NEW JERSEY RESOURCES CORP
For the period ended Mar 31, 2024. Filed May 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 7, 2024
NJR$54.34-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-06.
0000356309-24-000027
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0000356309-24-000032
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNatural Gas Distribution SegmentClean Energy Ventures SegmentEnergy Services SegmentStorage and Transportation SegmentHome Services and Other Business OperationsLiquidity and Capital ResourcesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 289 previous paragraphs and 316 current paragraphs.
202 unchanged; 74 reworded; 34 added; 12 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 24 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
Consolidated net income increased approximately $10.6M during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, due primarily to the following factors:
Current report
•$6.4M increase in earnings at NJNG due to increased revenues resulting from an increase in customers and higher BGSS incentives; and
Current report
•$3.8M increase in earnings at CEV related to the recognition of ITCs associated with solar sale leaseback financing transactions.
Current report
Consolidated net income decreased approximately $15.9M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, due primarily to the following factors:
Current report
The primary drivers of the changes noted above are described in more detail in the individual reporting segment and other business operations discussions.
Current report
•142.9M increase in receivables primarily at NJNG; and
Current report
•$28.0M increase in nonutility plant and equipment, net at CEV and S&T; partially offset by
Current report
•$118.5M decrease in gas in storage at NJNG and ES;
Current report
•$49.7M decrease in noncurrent regulatory assets due primarily to the remeasurement of the Company's other postretirement benefits at NJNG; and
Current report
Consolidated NFE increased approximately $26.3M during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, due primarily to the following factors:
Current report
•$16.5M increase at ES due to higher Financial Margin resulting from periods of cold weather during January 2024;
Current report
•$6.4M increase in earnings at NJNG; and
Current report
•$3.8M increase in earnings at CEV, as previously discussed.
Current report
Consolidated NFE decreased approximately $11.6M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, due primarily to the following factors:
Current report
•$17.9M increase in earnings at CEV, as previously discussed.
Current report
On March 28, 2024, NJNG submitted its annual IIP filing to the BPU requesting a rate increase for capital expenditures of $43.5M through June 30, 2024, which will result in a $5.6M revenue increase, with a proposed effective date of October 1, 2024.
Current report
Net income increased approximately $6.4M during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, due primarily to the following factors:
Current report
•$2.8M increase in other income, net due primarily to the remeasurement of the Company's other postretirement benefits along with increased AFUDC equity; partially offset by
Current report
Net income increased approximately $3.2M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, due primarily to the following factors:
Current report
•$2.9M increase in other income, net; partially offset by
Current report
Net loss decreased approximately $3.8M during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, due primarily to the following factors:
Current report
•$7.7M increase in other income, net due primarily to the recognition of ITCs associated with solar sale leaseback financing transactions; partially offset by
Current report
•$5.1M decrease in operating revenues due to lower SREC sales.
Current report
Net income increased approximately $17.9M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, due primarily to the following factors:
Current report
•$9.7M increase in other income, net due primarily to the recognition of ITCs associated with solar sale leaseback financing transactions; partially offset by
Current report
Net income decreased approximately $2.0M during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, due primarily to the following factors:
Current report
Net income decreased approximately $42.6M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, due primarily to the following factors:
Current report
Net income remained relatively consistent during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, and decreased approximately $3.2M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, respectively, due primarily to the following factors:
Current report
•$5.4M increase in O&M due to increased compensation costs and contractor expenses; partially offset by
Current report
•$1.7M increase in other income, net due to increased interest income from the outstanding loan with Steckman Ridge, as a result of higher interest rates.
Current report
Management uses NFE, a non-GAAP financial measure, when evaluating the operating results of S&T. Certain transactions associated with equity method investments and their impact, including impairment charges, which are non-cash charges, and the return of capital in excess of the carrying value of our investment, are excluded for NFE purposes. The details of such adjustments can be found in the table below. Non-GAAP financial measures are not in accordance with, or an alternative to GAAP, and should be considered in addition to, and not as a substitute for the comparable GAAP measure.
Current report
NFE remained relatively consistent during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, and decreased approximately $3.1M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, respectively, due primarily to a decrease in net income, as previously discussed.
Current report
Cash flows from operating activities decreased approximately $4.5M during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, due primarily to a decrease in cash received to date from certain ES AMAs along with changes in the mix of working capital components.
