programs, which allow us to temporarily release excess capacity or supply when it's not needed. The resulting margin benefits are largely credited to customers, helping to mitigate the impact of higher energy prices. In the last ten years, New Jersey Natural Gas has saved customers nearly $800,000,000 as a result of this program. Alongside these efforts, we remain focused on long term investments that support system reliability, customer growth and New Jersey's clean energy goals. Stephen WesthovenCEO & President at New Jersey Resources00:15:22We've invested two fifty four million dollars at New Jersey Natural Gas this year 46% of that CapEx providing near real time returns. And as I noted earlier, we began making investments under the latest iteration of our Save Green program. These investments assist our customers with affordability, helping them lower their energy usage, reduce emissions and manage bills more effectively, all while delivering timely returns to NJR through a proven regulatory construct. Stephen WesthovenCEO & President at New Jersey Resources00:15:54Moving to Slide eight. Stephen WesthovenCEO & President at New Jersey Resources00:15:55We are consistently placing new projects into service at Clean Energy Ventures, adding 31 megawatts of solar capacity into service this fiscal year. In addition, we are moving projects through our pipeline with 60 megawatts currently under construction. Our project pipeline stands at over one gigawatt with the majority of those investment opportunities located outside of New Jersey. The CEB team was deliberate in their efforts to diversify the project pipeline seeking to avoid an overreliance on any one market or policy regime. This strategy is proving more valuable as the renewable energy industry continues to navigate interconnection and policy related complexities. Stephen WesthovenCEO & President at New Jersey Resources00:16:38Our robust pipeline of capital deployment opportunities combined with a disciplined SREC hedging strategy positions us to continue generating stable predictable cash flows from our solar investments. Moving to Slide nine, storage and transportation continues to deliver steady fee based revenues. At Leaf River, we continued our capacity recovery project restoring capacity that had been impacted by Salt Creek over time. Separately, we are exploring the potential development of a fourth cavern and recently completed a nonbinding open season with encouraging interest as we evaluate the economics and design optimization. At Adelphia Gateway, we continue to advance through the FERC rate case process with settlement discussions ongoing as we move towards achieving resolution and recovering the significant investments we've made to the system. Stephen WesthovenCEO & President at New Jersey Resources00:17:30These assets represent strong long term value proposition, particularly as system constraints highlight the critical role of existing natural gas infrastructure. So with that, I'll turn the call over to Roberto for a review of our financial results. Roberto BelSVP and CFO at New Jersey Resources00:17:46Thank you, Steve, and good morning, everyone. Slide 11 shows the main drivers of our NFE for the second quarter and year to date period of fiscal twenty twenty five. In the second quarter, we reported an NFEPS of $1.78 per share compared with NFEPS of $1.41 per share last year. We saw higher NFE at New Jersey Natural Gas, driven by higher utility gross margin as a result of our recent base rate case settlement. And Storage and Transportation reported improved performance versus the prior year driven by higher revenues at Leaf River. Roberto BelSVP and CFO at New Jersey Resources00:18:24At Clean Energy Ventures, we reported higher NFE for the year to date period, primarily driven by the sale of our residential solar portfolio during our fiscal first quarter. For fiscal twenty twenty five, we expect that the sale of our residential solar assets will generate a net benefit of approximately $0.30 per share, reflecting both the gain on sale and the lack of earnings contribution from that business for the remainder of the year. Now let's move to Slide 12, where we will discuss in Europe's capital plan. For fiscal twenty twenty five and fiscal twenty twenty six, we're planning capital expenditures ranging from 1,300,000,000.0 to $1,600,000,000 which aligns with our long term and ACPS growth target of 7% to 9%. We did not make any changes to our capital plan compared to our prior disclosure and expect spending between $610,000,000 and $790,000,000 in capital investments during fiscal twenty twenty five. Roberto BelSVP and CFO at New Jersey Resources00:19:25These investments align with our long term strategy to enhance utility infrastructure, expand clean energy investments and optimize our storage and transportation capabilities. As highlighted on Slide 13, our strong balance sheet and liquidity position enable us to execute on our strategic priorities while maintaining financial flexibility. Our adjusted funds from operations to adjusted debt ratio is projected to range between 1921% for fiscal twenty twenty five, which reflects our ability to generate solid operating cash flows and manage debt effectively. These levels are consistent with maintaining our investment grade credit rating at NGNG and a strong balance sheet at NGAR. We expect our cash flow from operations to be between $460,000,000 and $500,000,000 in fiscal twenty twenty five, providing a solid foundation for our capital plan, dividends and other corporate needs. Roberto BelSVP and CFO at New Jersey Resources00:20:25With that, I'll turn the call back to Steve for concluding remarks on Slide 14. Stephen WesthovenCEO & President at New Jersey Resources00:20:30Thanks, Roberto. Before we move to Q and A, I'd like to briefly address NJR's positioning in light of the evolving macroeconomic environment, specifically in relation to tariffs. As many of you know, the situation remains fluid. New Jersey Natural Gas is our largest business unit. And because our business activities are domestic, we are largely insulated from the impact of imported goods and materials. Stephen WesthovenCEO & President at New Jersey Resources00:20:55Almost all of our gas supply comes from domestic suppliers, including many of the nation's largest interstate pipelines. Additionally, New Jersey Natural Gas' capital program uses domestically sourced materials such as plastic pipe and infrastructure components, minimizing exposure to current tariffs. At Clean Energy Ventures, we are proactive when it comes to project cost containment. Most of our contracts incorporate structured provisions to preserve returns in the event of cost increases. As a result, we do not expect the uncertainty around tariffs will materially impact our near term investments. Stephen WesthovenCEO & President at New Jersey Resources00:21:30Our solar investment pipeline remains broad and diverse, giving us meaningful flexibility in how and when we deploy capital. It's also important to emphasize that NJR's strong balance sheet continues to support our strategy and is well positioned in any short term market dislocation. We are not reliant on equity issuances to fund our capital plan. We have substantial liquidity and healthy cash flows. And our debt maturity profile is staggered with no term debt due at the holdco level in fiscal twenty twenty five. Stephen WesthovenCEO & President at New Jersey Resources00:22:03To conclude, NJR is poised for sustained long term growth across our diverse portfolio of businesses. Our balanced mix of regulated and non regulated investments continues to support peer leading performance. We raised our initial NFEPS guidance for the fifth consecutive year and our revised range of $3.15 Stephen WesthovenCEO & President at New Jersey Resources00:22:22to $3.3 Stephen WesthovenCEO & President at New Jersey Resources00:22:22per share reflects the strength of our business model and our ability to navigate dynamic market conditions. So with that, let's open up the line for questions. Operator00:22:46Your first question comes from the line of Richard Sunderland of JPMorgan. Please go ahead. