Chesapeake Utilities Q2 Earnings Call Highlights

Chesapeake Utilities raised its full-year 2026 capital guidance by $100 million to a range of $550 million to $600 million. Householder said the increase reflects initial spending on the Florida Energy Pathway, or FEP, as well as higher regulated distribution and infrastructure investment.

Chesapeake announced the FEP project in July. The proposed 97-mile intrastate natural gas transmission line would run from Palm Beach County to Miami-Dade County and is designed to address transmission constraints and increased natural gas demand in South Florida. Householder described FEP as the largest single project in Chesapeake’s history, with total investment expected to be approximately $1.2 billion. Peninsula Pipeline Company, a Chesapeake subsidiary, will construct and operate the line and expects to fund and own at least 51% of the project. The company is discussing arrangements with potential partners that could fund and own up to 49%. The project is expected to enter service in 2030 and has commitments from multiple investment-grade shippers for nearly 250,000 decatherms per day of capacity, according to Householder.

In response to analyst questions, Householder said the partnership structure is intended to maintain a reasonable balance of risk for a project of FEP’s size. He said the company expects to invest roughly $600 million on its portion of the project before revenues begin in 2030. Householder said FEP is regulated by the Florida Public Service Commission because it is an intrastate pipeline project. The company expects permitting to begin in earnest and said the route will largely use public rights of way through three South Florida counties, limiting the need for land acquisition.

The company now expects capital investment to exceed $2.2 billion from 2024 through 2028, up from its prior five-year range. Management plans to provide 2027-2031 capital-expenditure guidance and a 2027-2031 earnings growth rate during its full-year 2026 earnings call in February.

Senior Vice President and Chief Financial Officer Jeff Sylvester said second-quarter adjusted gross margin rose 5% from a year earlier ...