Removed paragraphs (12)
Previous report
Consolidated net income decreased $26.5M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to the following factors:
Previous report
•$72.9M increase in accounts receivable at NJNG and ES; and
Previous report
•$72.8M increase in unbilled revenue primarily at NJNG due to the seasonality of their business; partially offset by
Previous report
Consolidated NFE decreased $37.8M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to the following factors:
Previous report
•$14.1M increase in earnings at CEV due to increased SREC sales, as previously discussed.
Previous report
NJNG expects its new customer annual growth rate to be approximately 1.9%. Based on information from municipalities and developers, as well as external industry analysts and management's experience, NJNG estimates that approximately 69% of the growth will come from new construction markets and 31% from customer conversions to natural gas from other fuel sources. This new customer and conversion growth would increase Utility Gross Margin under NJNG's base rates by approximately $8.5M annually, as calculated under NJNG's CIP tariff.
Previous report
Net income decreased $3.2M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to the following factors:
Previous report
Net income (loss) increased approximately $14.1M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to the following factors:
Previous report
•$2.5M increase in O&M due to higher project maintenance expenses and lease expenses; and
Previous report
Net income decreased approximately $40.6M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to the following factors:
Previous report
Net income decreased approximately $2.6M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to a decrease in hub services revenue at Leaf River.
Previous report
Cash flows from operating activities increased approximately $135.3M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to decreased working capital requirements resulting from lower natural gas prices.
Reworded paragraphs (74)
Previous wording
•$40.6M decrease in earnings at ES due to higher volatility in natural gas prices related to Winter Storm Elliott in December 2022 along with the related hedging transactions; partially offset by
Current wording
•$42.6M decrease in earnings at ES due to a period of higher volatility in natural gas prices related to Winter Storm Elliott in December 2022 that did not reoccur; partially offset by
Previous wording
•$14.1M increase in earnings at CEV due to increased SREC sales.
Current wording
•$17.9M increase in earnings at CEV due to higher SREC and TREC sales and an increase in the recognition of ITCs associated with solar sale leaseback financing transactions.
Previous wording
Consolidated assets increased $211.6M as of December 31, 2023, compared with September 30, 2023, due primarily to the following factors:
Current wording
Consolidated assets increased approximately $109.9M as of March 31, 2024, compared with September 30, 2023, due primarily to the following factors:
Previous wording
•$84.5M increase in utility plant expenditures at NJNG; and
Current wording
•$115.5M increase in utility plant expenditures, net at NJNG;
Previous wording
•$20.2M decrease in prepaid taxes primarily at NJNG.
Current wording
•$24.7M decrease in prepaid taxes at NJNG and HSO.
Previous wording
•$53.6M decrease in Financial Margin at ES due to higher volatility in natural gas prices in the prior year, as previously discussed; partially offset by
Current wording
•$28.2M decrease at ES due to higher volatility in natural gas prices in the prior year, as previously discussed; partially offset by
Previous wording
Natural Gas Distribution is comprised of NJNG, a natural gas utility that provides regulated natural gas service throughout Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey to approximately 579,600 residential and commercial customers in its service territory and also participates in the off-system sales and capacity release markets. The business is subject to various risks, which may include but are not limited to impacts to customer growth and customer usage, customer collections, the timing and costs of capital expenditures and construction of infrastructure projects, operating and financing costs, fluctuations in commodity prices and customer conservation efforts. In addition, NJNG may be subject to adverse economic conditions such as inflation and rising natural gas costs, certain regulatory actions, environmental remediation and severe weather conditions. It is often difficult to predict the impact of events or trends associated with these risks.
Current wording
Natural Gas Distribution is comprised of NJNG, a natural gas utility that provides regulated natural gas service throughout Burlington, Middlesex, Monmouth, Morris, Ocean, and Sussex counties in New Jersey to approximately 581,600 residential and commercial customers in its service territory and also participates in the off-system sales and capacity release markets. The business is subject to various risks, which may include but are not limited to impacts to customer growth and customer usage, customer collections, the timing and costs of capital expenditures and construction of infrastructure projects, operating and financing costs, fluctuations in commodity prices and customer conservation efforts. In addition, NJNG may be subject to adverse economic conditions such as inflation and rising natural gas costs, certain regulatory actions, environmental remediation and severe weather conditions. It is often difficult to predict the impact of events or trends associated with these risks.
Previous wording
On January 31, 2024, NJNG filed a base rate case with the BPU requesting a natural gas revenue increase of $222.6M including a rate recovery of infrastructure investments and a change in the Company’s overall rate of return on rate base to 7.57%.