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:22:54Hi, good morning and thanks for the time today. Stephen WesthovenCEO & President at New Jersey Resources00:22:57Hey, Richard. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:23:00Starting with the Leaf River expansion, what is the timing of a potential decision to advance that project? Also curious how much capital would that require and what sort of returns you're targeting? Stephen WesthovenCEO & President at New Jersey Resources00:23:12So, you know, we just completed the open season and and evaluating, you know, those bids and doing that at the same exact time as, you know, the cost associated with expansion to really put together the entire transaction. We don't have a finite timeline set right now. You know, we don't have a determined point in which we actually go because you don't know whether you're gonna complete contracts or not. You know, as far as, total capital costs, I'm gonna estimate somewhere between, I don't know, a hundred and 75,000,000 to $200,000,000, you know, total costs. Don't hold me to that, but it'd probably be somewhere, you know, in that area. Stephen WesthovenCEO & President at New Jersey Resources00:23:48And then, you know, as far as returns go, you know, to be in line with what you'd expect were, you know, a midstream, you know, invest. Think that's as far as we'll probably go with that right now. But, yeah, it's it's you know, from the positive side, you know, it's great. You know, market's very supportive team down in that region. It's a great asset. Stephen WesthovenCEO & President at New Jersey Resources00:24:09You know, I think we're in a in a good position, you know, to move forward. We just need to put all these pieces together, to make that capital invest. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:24:19Understood. That that's very helpful. And then I appreciate the tariff commentary. I just wanted to drill in drill in a little bit more for CEV. So at the sort of project level, do you see cost exposure to tariffs, which is then covered by the contractual protections you referenced? Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:24:37I guess I'm just trying to think, how do you see development pace if cost do increase even if your returns are protected? Stephen WesthovenCEO & President at New Jersey Resources00:24:46You know what? It's really too early to say. I mean, such a fluid situation. You know? You know, we put that commentary in place just to kinda give a view of how we're thinking about it and also, know, that we've already thought about, you know, change to this market. Stephen WesthovenCEO & President at New Jersey Resources00:24:58You know, if you remember, you know, we've had tariffs in solar panels. We've had changes in ITC. We've had a number of issues over the past, what, fifteen years that we've been, you know, in this market developing this market. So, you know, safe borrowing provisions, you know, certainly offer us some protection. As you can imagine, if you look at our, you know, capital plan, you know, the construction for many of these facilities is already happening even though their commercial operation isn't going to happen until, you know, fiscal year '20 '20 '6 or 2027. Stephen WesthovenCEO & President at New Jersey Resources00:25:28So these things are done, you know, well in advance, and we're just trying to convey to the market that we thought about this. You know, we've got some protections in place. And, you know, given the fact that, you know, from a state perspective, very high financials, you know, solar's been, you know, one place where, you know, it's been a a a, you know, successful program driving down costs. We've been able to develop we've been able to deploy capital. So we feel for all those reasons, it's a good place to be. Stephen WesthovenCEO & President at New Jersey Resources00:25:57And I think, you know, you know, with, you know, tariffs and, you know, all the other things that could happen, you know, we're trying to prepare ahead of them, but we don't really see any impacts over the next, like, twelve, twenty four months or so. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:26:10Understood. Thanks for the time today. I'll leave it there. Operator00:26:17Your next question comes from the line of Richard Sunderland. Excuse me. Richard, do we have another Richard Sunderland of JPMorgan. Did you have another question, Richard? Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:26:27No, I'm all set. Thank you. Operator00:26:28Okay. I wasn't sure why that popped in. Thank you very much. Sorry about that, ladies and gentlemen. Your next question comes from the line of Jamison Ward of Jefferies. Operator00:26:35Please go ahead. James WardVice President at Jefferies00:26:38Good morning. Stephen WesthovenCEO & President at New Jersey Resources00:26:40Yes. James WardVice President at Jefferies00:26:41Hey, it was great hosting you guys recently in Texas and nicely done on the beaten race. If I could just expand on Richard's Leaf River question here, How should we think about the expected economics in terms of how they compare to your existing caverns and and also just given current storage market dynamics? Stephen WesthovenCEO & President at New Jersey Resources00:27:05Yeah. It's You know, the the way to think about that, you Stephen WesthovenCEO & President at New Jersey Resources00:27:09know, this is something that, Stephen WesthovenCEO & President at New Jersey Resources00:27:10you know, we're only going to build if we get the returns that are appropriate for the, you know, investments that we're making. Right? So what I'm trying to say there is that gotta get the contracts in place. We've gotta be able to lock in, you know, significant portion of, you know, materials and and that clear line of sight and what our construction costs are. And then, you know, have a little bit of an extra in order to, you know, have safety factor through, you know, probably a multiyear cycle of developing out that cavern. Stephen WesthovenCEO & President at New Jersey Resources00:27:41So hoping that gives you a flavor for, you know, how we're thinking about this and the types of returns that we would have to have in order to make all that happen. I don't know if it's comparable to our initial investment because that investment was up and running. It was already contracted. It