Spire(US:SR)2022-08-06 13:34Financial Data and Key Metrics Changes - Consolidated net economic earnings for Q3 2022 were $4.1 million, or $0.01 per share, down $2.8 million, or $0.05 from the previous year [30] - Gas utilities earned just over $4 million, a decrease of $8 million from the prior year [30] - Operation and maintenance expenses net of pension re-class were lower by $5 million, or 4%, driven by lower employee-related costs [33] - Interest expense increased due to higher debt levels and short-term interest rates [34] Business Line Data and Key Metrics Changes - Gas Marketing posted earnings of $400,000 compared to a loss in the previous year, benefiting from price volatility in the market [32] - The shift in the cadence of recovery from the Missouri rate case reduced earnings by approximately $6 million in Q3 [31] Market Data and Key Metrics Changes - The company is monitoring gas costs and has a significant hedge position to mitigate impacts from market volatility [55] - The market is currently showing persistently high prices, but there are indications of future mitigation [55] Company Strategy and Development Direction - The company is focused on environmental sustainability and enhancing customer experience, aiming to reduce gas utility methane emissions by 59% by 2025 and 73% by 2035 compared to 2005 levels [17][18] - A five-year capital plan through 2026 remains at $3.1 billion, with over 98% allocated to utilities, supporting infrastructure upgrades and technology investments [29] Management's Comments on Operating Environment and Future Outlook - Management remains confident in long-term growth prospects, targeting 5% to 7% earnings growth per share [35] - The company anticipates growth to accelerate next year with a reasonable outcome in the Missouri rate case [35] Other Important Information - The company is evaluating renewable energy resources, including renewable natural gas (RNG) and hydrogen, to support long-term carbon neutrality commitments [18] - A multiyear agreement was completed to purchase responsibly sourced gas from Ascent Resources [21] Q&A Session All Questions and Answers Question: Expectations for the remainder of '22 results and guidance range - Management confirmed that guidance remains unchanged, driven by utility performance, with expectations for the fourth quarter reflecting typical seasonal losses [45][46] Question: Impact of higher interest rates and hedges - The company has a significant hedge position locked in at lower rates, which should help mitigate the impact of higher interest rates [47][48] Question: Timeline for PSC rulemaking process regarding RNG - The rulemaking process is expected to extend into 2023, but it will not hinder the development of RNG opportunities [54] Question: Bill outlook for the next heating season - The company has a significant hedge position and is monitoring gas costs, expecting manageable bill impacts despite current high prices [55][56] Question: Updates on regulatory milestones in Alabama - No specific updates were available, but the company is working on new budgets and forward expectations for Alabama and Gulf [60][61] Question: CapEx for storage expansion and timeline - There is currently nothing in the plan for storage expansion, and the timeline for any future plans will be updated in the year-end earnings call [62]