Current wording
On January 31, 2024, NJNG filed a base rate case with the BPU requesting a natural gas revenue increase of $222.6M including a recovery of infrastructure investments, a change in the Company’s overall rate of return on rate base to 7.57% and a change in the return on common equity to 10.42%.
Previous wording
NJNG has significant annual capital expenditures associated with the management of its natural gas distribution and transmission system, including new utility plant expenditures associated with customer growth and its associated pipeline integrity management and infrastructure programs. Below is a summary of NJNG’s capital expenditures, including accruals, for the three months ended December 31, 2023, and estimates of expected investments for fiscal 2024 and 2025:
Current wording
NJNG has significant annual capital expenditures associated with the management of its natural gas distribution and transmission system, including new utility plant expenditures associated with customer growth and its associated pipeline integrity management and infrastructure programs. Below is a summary of NJNG’s capital expenditures, including accruals, for the six months ended March 31, 2024, and estimates of expected investments for fiscal 2024 and 2025:
Previous wording
During the three months ended December 31, 2023 and 2022, NJNG added 2,129 and 2,132 new customers, respectively. NJNG expects new customer additions, and those customers who added additional natural gas services to their premises to contribute approximately $1.9M of incremental Utility Gross Margin on an annualized basis.
Current wording
During the six months ended March 31, 2024 and 2023, NJNG added 4,058 and 4,064 new customers, respectively. NJNG expects new customer additions, and those customers who added additional natural gas services to their premises to contribute approximately $3.4M of incremental Utility Gross Margin on an annualized basis.
Previous wording
In September 2023, the BPU approved an increase to the EE rate for the SAVEGREEN programs established from 2010 through the present, which increased annual recoveries by $9.0M, effective October 1, 2023.
Current wording
In September 2023, the BPU approved an increase to the energy efficiency rate for the SAVEGREEN programs established from 2010 through the present, which increased annual recoveries by $9.0M, effective October 1, 2023.
Previous wording
On November 9, 2023, NJNG filed a letter of petition seeking BPU approval to extend NJNG’s current SAVEGREEN program through December 31, 2024, with an additional $76.9M in order to meet customer demand for this program.
Current wording
On November 9, 2023, NJNG filed a letter of petition seeking BPU approval to extend NJNG’s current SAVEGREEN program through December 31, 2024, with an additional $76.9M in order to meet customer demand for this program, which was approved by the BPU on April 30, 2024.
Previous wording
On December 1, 2023, NJNG filed a petition seeking BPU approval of its 2024 SAVEGREEN program, which would support new energy efficiency, demand response and building decarbonization start-up programs for two and a half-years starting January 1, 2025 through June 30, 2027. The 2024 SAVEGREEN program, which totals $482.4M, includes $245.1M of direct investment, $217.2M in financing options and $20.1M in O&M.
Current wording
On December 1, 2023, NJNG filed a petition seeking BPU approval of its 2024 SAVEGREEN program, which would support new energy efficiency, demand response and building decarbonization start-up programs for two and a half-years starting January 1, 2025 through June 30, 2027. The 2024 SAVEGREEN program filing, which totals $482.4M, includes $245.1M of direct investment, $217.2M in financing options and $20.1M in O&M.
Previous wording
Program recoveries from customers during the three months ended December 31, 2023 and 2022, were $4.4M and $2.5M, respectively. The recovery includes a weighted average cost of capital that ranges from 6.84% to 6.9%, with a return on equity of 9.6% to 9.75%.
Current wording
Program recoveries from customers during the six months ended March 31, 2024 and 2023, were $15.1M and $8.5M, respectively. The recovery includes a weighted average cost of capital that ranges from 6.84% to 6.9%, with a return on equity of 9.6% to 9.75%.
Previous wording
(1)Compared with the 20-year average, weather was 8.2% warmer-than-normal during the three months ended December 31, 2023 and 0.3% warmer-than-normal during the three months ended December 31, 2022.
Current wording
(1)Compared with the 20-year average, weather was 12.4% and 10.8% warmer-than-normal during the three and six months ended March 31, 2024 and 21.2% and 13.1% warmer-than-normal during the three and six months ended March 31, 2023.