already done. Was largely largely derisked. Stephen WesthovenCEO & President at New Jersey Resources00:27:58This is a little bit different from that. James WardVice President at Jefferies00:28:03Got you. Okay. Thank you for the color there. I appreciated your comments in the prepared remarks around affordability. Just wanted to also expand on that. James WardVice President at Jefferies00:28:13Just with your core utility business now contributing about 65% to 68 of earnings and after successful November 2024 rate case settlement. Just given the affordability concerns and legislative initiatives highlighted recently in the state, how do you view the regulatory environment over the next twelve to twenty four months and then maybe heading into your next rate case? And are there any specific regulatory mechanisms you're pursuing to further reduce lag between investment and recovery beyond Save Green and IIP? Thank you. Stephen WesthovenCEO & President at New Jersey Resources00:28:46Yeah. Jason, we're we're in a good spot from a regulatory calendar perspective. You know, having completed our rate case and having completed our energy efficiency filing, having that, you know, done, really gives some clear air, you know, for the next, you know, twelve, twenty four, thirty six months, and when our next rate case would come back. There's a lot of legislation that's being put forth right now around affordability. I'd say that, you know, in any year, there's about, you know, 10,000 pieces of legislation that are submitted. Stephen WesthovenCEO & President at New Jersey Resources00:29:18So what's gonna make it through and then what's not, it's hard to say right now. But I can tell you from our perspective as a company, you know, we've been very focused on affordability. We're focused on, making certain that the way that we invest money, has a minimal impact on our customers and everything that we do from hedging programs to VGSS to deploying capital at times. You know, it's really, really conscious around affordability, you know, for our customers. Natural gas is still the cheapest way to to heat your home in the state of New Jersey, and, we don't wanna give up, you know, that positioning willingly. Stephen WesthovenCEO & President at New Jersey Resources00:29:53So we're gonna work on on making certain that we still maintain that position, you know, going forward. James WardVice President at Jefferies00:30:00Got it. Thank you very much. Operator00:30:07Your next question comes from the line of Travis Miller of Morningstar. Please go ahead. Travis MillerAnalyst at Morningstar00:30:13Hi, everyone. Thank you. Two more quick ones on Leaf River. 1, is there any equipment or supplies that you need to order to complete that project if you decide to go forward? Stephen WesthovenCEO & President at New Jersey Resources00:30:31Yeah. I mean, we certainly have to order, you know, compressors to be typing associated with it. You know, a big chunk of the the dollars is, just the, you know, order in and out. And that is there. Sorry. Travis MillerAnalyst at Morningstar00:30:49Yeah. You broke up a little bit there. But, anyway, the so you you do have to order this. Is there risk then you know, the the implication there, is there risk in terms of supply chain or tariffs or anything else in terms of getting what you need to build that? Stephen WesthovenCEO & President at New Jersey Resources00:31:08It's more latest on that right now. You know, we're still working through kind of preliminary signs and things like that, trying to find those up for contracts, you know, so for even an optimistic time frame, you know, those worries, you know, would be out, you multiple months or maybe even here. I think it would take a while to to determine whether this is gonna be impactful and and because the environment's so fluid. You know, it's a it's a brownfield site, so we don't have to order as much. We don't have to put as much infrastructure in place as somebody's building a greenfield site. Stephen WesthovenCEO & President at New Jersey Resources00:31:39You know? So that's certainly, you know, positive to our point. And given the fact that we've already, you know, have the wells in place, you know, for for order, and we've got the brining facilities in place, which is a big part of construction, puts us in an advantage. So so we're in a good place, you know, from that perspective, but too early to tell on, you know, on things of that nature at this point. James WardVice President at Jefferies00:32:00Okay. Perfect. And then higher level question, the utility. You continue to see customer growth over and over and over. What's going on there? James WardVice President at Jefferies00:32:10Right? What are some of the fundamentals where we don't necessarily see that at some other utilities? Is there a business mix change in terms of residential to business or business to residential? What are some of the fundamental shifts you're seeing here in terms of still continuing to get customer growth? Patrick MigliaccioSenior VP & COO of New Jersey Natural Gas at New Jersey Resources00:32:31I'm was Pat Migliaccio. To so to answer your question, there's been no change in in the mix. We are predominantly residential service territory, so 93% residential, 7% commercial. I I would say that, you know, we we have a really attractive service territory, principally Monmouth, Ocean, and Morris Counties, and more room for development, great demographics in terms of some of highest per capita income brackets in the state of New Jersey, and just a great place to live. We hit those all by the short traps. Patrick MigliaccioSenior VP & COO of New Jersey Natural Gas at New Jersey Resources00:33:03So and and on the flip side, though, we are also constantly advocating for ways we can save customers money, and that's through our same green energy efficiency program, largest ever in in the state. But that really provides customers an opportunity to conduct an energy out of their home and figure out a way to make them warranty efficient for those homes that have already been constructed. So hope that answers your question, but, you know, we we do believe that we continue to see fantastic customer growth. Travis MillerAnalyst at Morningstar00:33:32Yeah. Oh, okay. Very good. Well, we'll see all of you soon. Travis MillerAnalyst at Morningstar00:33:36Thanks. Operator00:33:37Our Operator00:33:44next question comes from Robert Moskow of Mizuho Securities. Please go ahead. Robert MoscaEquity Research Associate at Mizuho Financial Group00:33:50Hi, good morning everyone. One from I think there was maybe an updated draft to the proposed Energy Master Plan a little bit after your 1Q update. Just wondering if there's anything in particular you're focused on during the common period and anything that might change just given some of the recent affordability legislation proposed in New Jersey? Kind of open ended question, but curious to get your thoughts there. Stephen WesthovenCEO & President at New Jersey Resources00:34:20Thanks, Rob. So there was a presentation that was put forth on the energy master plan, but there was not a whole draft document of the energy master plan issue. They did allow for a comment period, which we did submit comments on. I'm not sure what the, you know, follow-up