NiSource(US:NI)2022-08-03 21:51Financial Data and Key Metrics Changes - NiSource reported non-GAAP diluted net operating earnings per share (NOEPS) of $0.12 for Q2 2022, a slight decrease from $0.13 in Q2 2021 [12][23] - The company reaffirmed its 2022 guidance of $1.42 to $1.48 diluted non-GAAP NOEPS and a compound annual growth rate of 7% to 9% from 2021 through 2024 [10][92] Business Line Data and Key Metrics Changes - Gas distribution operating earnings for Q2 2022 were approximately $81 million, an increase of about $15 million compared to the same quarter last year [24] - Electric segment non-GAAP operating earnings for Q2 were about $73 million, which is about $11 million lower than the same quarter last year [25] Market Data and Key Metrics Changes - The company experienced a revenue increase of $72 million annually from the NIPSCO gas rate case, effective September 2022 and March 2023 [14] - Columbia Gas of Ohio requested a revenue increase of $221 million, while Columbia Gas of Pennsylvania sought an additional $82.2 million for infrastructure upgrades [15] Company Strategy and Development Direction - NiSource is focused on safety and operational excellence while pursuing growth and sustainability [8] - The company plans to invest approximately $10 billion from 2021 to 2024, with about $2 billion allocated for renewable projects primarily between 2022 and 2024 [19] - A strategic review is ongoing to explore internal and external opportunities to maximize shareholder value, with results expected to be shared at an Investor Day in November [12][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting the 2022 guidance despite challenges such as delays in solar projects and inflationary pressures [66][92] - The pause on solar panel tariffs has provided clarity on project timelines, although original timelines for renewable generation projects remain unchanged [9][10] Other Important Information - NiSource's debt level as of June 30, 2022, was about $10.1 billion, with a weighted average interest rate of approximately 3.7% [26] - The company successfully executed its first green bond issuance, a 30-year bond at 5%, intended for wind project purchases [29] Q&A Session Summary Question: Can you discuss the impact of the pause on tariffs and growth opportunities? - Management indicated that they are pulling forward capital investments to mitigate the impact of solar project delays and are confident in their growth plan [34][36] Question: How is the strategic review process progressing? - The review involves benchmarking against robust stand-alone plans and exploring operational efficiencies while assessing demand for local distribution companies (LDCs) [39][40] Question: What are the implications of the Inflation Reduction Act? - Management noted no near-term material impact from the act, but they will analyze long-term effects on renewables and energy efficiency [42][43] Question: How is the company managing industrial demand trends? - There has been some weakness in industrial sales, particularly in the steel industry, but overall electric revenues are supported by residential and commercial growth [64][65] Question: What is the status of the NIPSCO base rate filing? - The company anticipates filing a rate case before the end of the year to incorporate completed projects into the rate structure [69] Question: How are customers affected by higher commodity costs? - Customers are already seeing higher commodity prices reflected in their bills, with a year-over-year increase of about 19% to 20% [72] Question: What is the status of in-flight renewable projects? - The company is receiving solar panels for ongoing projects and is finalizing commercial negotiations for additional projects [75][76] Question: What is the state of settlement discussions in Pennsylvania? - Discussions have been constructive, focusing on customer value and support for modernization programs [83]