Previous wording
In April 2023, the BPU approved on a final basis, NJNG’s February 2023 filing for a reduction to the BGSS rate, which reduced recoveries by approximately $29.9M, effective March 1, 2023. NJNG’s February 2023 filing also advised the BPU of a bill credit for residential and small commercial customers. Total bill credits given back to customers from March 2023 through May 2023, totaled approximately $32.4M.
Current wording
In April 2023, the BPU approved on a final basis, NJNG’s February 2023 filing for a reduction to the BGSS rate, which reduced annual recoveries by approximately $29.9M, effective March 1, 2023. NJNG’s February 2023 filing also advised the BPU of a bill credit for residential and small commercial customers. Total bill credits given back to customers from March 2023 through May 2023, totaled approximately $32.4M.
Previous wording
In September 2023, the BPU approved, on a provisional basis, NJNG's annual BGSS filing to decrease the annual revenues credited to BGSS by approximately $38.6M, a $7.4M annual decrease related to its balancing charge, and a $27.0M increase to CIP rates, effective October 1, 2023. The balancing charge rate includes the cost of balancing natural gas deliveries with customer usage for sales and transportation customers, and balancing charge revenues are credited to BGSS.
Current wording
In September 2023, the BPU approved, on a provisional basis, NJNG's annual BGSS filing to decrease the annual revenues credited to BGSS by approximately $38.6M, a $7.4M annual decrease related to its balancing charge, and a $27.0M increase to CIP rates, effective October 1, 2023, which was approved on a final basis by the BPU on April 30, 2024. The balancing charge rate includes the cost of balancing natural gas deliveries with customer usage for sales and transportation customers, and balancing charge revenues are credited to BGSS.
Previous wording
NJNG is eligible to receive financial incentives for reducing BGSS costs through a series of Utility Gross Margin-sharing programs that include off-system sales, capacity release and storage incentive programs. These programs are designed to encourage better utilization and hedging of NJNG’s natural gas supply, transportation and storage assets. Depending on the program, NJNG shares 80 or 85% of Utility Gross Margin generated by these programs with firm customers. Utility Gross Margin from incentive programs was approximately $5.4M and $8.7M during the three months ended December 31, 2023 and 2022, respectively.
Current wording
NJNG is eligible to receive financial incentives for reducing BGSS costs through a series of Utility Gross Margin-sharing programs that include off-system sales, capacity release and storage incentive programs. These programs are designed to encourage better utilization and hedging of NJNG’s natural gas supply, transportation and storage assets. Depending on the program, NJNG shares 80 or 85% of Utility Gross Margin generated by these programs with firm customers. Utility Gross Margin from incentive programs was approximately $7.9M and $5.8M during the three months ended March 31, 2024 and 2023, respectively, and $13.3M and $14.5M during the six months ended March 31, 2024 and 2023, respectively.
Previous wording
The maximum price per MMBtu was $3.52 and $30.95 and the minimum price was $0.89 and $0.67 for the three months ended December 31, 2023 and 2022, respectively. A more detailed discussion of the impacts of the price of natural gas on operating revenues, natural gas purchases and cash flows can be found in the Operating Resultsand Cash Flow sections of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Current wording
The maximum price per MMBtu was $20.98 and $32.46 and the minimum price was $0.89 and $0.67 for the six months ended March 31, 2024 and 2023, respectively. A more detailed discussion of the impacts of the price of natural gas on operating revenues, natural gas purchases and cash flows can be found in the Operating Resultsand Cash Flow sections of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Previous wording
In April 2023, the BPU approved on a final basis, NJNG's annual SBC filing, which included an increase to the RAC annual recoveries of approximately $3.7M and a decrease to the NJCEP annual recoveries of approximately $0.9M, effective May 1, 2023.
Current wording
In April 2023, the BPU approved, NJNG's annual SBC filing, which included an increase to the RAC annual recoveries of approximately $3.7M and a decrease to the NJCEP annual recoveries of approximately $0.9M, effective May 1, 2023.
Previous wording
In September 2023, NJNG submitted its annual SBC filing to the BPU requesting approval of RAC expenditures through June 2023, as well as an increase to the RAC annual recoveries of approximately $2.4M and an increase to the NJCEP annual recoveries of approximately $5.0M, which would be effective April 1, 2024.
Current wording
On March 20, 2024, the BPU approved NJNG's annual SBC filing of RAC expenditures through June 30, 2023, which included an increase to the RAC annual recoveries of approximately $2.4M and an increase to the NJCEP annual recoveries of approximately $5.5M, effective April 1, 2024.