will be on that. Just as a reminder, Stephen WesthovenCEO & President at New Jersey Resources00:34:39we are gonna go through Stephen WesthovenCEO & President at New Jersey Resources00:34:40a gubernatorial election this November, so you're gonna change the administration. I fully expect that a new administration, you know, this fall will be drafting probably a new energy answer plan. So I think as far as you're concerned, it's a it's a staging moment to see, you know, how this plays out over the next, year or so and see what the new administration's focus and goals are. Robert MoscaEquity Research Associate at Mizuho Financial Group00:35:03Got it. Appreciate the time. Stephen WesthovenCEO & President at New Jersey Resources00:35:05Alright. Thanks. Operator00:35:08This concludes our Q and A section. I will now turn the call back over to Adam Prior for closing remarks. Please go ahead. Adam PriorDirector of Investor Relations at New Jersey Resources00:35:16You very much. I'd like to thank you all for joining us. Adam PriorDirector of Investor Relations at New Jersey Resources00:35:19We look forward to seeing many of Adam PriorDirector of Investor Relations at New Jersey Resources00:35:20you at AGA later this month. Adam PriorDirector of Investor Relations at New Jersey Resources00:35:22And as always, we appreciate your interest and investment in NJR. Great day.Read moreParticipantsExecutivesAdam PriorDirector of Investor RelationsStephen WesthovenCEO & PresidentRoberto BelSVP and CFOPatrick MigliaccioSenior VP & COO of New Jersey Natural GasAnalystsRichard SunderlandEquity Research - North American Utilities & Power at JP MorganJames WardVice President at JefferiesTravis MillerAnalyst at MorningstarRobert MoscaEquity Research Associate at Mizuho Financial GroupPowered by Key Takeaways Management raised fiscal 2025 NFEPS guidance by $0.10 to a range of $3.15–$3.30 per share, exceeding its long-term growth target. The Energy Services segment delivered strong winter performance by capitalizing on pricing volatility through a long‐option strategy, driving upward guidance revisions. New Jersey Natural Gas reported ongoing customer growth and initiated its expanded Save Green energy-efficiency program, which delivers near real-time returns. Clean Energy Ventures placed 31 MW of solar in service, has 60 MW under construction, and maintains a diversified pipeline exceeding 1 GW, largely outside New Jersey. The Storage & Transportation business advanced its Leaf River capacity recovery project, is evaluating a fourth cavern expansion, and is engaged in the Adelphia Gateway rate case settlement process. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallNew Jersey Resources Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) New Jersey Resources Earnings HeadlinesNew Jersey Resources (NYSE:NJR) Stock Rating Upgraded by StockNews.comMay 16, 2025 | americanbankingnews.comNew Jersey Resources Corp (NJR) Q2 2025 Earnings Call Highlights: Strong Financial Performance ...May 7, 2025 | finance.yahoo.comThe Trump Dump is starting; Get out of stocks now?The first 365 days of the Trump presidency… Will be the best time to get rich in American history.May 23, 2025 | Paradigm Press (Ad)Does New Jersey Resources (NYSE:NJR) Deserve A Spot On Your Watchlist?May 6, 2025 | finance.yahoo.comNew jersey resources raises 2025 nfep guidance to $3.15-$3.30 per shareMay 6, 2025 | msn.comNew Jersey Resources’ Positive Earnings Call Highlights GrowthMay 6, 2025 | tipranks.comSee More New Jersey Resources Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like New Jersey Resources? Sign up for Earnings360's daily newsletter to receive timely earnings updates on New Jersey Resources and other key companies, straight to your email. Email Address About New Jersey ResourcesNew Jersey Resources (NYSE:NJR), an energy services holding company, distributes natural gas. The company operates through four segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services, and Storage and Transportation. The Natural Gas Distribution segment offers regulated natural gas utility services to approximately 576,000 customers in Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey; provides capacity and storage management services; and participates in the off-system sales and capacity release markets. The Clean Energy Ventures segment invests in, owns, and operates clean energy projects, including commercial and residential solar installation situated in New Jersey, Rhode Island, New York, Connecticut, Michigan, and Indiana. The Energy Services segment maintains and operates natural gas transportation and storage capacity contracts, as well as provides physical wholesale energy, retail energy and energy management services in the United States and Canada. The Storage and Transportation segment invests in invests in energy-related ventures. It provides heating, ventilation, and cooling services; sales and installation of appliances; offers solar equipment installation, and plumbing repair and installation services; and holds commercial real estate properties. 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PresentationSkip to Participants Operator00:00:00Good morning, everyone. The New Jersey Resources fiscal conference call will begin in approximately ten minutes at ten a. M. Eastern Time. In advance of the call, we want to provide a general set of instructions, which will be repeated at the start of the call. Operator00:00:15For those of you listening on the live call, all participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event will be recorded. The conference call will begin at ten a. M. Operator00:00:29Eastern Time. Thank you. Hello, everyone. My name is Karen. I'll be your conference operator today. Operator00:08:21At this time, I would like to welcome everyone to the New Jersey Resources Fiscal twenty twenty five Second Quarter and First Half Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Adam Prior, Director of Investor Relations. Operator00:08:53Please go ahead. Adam PriorDirector of Investor Relations at New Jersey Resources00:08:56Thank you. Welcome to New Jersey Resources fiscal twenty twenty five second quarter conference call and webcast. I'm joined here today by Steve Westhoven, our President and CEO Roberto Bell, our Senior Vice President and Chief Financial Officer as well as other members of our senior management team. Certain statements in today's call contain estimates and other forward looking statements within the meaning of the securities laws. We wish to caution listeners of this call that the current expectations, assumptions and beliefs forming the basis of our forward looking statements include many factors that are beyond our ability to control or estimate precisely. Adam PriorDirector of Investor Relations at New Jersey Resources00:09:28This could cause results to materially differ from our expectations as found on Slide two. These items can also be found in the forward looking statements section of yesterday's earnings release, furnished on Form eight ks and in our most recent Forms 10 ks Adam PriorDirector of Investor Relations at New Jersey Resources00:09:41and 10 Q as filed with the SEC. Adam PriorDirector of Investor Relations at New Jersey Resources00:09:44We do not, by including this