NiSource(US:NI)2021-11-03 18:28Financial Data and Key Metrics Changes - The company updated its 2021 guidance to target the top end of the range of $1.32 to $1.36 per share in non-GAAP diluted net operating earnings per share (NOEPS) [8][24] - For 2022, the company initiated guidance of $1.42 to $1.48 per share, consistent with a 5% to 7% near-term growth commitment [9][24] - Non-GAAP diluted NOEPS for Q3 2021 was $0.11, compared to $0.09 in Q3 2020, reflecting ongoing execution of infrastructure investments [11][25] Business Line Data and Key Metrics Changes - Gas Distribution operating earnings for Q3 2021 were approximately $18 million, an increase of about $8 million compared to the previous year [26] - Electric segment operating earnings for Q3 2021 were about $130 million, nearly $3 million lower than Q3 2020, with operating revenues decreasing slightly due to lower residential usage [27] Market Data and Key Metrics Changes - The Columbia Gas of Ohio rate case is progressing, with a request for an annual revenue increase of approximately $221 million pending a decision next year [12] - NIPSCO filed a gas rate case requesting a revenue increase of $115 million annually, focused on infrastructure modernization [12][13] Company Strategy and Development Direction - The company is committed to safety, reliability, customer affordability, and sustainability, with plans to reduce greenhouse gas emissions by 90% by 2030 [7][10] - Investments of up to $750 million will be required to replace retiring coal-fired generation, with a focus on transitioning to lower-cost, clean, and reliable generation [10][19] - The company plans to invest approximately $2 billion in renewable generation by 2023 to replace retiring capacity [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 7% to 9% compound annual growth in diluted net operating earnings per share through 2024, driven by core infrastructure programs and renewable generation investments [6][9] - The company is optimistic about the regulatory execution and expects favorable outcomes from pending rate cases in multiple states [11][75] Other Important Information - The company has narrowed its 2021 capital investment estimate to approximately $2 billion and reiterated its 2022 capital forecast of $2.4 to $2.7 billion [31] - All three major rating agencies reaffirmed the company's investment-grade credit ratings with stable outlooks [29] Q&A Session Summary Question: Inquiry about the IRP and investment guardrails - Management indicated that the range of potential investments will be informed by the actual projects selected and the efficiency of their construction [34][36] Question: Impact of federal policy on financing plans - Management noted that direct pay could provide additional flexibility in financing renewable investments, potentially reducing equity needs [37][39] Question: Dividend policy and future growth trends - The company maintains a 60% to 70% payout ratio target and expects to see growth in dividends aligned with earnings growth [45][46] Question: Clarification on 2023 EPS growth base - Management advised using the top end of the 2021 guidance as the base for 2023 EPS growth projections [51] Question: Timing and relationship between IRP and TDSIC - Management clarified that TDSIC focuses on existing transmission assets and does not directly relate to new generation or retiring generation [62] Question: Thoughts on methane emissions and capex plans - Management acknowledged opportunities to improve emissions profiles and emphasized the importance of the EPA methane rule over proposed legislation [65][66] Question: Factors underlying the higher earnings outlook - Management highlighted modernization investments and the impact of pending rate cases as key factors supporting the improved earnings outlook [73][75]