Previous wording
NJNG is responsible for the environmental remediation of former MGP sites, which contain contaminated residues from former gas manufacturing operations that ceased operating at these sites by the mid-1950s and, in some cases, had been discontinued many years earlier. Actual MGP remediation costs may vary from management’s estimates due to the developing nature of remediation requirements, regulatory decisions by the NJDEP and related litigation. NJNG reviews these costs at the end of each fiscal year and adjusts its liability and corresponding regulatory asset as necessary to reflect its expected future remediation obligation. Accordingly, NJNG recognized a regulatory asset and an obligation of $165.3M as of December 31, 2023, a decrease of $4.1M compared with the prior fiscal period. See Note 13. Commitments and Contingent Liabilities for more details.
Current wording
NJNG is responsible for the environmental remediation of former MGP sites, which contain contaminated residues from former gas manufacturing operations that ceased operating at these sites by the mid-1950s and, in some cases, had been discontinued many years earlier. Actual MGP remediation costs may vary from management’s estimates due to the developing nature of remediation requirements, regulatory decisions by the NJDEP and related litigation. NJNG reviews these costs at the end of each fiscal year and adjusts its liability and corresponding regulatory asset as necessary to reflect its expected future remediation obligation. Accordingly, NJNG recognized a regulatory asset and an obligation of $157.8M as of March 31, 2024, a decrease of $11.6M compared with the prior fiscal period. See Note 13. Commitments and Contingent Liabilities for more details.
Previous wording
(1)Includes nonutility revenue of approximately $0.3M for both the three months ended December 31, 2023 and 2022, for lease agreements with various NJR subsidiaries leasing office space from NJNG at the Company’s headquarters, which are eliminated in consolidation.
Current wording
(1)Includes nonutility revenue of approximately $0.3M and $0.7M for both the three and six months ended March 31, 2024 and 2023, for lease agreements with various NJR subsidiaries leasing office space from NJNG at the Company’s headquarters, which are eliminated in consolidation.
Previous wording
(3)Includes related party transactions of approximately $2.3M for both the three months ended December 31, 2023 and 2022, a portion of which is eliminated in consolidation.
Current wording
(3)Includes related party transactions of approximately $2.3M for both the three months ended March 31, 2024 and 2023, and $4.7M and $4.6M for the six months ended March 31, 2024 and 2023, respectively, a portion of which is eliminated in consolidation.
Previous wording
Operating revenues decreased 18.0% and natural gas purchases decreased 35.9% during the three months ended December 31, 2023, compared with the three months ended December 31, 2022.
Current wording
Operating revenues increased 15.6% and natural gas purchases increased 30.2% during the three months ended March 31, 2024, compared with the three months ended March 31, 2023. Operating revenues decreased 0.3% and natural gas purchases decreased 5.3% during the six months ended March 31, 2024, compared with the six months ended March 31, 2023.
Previous wording
(1)Excludes SG&A of approximately $28.3M and $23.4M for the three months ended December 31, 2023 and 2022, respectively.
Current wording
(1)Excludes SG&A of approximately $30.0M and $27.8M for the three months ended March 31, 2024 and 2023, respectively, and $58.9M and $51.2M for the six months ended March 31, 2024 and 2023, respectively.
Previous wording
Utility firm gross margin increased approximately $4.4M during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, due primarily to increased residential customers.
Current wording
Utility firm gross margin increased approximately $6.1M and $10.5M during the three and six months ended March 31, 2024, compared with the three and six months ended March 31, 2023, due primarily to increased residential customers.
Previous wording
BGSS incentive programs decreased during the three months ended December 31, 2023, compared with the three months ended December 31, 2022, was due primarily to decreased margins from off-system sales due to lower, less volatile natural gas prices and a lack of market opportunities.
Current wording
BGSS incentive programs increased during the three months ended March 31, 2024, compared with the three months ended March 31, 2023, due primarily to increased margins from off-system sales due to increased market volatility during periods of cold weather during January 2024. BGSS incentive programs decreased during the six months ended March 31, 2024, compared with the six months ended March 31, 2023, due primarily to decreased margins from storage due to reduced market volatility and off-system sales due to less volatile natural gas prices related to Winter Storm Elliott in December 2022 that did not reoccur.
