Northwest Natural Holding Co Q4 FY2024 earnings call

• Celebrated 160th anniversary of the company in 2024. - Evolved from one utility to four strong businesses serving nearly one million customers across seven states. - 2024 adjusted earnings were at the upper end of the guidance range due to offsetting regulatory lag from capital investments and inflation. - Completed the largest Oregon gas utility rate case in history and several water and wastewater utility rate cases. - Northwest Natural customers pay less for natural gas service than 20 years ago. - Water and wastewater customer base grew 4.6% in 2024. - Two renewable natural gas facilities with EDL went into operation. - Acquired C Energy, a high-growth natural gas utility in Texas, which closed in January. - Successfully completed an Oregon general rate case in October 2024 with new rates effective November 1. - Gas system provided significant energy during cold weather in January 2024, helping avoid rolling blackouts. - Filed a new Oregon general rate case in December 2024 seeking a $59.4 million revenue requirement increase.

The segment reporting includes the Natural Gas Distribution (NGD) segment and other. The Natural Gas Distribution segment had a utility margin increase of $26.3 million mainly due to new rates in Oregon. Gas utility O&M decreased $2.1 million excluding regulatory disallowance. Utility depreciation and general taxes increased $12.1 million due to additional capital investments. Other includes interstate storage services, asset management services, Northwest Natural Water, Northwest Natural Renewables, and holding company expenses. The Natural Gas Distribution segment's financials were impacted by regulatory changes and capital investments, while other segments contributed through various services and growth.

• Initiated 2025 adjusted earnings guidance in the range of $2.75 per share to $2.95 per share. - 2025 consolidated capital expenditures expected to be in the range of $450 million to $500 million, with consolidated CapEx through 2030 increased to $2.5 billion to $2.7 billion (nearly 40% increase from previous trajectory). - Projecting 2% to 2.5% customer growth from 2025, largely driven by C Energy's 20% or higher growth and a backlog of nearly 190,000 connections under contract. - Expecting equity issuances in the range of $65 million to $75 million in 2025.

• Regulatory changes, including changes in laws, legislation, or regulations that could impact operations. - Weather events that may affect natural gas system performance. - Pipeline constraints in certain regions. - Tariff impacts, such as those related to data centers and energy capital imports.

Q: Thoughts on Washington data centers and how electric load growth might impact the business?

A: Justin Palfreyman discussed evaluating potential connections of data centers to the system, analyzing system impacts and pipeline constraints in the Pacific Northwest. Also mentioned monitoring tariff situations in Washington and being engaged with policymakers on the hill.

Q: Can you unpack the CapEx by gas, C Energy, and water?

A: Raymond Kaszuba stated that for Northwest Natural gas company, CapEx is in the ballpark of $350 million, for C Energy it's in the $80 million range, and for water it's in the $60 million range for 2025 consolidated CapEx.