Chesapeake Utilities Corporation (NYSE:CPK) Q4 2022 Earnings Call Transcript

Beth Cooper: So in regards to the overall business, when you look at just investment in Florida overall, and I can get you more specific numbers, Brian. But Florida is about 45% of our total investment as a company. And when you look at it on a regulated, it’s about a 50-50 split. And that includes all regulated investments throughout the company. So Florida is a very big piece of our regulated portfolio. It’s actually the largest single by itself state in which we operate and are regulated. And so this — as you know, this whole rate case initiative that we went in to consolidate all of our various businesses was very significant. It was also significant in that we had not been in since prior to the SPU rate case. Your second question, which was around Maryland, our requirement to come back in Maryland as early 2024. So we’ll be preparing and get you ready for that this year.

Brian Russo: Okay. Great. And yes, just on the RNG opportunities. Is it fair to say that you now have platforms for growth, both in Delmarva and in Northern Florida to kind of grow off. And when I look at the project large project margin contribution. It seems — it’s only about $1 million or so of incremental margin through 2024. So I was just curious, are we going to see more contribution in 2025, maybe as these projects that have been announced kind of maybe ramp up in terms of scale and margin contribution.

Beth Cooper: Currently, the plan is — we’re anticipating that full circle will come on about halfway through 2024. And so the full benefit of that particular project, the full year impact that you would see would be in 2025. In the case of Planet Found, as we had indicated on that particular project, there’s some scaling up that we’re looking to do in that facility right now. They’re taking the gas, so to speak, it’s being generated out of the facility that’s being used to generate electricity. And so we’re looking at some opportunities to actually transfer that to — or actually process it to be pipeline quality natural gas, a small part of that. And there’s also some potential opportunities to expand beyond that. But again, Brian, we haven’t said a lot of that into motion yet.

So I think realistically, you’re talking 2025 or beyond for that. There could be some other projects, as Jeff indicated, that we announced. But again, they take several years from the time that you start, you get all of the permits, et cetera, and you actually can construct the facility. Stuff. I don’t know if you want to add anything.

Jeff Householder: No, I think that’s well said. One of the things that we are looking at, as you guys may have been looking at this as well, are the ERANs. And while the federal program that supported the credits for renewable attributes so the green attributes coming out of these projects that were originally directed toward vehicles and Ford displacing gasoline and diesel emission issues that appears to be expanding into electricity. And so some of the projects that were on our list to convert to renewable gas, pipeline quality gas, as Beth mentioned, and move into a pipeline, potentially, you could see them as electric generation projects with a cogeneration or some other generation at site and still be eligible for a fairly significant credits.

And so that’s beginning to change the view of many of us that are looking at these renewable energy projects and thinking about the economics of trying to introduce the green attributes into a pathway to market into California and to other states that have opportunities to pay us for delivering those green attributes as opposed to keeping them hold and generating renewable electricity from them. So it’s an interesting shift and one that we’re just starting to evaluate as well. It actually opens up a number of very interesting possibilities for us, especially some of these smaller scale projects.