statement, assume any obligation to review or revise any particular forward looking statement referenced herein in light of future events. We will also be referring to certain non GAAP financial measures such as net financial earnings or NFE. We believe that NFE, net financial loss, utility gross margin, financial margin, adjusted funds from operation and adjusted debt provide a more complete understanding of our financial performance. However, these non GAAP measures are not intended to be a substitute for GAAP. Our non GAAP financial measures are discussed more fully in Item seven of our 10 ks. Adam PriorDirector of Investor Relations at New Jersey Resources00:10:17The slides accompanying today's presentation are available on our website and were furnished on our Form eight ks filed yesterday. Steve will begin with this quarter's highlights beginning on Slide four, followed by Roberto, who will review our financial results. Then we will open the call for your questions. With that, I'll turn the Adam PriorDirector of Investor Relations at New Jersey Resources00:10:33call over to our President and CEO, Steve Westhoven. Please go ahead, Steve. Stephen WesthovenCEO & President at New Jersey Resources00:10:37Thanks, Adam, and good morning, everyone. At NJR, we recognize that affordability and reliability remain the foundation of our value proposition to our customers, and our long term strategy reflects that. In today's environment, delivering safe, affordable and reliable energy is more critical than ever. That's why we are focused on disciplined capital deployment, operational excellence and strategic innovation across all of our business segments. Our results this quarter once again demonstrate the strength of this approach. Stephen WesthovenCEO & President at New Jersey Resources00:11:09Fiscal twenty twenty five continues to be a strong year for NJR. In the second quarter, we delivered solid results across all of our business segments. These results reflect the strength of our integrated portfolio and consistent execution by our team to drive long term sustainable growth. In particular, our wholesale gas marketing business NJR Energy Services reported strong performance during the winter by capitalizing on periods of pricing volatility through its long option strategy. As a result of this outperformance, we are raising our fiscal twenty twenty five NFEPS guidance by $0.10 a share to a revised range of $3.15 to $3.3 per share. Stephen WesthovenCEO & President at New Jersey Resources00:11:53Looking at our other subsidiaries, we saw solid execution in the quarter from our entire portfolio of complementary businesses. At New Jersey Natural Gas, we completed the first full quarter of new rates following our base rate case settlement. We also initiated investments under the expanded Save Green program, our largest energy efficiency filing to date, which earns near real time returns. At Clean Energy Ventures, we are advancing our solar portfolio with new projects coming online and building a growing diversified project pipeline. We continue to prioritize disciplined capital deployment and strategic expansion across multiple states. Stephen WesthovenCEO & President at New Jersey Resources00:12:35Our storage and transportation business also continued to make progress. We continued the capacity recovery project at Leaf River and remain engaged in the settlement process for Adelphia Gateway's Section four rate case, which is proceeding as expected. Turning to Slide five for more details on our guidance. We are raising our fiscal twenty twenty five NFEPS guidance range to $3.15 to $3.3 per share, an increase of $0.10 from our prior range. This new outlook reflects our strong operating performance through the winter season for Energy Services and includes the gain from the sale of our residential solar portfolio at Clean Energy Ventures. Stephen WesthovenCEO & President at New Jersey Resources00:13:16Importantly, this revised guidance exceeds our long term NFEPS growth target of 7% to 9%. On Slide six, we present our updated NFEPS guidance by segment. New Jersey Natural Gas remains the largest contributor followed by Clean Energy Ventures and Energy Services. In the second quarter, we slightly narrowed the range of contributions across our business lines, consistent with our practice as the year progresses. These updates reflect outperformance in Energy Services and a modest change in the relative contributions from New Jersey Natural Gas and Clean Energy Ventures. Stephen WesthovenCEO & President at New Jersey Resources00:13:57Now let's discuss our complementary business units, starting with New Jersey Natural Gas on Slide 7. New Jersey Natural Gas continues to deliver consistent customer growth quarter after quarter driven by a healthy mix of new construction activity, system expansions and steady conversions across our service territory. This underscores the ongoing demand for reliable, affordable natural gas service and supports long term investment in our utility infrastructure. We also remain proactive in strengthening the relationship with all of our customers. Throughout the winter season, we regularly shared information on utility assistance programs and focused on maintaining our reputation as a responsive and dependable service provider. Stephen WesthovenCEO & President at New Jersey Resources00:14:42We continue to leverage mechanisms that help manage energy affordability. Most notably, our BGSS incentive programs, which allow us to temporarily release excess capacity or supply when it's not needed. The resulting margin benefits are largely credited to customers, helping to mitigate the impact of higher energy prices. In the last ten years, New Jersey Natural Gas has saved customers nearly $800,000,000 as a result of this program. Alongside these efforts, we remain focused on long term investments that support system reliability, customer growth and New Jersey's clean energy goals. Stephen WesthovenCEO & President at New Jersey Resources00:15:22We've invested two fifty four million dollars at New Jersey Natural Gas this year 46% of that CapEx providing near real time returns. And as I noted earlier, we began making investments under the latest iteration of our Save Green program. These investments assist our customers with affordability, helping them lower their energy usage, reduce emissions and manage bills more effectively, all while delivering timely returns to NJR through a proven regulatory construct. Stephen WesthovenCEO & President at New Jersey Resources00:15:54Moving to Slide eight. Stephen WesthovenCEO & President at New Jersey Resources00:15:55We are consistently placing new projects into service at Clean Energy Ventures, adding 31 megawatts of solar capacity into service this fiscal year. In addition, we are moving projects through our pipeline with 60 megawatts currently under construction. Our project pipeline stands at over one gigawatt with the majority of those investment opportunities located outside of New Jersey. The CEB team was deliberate in their efforts to diversify the project pipeline seeking to avoid an overreliance on any one market or policy regime. This strategy is proving more valuable as the renewable energy industry continues to navigate interconnection and policy related complexities. Stephen WesthovenCEO & President at New Jersey Resources00:16:38Our robust pipeline of capital deployment opportunities combined with a disciplined SREC hedging strategy positions us to continue generating stable predictable cash flows from our solar investments. Moving to Slide nine, storage and transportation continues to deliver steady fee based revenues. At Leaf River, we continued our capacity recovery project restoring capacity that had been impacted by Salt Creek over time. Separately, we are exploring the potential development of a fourth cavern and recently completed a nonbinding open season with encouraging interest as we evaluate the economics and design optimization. At Adelphia Gateway, we continue to advance through the FERC rate case process with settlement discussions ongoing as we move towards achieving resolution and recovering the significant investments we've made to the system. Stephen WesthovenCEO & President at New Jersey Resources00:17:30These assets represent strong long term value proposition, particularly as system constraints highlight the critical role of existing natural gas infrastructure. So with that, I'll turn the call over to Roberto for a review of our financial results. Roberto BelSVP and CFO at New Jersey Resources00:17:46Thank you, Steve, and good morning, everyone. Slide 11 shows the main drivers of our NFE for the second quarter and year to date period of fiscal twenty twenty five. In the second quarter, we reported an NFEPS of $1.78 per share compared with NFEPS of $1.41 per share last year. We saw higher NFE at New Jersey Natural Gas, driven by higher utility gross margin as a result of our recent base rate case settlement. And Storage and Transportation reported improved performance versus the prior year driven by higher revenues at Leaf River. Roberto BelSVP and CFO at New Jersey Resources00:18:24At Clean Energy Ventures, we reported higher NFE for the year to date period, primarily driven by the sale of our residential solar portfolio during our fiscal first quarter. For fiscal twenty twenty five, we expect that the sale of our residential solar assets will generate a net benefit of approximately $0.30 per share, reflecting both the gain on sale and the lack of earnings contribution from that business for the remainder of the year. Now let's move to Slide 12, where we will discuss in Europe's capital plan. For fiscal twenty twenty five and fiscal twenty twenty six, we're planning capital expenditures ranging from 1,300,000,000.0 to $1,600,000,000 which aligns with our long term and ACPS growth target of 7% to 9%. We did not make any changes to our capital plan compared to our prior disclosure and expect spending between $610,000,000 and $790,000,000 in capital investments during fiscal twenty twenty five. Roberto BelSVP and CFO at New Jersey Resources00:19:25These investments align with our long term strategy to enhance utility infrastructure, expand clean energy investments and optimize our storage and transportation capabilities. As highlighted on Slide 13, our strong balance sheet and liquidity position enable us to execute on our strategic priorities while maintaining financial flexibility. Our adjusted funds from operations to adjusted debt ratio is projected to range between 1921% for fiscal twenty twenty five, which reflects our ability to generate solid operating cash flows and manage debt effectively. These levels are consistent with maintaining our investment grade credit rating at NGNG and a strong balance sheet at NGAR. We expect our cash flow from operations to be between $460,000,000 and $500,000,000 in fiscal twenty twenty five, providing a solid foundation for our capital plan, dividends and other corporate needs. Roberto BelSVP and CFO at New Jersey Resources00:20:25With that, I'll turn the call back to Steve for concluding remarks on Slide 14. Stephen WesthovenCEO & President at New Jersey Resources00:20:30Thanks, Roberto. Before we move to Q and A, I'd like to briefly address NJR's positioning in light of the evolving macroeconomic environment, specifically in relation to tariffs. As many of you know, the situation remains fluid. New Jersey Natural Gas is our largest business unit. And because our business activities are domestic, we are largely insulated from the impact of imported goods and materials. Stephen WesthovenCEO & President at New Jersey Resources00:20:55Almost all of our gas supply comes from domestic suppliers, including many of the nation's largest interstate pipelines. Additionally, New Jersey Natural Gas' capital program uses domestically sourced materials such as plastic pipe and infrastructure components, minimizing exposure to current tariffs. At Clean Energy Ventures, we are proactive when it comes to project cost containment. Most of our contracts incorporate structured provisions to preserve returns in the event of cost increases. As a result, we do not expect the uncertainty around tariffs will materially impact our near term investments. Stephen WesthovenCEO & President at New Jersey Resources00:21:30Our solar investment pipeline remains broad and diverse, giving us meaningful flexibility in how and when we deploy capital. It's also important to emphasize that NJR's strong balance sheet continues to support our strategy and is well positioned in any short term market dislocation. We are not reliant on equity issuances to fund our capital plan. We have substantial liquidity and healthy cash flows. And our debt maturity profile is staggered with no term debt due at the holdco level in fiscal twenty twenty five. Stephen WesthovenCEO & President at New Jersey Resources00:22:03To conclude, NJR is poised for sustained long term growth across our diverse portfolio of businesses. Our balanced mix of regulated and non regulated investments continues to support peer leading performance. We raised our initial NFEPS guidance for the fifth consecutive year and our revised range of $3.15 Stephen WesthovenCEO & President at New Jersey Resources00:22:22to $3.3 Stephen WesthovenCEO & President at New Jersey Resources00:22:22per share reflects the strength of our business model and our ability to navigate dynamic market conditions. So with that, let's open up the line for questions. Operator00:22:46Your first question comes from the line of Richard Sunderland of JPMorgan. Please go ahead. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:22:54Hi, good morning and thanks for the time today. Stephen WesthovenCEO & President at New Jersey Resources00:22:57Hey, Richard. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:23:00Starting with the Leaf River expansion, what is the timing of a potential decision to advance that project? Also curious how much capital would that require and what sort of returns you're targeting? Stephen WesthovenCEO & President at New Jersey Resources00:23:12So, you know, we just completed the open season and and evaluating, you know, those bids and doing that at the same exact time as, you know, the cost associated with expansion to really put together the entire transaction. We don't have a finite timeline set right now. You know, we don't have a determined point in which we actually go because you don't know whether you're gonna complete contracts or not. You know, as far as, total capital costs, I'm gonna estimate somewhere between, I don't know, a hundred and 75,000,000 to $200,000,000, you know, total costs. Don't hold me to that, but it'd probably be somewhere, you know, in that area. Stephen WesthovenCEO & President at New Jersey Resources00:23:48And then, you know, as far as returns go, you know, to be in line with what you'd expect were, you know, a midstream, you know, invest. Think that's as far as we'll probably go with that right now. But, yeah, it's it's you know, from the positive side, you know, it's great. You know, market's very supportive team down in that region. It's a great asset. Stephen WesthovenCEO & President at New Jersey Resources00:24:09You know, I think we're in a in a good position, you know, to move forward. We just need to put all these pieces together, to make that capital invest. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:24:19Understood. That that's very helpful. And then I appreciate the tariff commentary. I just wanted to drill in drill in a little bit more for CEV. So at the sort of project level, do you see cost exposure to tariffs, which is then covered by the contractual protections you referenced? Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:24:37I guess I'm just trying to think, how do you see development pace if cost do increase even if your returns are protected? Stephen WesthovenCEO & President at New Jersey Resources00:24:46You know what? It's really too early to say. I mean, such a fluid situation. You know? You know, we put that commentary in place just to kinda give a view of how we're thinking about it and also, know, that we've already thought about, you know, change to this market. Stephen WesthovenCEO & President at New Jersey Resources00:24:58You know, if you remember, you know, we've had tariffs in solar panels. We've had changes in ITC. We've had a number of issues over the past, what, fifteen years that we've been, you know, in this market developing this market. So, you know, safe borrowing provisions, you know, certainly offer us some protection. As you can imagine, if you look at our, you know, capital plan, you know, the construction for many of these facilities is already happening even though their commercial operation isn't going to happen until, you know, fiscal year '20 '20 '6 or 2027. Stephen WesthovenCEO & President at New Jersey Resources00:25:28So these things are done, you know, well in advance, and we're just trying to convey to the market that we thought about this. You know, we've got some protections in place. And, you know, given the fact that, you know, from a state perspective, very high financials, you know, solar's been, you know, one place where, you know, it's been a a a, you know, successful program driving down costs. We've been able to develop we've been able to deploy capital. So we feel for all those reasons, it's a good place to be. Stephen WesthovenCEO & President at New Jersey Resources00:25:57And I think, you know, you know, with, you know, tariffs and, you know, all the other things that could happen, you know, we're trying to prepare ahead of them, but we don't really see any impacts over the next, like, twelve, twenty four months or so. Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:26:10Understood. Thanks for the time today. I'll leave it there. Operator00:26:17Your next question comes from the line of Richard Sunderland. Excuse me. Richard, do we have another Richard Sunderland of JPMorgan. Did you have another question, Richard? Richard SunderlandEquity Research - North American Utilities & Power at JP Morgan00:26:27No, I'm all set. Thank you. Operator00:26:28Okay. I wasn't sure why that popped in. Thank you very much. Sorry about that, ladies and gentlemen. Your next question comes from the line of Jamison Ward of Jefferies. Operator00:26:35Please go ahead. James WardVice President at Jefferies00:26:38Good morning. Stephen WesthovenCEO & President at New Jersey Resources00:26:40Yes. James WardVice President at Jefferies00:26:41Hey, it was great hosting you guys recently in Texas and nicely done on the beaten race. If I could just expand on Richard's Leaf River question here, How should we think about the expected economics in terms of how they compare to your existing caverns and and also just given current storage market dynamics? Stephen WesthovenCEO & President at New Jersey Resources00:27:05Yeah. It's You know, the the way to think about that, you Stephen WesthovenCEO & President at New Jersey Resources00:27:09know, this is something that, Stephen WesthovenCEO & President at New Jersey Resources00:27:10you know, we're only going to build if we get the returns that are appropriate for the, you know, investments that we're making. Right? So what I'm trying to say there is that gotta get the contracts in place. We've gotta be able to lock in, you know, significant portion of, you know, materials and and that clear line of sight and what our construction costs are. And then, you know, have a little bit of an extra in order to, you know, have safety factor through, you know, probably a multiyear cycle of developing out that cavern. Stephen WesthovenCEO & President at New Jersey Resources00:27:41So hoping that gives you a flavor for, you know, how we're thinking about this and the types of returns that we would have to have in order to make all that happen. I don't know if it's comparable to our initial investment because that investment was up and running. It was already contracted. It already done. Was largely largely derisked. Stephen WesthovenCEO & President at New Jersey Resources00:27:58This is a little bit different from that. James WardVice President at Jefferies00:28:03Got you. Okay. Thank you for the color there. I appreciated your comments in the prepared remarks around affordability. Just wanted to also expand on that. James WardVice President at Jefferies00:28:13Just with your core utility business now contributing about 65% to 68 of earnings and after successful November 2024 rate case settlement. Just given the affordability concerns and legislative initiatives highlighted recently in the state, how do you view the regulatory environment over the next twelve to twenty four months and then maybe heading into your next rate case? And are there any specific regulatory mechanisms you're pursuing to further reduce lag between investment and recovery beyond Save Green and IIP? Thank you. Stephen WesthovenCEO & President at New Jersey Resources00:28:46Yeah. Jason, we're we're in a good spot from a regulatory calendar perspective. You know, having completed our rate case and having completed our energy efficiency filing, having that, you know, done, really gives some clear air, you know, for the next, you know, twelve, twenty four, thirty six months, and when our next rate case would come back. There's a lot of legislation that's being put forth right now around affordability. I'd say that, you know, in any year, there's about, you know, 10,000 pieces of legislation that are submitted. Stephen WesthovenCEO & President at New Jersey Resources00:29:18So what's gonna make it through and then what's not, it's hard to say right now. But I can tell you from our perspective as a company, you know, we've been very focused on affordability. We're focused on, making certain that the way that we invest money, has a minimal impact on our customers and everything that we do from hedging programs to VGSS to deploying capital at times. You know, it's really, really conscious around affordability, you know, for our customers. Natural gas is still the cheapest way to to heat your home in the state of New Jersey, and, we don't wanna give up, you know, that positioning willingly. Stephen WesthovenCEO & President at New Jersey Resources00:29:53So we're gonna work on on making certain that we still maintain that position, you know, going forward. James WardVice President at Jefferies00:30:00Got it. Thank you very much. Operator00:30:07Your next question comes from the line of Travis Miller of Morningstar. Please go ahead. Travis MillerAnalyst at Morningstar00:30:13Hi, everyone. Thank you. Two more quick ones on Leaf River. 1, is there any equipment or supplies that you need to order to complete that project if you decide to go forward? Stephen WesthovenCEO & President at New Jersey Resources00:30:31Yeah. I mean, we certainly have to order, you know, compressors to be typing associated with it. You know, a big chunk of the the dollars is, just the, you know, order in and out. And that is there. Sorry. Travis MillerAnalyst at Morningstar00:30:49Yeah. You broke up a little bit there. But, anyway, the so you you do have to order this. Is there risk then you know, the the implication there, is there risk in terms of supply chain or tariffs or anything else in terms of getting what you need to build that? Stephen WesthovenCEO & President at New Jersey Resources00:31:08It's more latest on that right now. You know, we're still working through kind of preliminary signs and things like that, trying to find those up for contracts, you know, so for even an optimistic time frame, you know, those worries, you know, would be out, you multiple months or maybe even here. I think it would take a while to to determine whether this is gonna be impactful and and because the environment's so fluid. You know, it's a it's a brownfield site, so we don't have to order as much. We don't have to put as much infrastructure in place as somebody's building a greenfield site. Stephen WesthovenCEO & President at New Jersey Resources00:31:39You know? So that's certainly, you know, positive to our point. And given the fact that we've already, you know, have the wells in place, you know, for for order, and we've got the brining facilities in place, which is a big part of construction, puts us in an advantage. So so we're in a good place, you know, from that perspective, but too early to tell on, you know, on things of that nature at this point. James WardVice President at Jefferies00:32:00Okay. Perfect. And then higher level question, the utility. You continue to see customer growth over and over and over. What's going on there? James WardVice President at Jefferies00:32:10Right? What are some of the fundamentals where we don't necessarily see that at some other utilities? Is there a business mix change in terms of residential to business or business to residential? What are some of the fundamental shifts you're seeing here in terms of still continuing to get customer growth? Patrick MigliaccioSenior VP & COO of New Jersey Natural Gas at New Jersey Resources00:32:31I'm was Pat Migliaccio. To so to answer your question, there's been no change in in the mix. We are predominantly residential service territory, so 93% residential, 7% commercial. I I would say that, you know, we we have a really attractive service territory, principally Monmouth, Ocean, and Morris Counties, and more room for development, great demographics in terms of some of highest per capita income brackets in the state of New Jersey, and just a great place to live. We hit those all by the short traps. Patrick MigliaccioSenior VP & COO of New Jersey Natural Gas at New Jersey Resources00:33:03So and and on the flip side, though, we are also constantly advocating for ways we can save customers money, and that's through our same green energy efficiency program, largest ever in in the state. But that really provides customers an opportunity to conduct an energy out of their home and figure out a way to make them warranty efficient for those homes that have already been constructed. So hope that answers your question, but, you know, we we do believe that we continue to see fantastic customer growth. Travis MillerAnalyst at Morningstar00:33:32Yeah. Oh, okay. Very good. Well, we'll see all of you soon. Travis MillerAnalyst at Morningstar00:33:36Thanks. Operator00:33:37Our Operator00:33:44next question comes from Robert Moskow of Mizuho Securities. Please go ahead. Robert MoscaEquity Research Associate at Mizuho Financial Group00:33:50Hi, good morning everyone. One from I think there was maybe an updated draft to the proposed Energy Master Plan a little bit after your 1Q update. Just wondering if there's anything in particular you're focused on during the common period and anything that might change just given some of the recent affordability legislation proposed in New Jersey? Kind of open ended question, but curious to get your thoughts there. Stephen WesthovenCEO & President at New Jersey Resources00:34:20Thanks, Rob. So there was a presentation that was put forth on the energy master plan, but there was not a whole draft document of the energy master plan issue. They did allow for a comment period, which we did submit comments on. I'm not sure what the, you know, follow-up will be on that. Just as a reminder, Stephen WesthovenCEO & President at New Jersey Resources00:34:39we are gonna go through Stephen WesthovenCEO & President at New Jersey Resources00:34:40a gubernatorial election this November, so you're gonna change the administration. I fully expect that a new administration, you know, this fall will be drafting probably a new energy answer plan. So I think as far as you're concerned, it's a it's a staging moment to see, you know, how this plays out over the next, year or so and see what the new administration's focus and goals are. Robert MoscaEquity Research Associate at Mizuho Financial Group00:35:03Got it. Appreciate the time. Stephen WesthovenCEO & President at New Jersey Resources00:35:05Alright. Thanks. Operator00:35:08This concludes our Q and A section. I will now turn the call back over to Adam Prior for closing remarks. Please go ahead. Adam PriorDirector of Investor Relations at New Jersey Resources00:35:16You very much. I'd like to thank you all for joining us. Adam PriorDirector of Investor Relations at New Jersey Resources00:35:19We look forward to seeing many of Adam PriorDirector of Investor Relations at New Jersey Resources00:35:20you at AGA later this month. Adam PriorDirector of Investor Relations at New Jersey Resources00:35:22And as always, we appreciate your interest and investment in NJR. Great day.Read moreParticipantsExecutivesAdam PriorDirector of Investor RelationsStephen WesthovenCEO & PresidentRoberto BelSVP and CFOPatrick MigliaccioSenior VP & COO of New Jersey Natural GasAnalystsRichard SunderlandEquity Research - North American Utilities & Power at JP MorganJames WardVice President at JefferiesTravis MillerAnalyst at MorningstarRobert MoscaEquity Research Associate at Mizuho Financial GroupPowered by