Previous wording
•$1.1M increase in Utility Gross Margin, as previously discussed; and
Current wording
•$8.3M increase in Utility Gross Margin, as previously discussed; and
Previous wording
•$2.0M increase in depreciation expense as a result of additional utility plant being placed into service; partially offset by
Current wording
•$2.1M increase in depreciation expense as a result of additional utility plant being placed into service; and
Previous wording
•$5.0M increase in O&M due to higher employee related expenses and information technology costs;
Current wording
•$1.1M increase in O&M due to higher employee related expenses and information technology costs.
Previous wording
CEV has approximately 472.5 MW of solar capacity in service. Projects that were placed in service through December 31, 2019, qualified for a 30% federal ITC. The credit declined to 26% for property under construction during 2020 through the end of 2022. In August 2022, the federal ITC was restored to 30% through the end of 2032. There are additional opportunities to increase the credit amount for certain facilities that are placed in service after December 31, 2022, based upon the type of project and location.
Current wording
CEV has approximately 473.5 MW of solar capacity in service. Projects that were placed in service through December 31, 2019, qualified for a 30% federal ITC. The credit declined to 26% for property under construction during 2020 through the end of 2022. In August 2022, the federal ITC was restored to 30% through the end of 2032. There are additional opportunities to increase the credit amount for certain facilities that are placed in service after December 31, 2022, based upon the type of project and location.
Previous wording
CEV may enter into transactions to sell certain of its commercial solar assets concurrent with agreements to lease the assets back over a period of five to 15 years. The Company will continue to operate the solar assets and are responsible for related expenses and entitled to retain the revenue generated from RECs and energy sales. The ITCs and other tax benefits associated with these solar projects transfer to the buyer if applicable; however, the lease payments are structured so that CEV is compensated for the transfer of the related tax incentives. Accordingly, for solar projects financed under sale leasebacks for which the assets were sold during the first 5 years of in-service life, CEV recognizes the equivalent value of the ITC in other income on the Unaudited Condensed Consolidated Statements of Operations over the respective five-year ITC recapture periods, starting with the second year of the lease. CEV received proceeds of approximately $24.4M and $33.2M during the three months ended December 31, 2023 and 2022, respectively, in connection with sale leasebacks of commercial solar assets.
Current wording
CEV may enter into transactions to sell certain of its commercial solar assets concurrent with agreements to lease the assets back over a period of five to 15 years. The Company will continue to operate the solar assets and are responsible for related expenses and entitled to retain the revenue generated from RECs and energy sales. The ITCs and other tax benefits associated with these solar projects transfer to the buyer if applicable; however, the lease payments are structured so that CEV is compensated for the transfer of the related tax incentives. Accordingly, for solar projects financed under sale leasebacks for which the assets were sold during the first 5 years of in-service life, CEV recognizes the equivalent value of the ITC in other income on the Unaudited Condensed Consolidated Statements of Operations over the respective five-year ITC recapture periods, starting with the second year of the lease. CEV received proceeds of approximately $28.7M during the three months ended March 31, 2023, and $24.4M and $61.8M during the six months ended March 31, 2024 and 2023, respectively, in connection with sale leasebacks of commercial solar assets. There were no proceeds received during the three months ended March 31, 2024.
Previous wording
In December 2022, the BPU established the Competitive Solar Incentive Program, which will provide incentives to larger solar facilities. It is open to qualifying grid supply solar facilities, non-residential net metered solar installations with a capacity greater than 5MW, and eligible grid supply solar facilities installed in combination with energy storage.
Current wording
In December 2022, the BPU established the Competitive Solar Incentive Program, which provides incentives to larger solar facilities. It is open to qualifying grid supply solar facilities, non-residential net metered solar installations with a capacity greater than 5MW, and eligible grid supply solar facilities installed in combination with energy storage. Pricing is determined based on a competitive bid solicitation process.
Previous wording
REC activity during the three months ended, consisted of the following:
Current wording
REC activity during the six months ended, consisted of the following:
Previous wording
(1)The TRECs’ and SREC IIs’ inventory balance is due to the timing of when the RECs are delivered to the state administrator related to their generation.
Current wording
(1)TREC and SREC II inventory balances are due primarily to the timing of generation and when RECs are delivered to state administrator.
Previous wording
•$22.5M increase in operating revenues due to higher SREC sales; partially offset by
Current wording
•$17.4M increase in operating revenues due to higher SREC and TREC sales; and
Previous wording
•$5.0M increase in income tax expense.
Current wording
•$6.4M increase in income tax expense related to higher taxable earnings.
Previous wording
During December 2020, ES entered into a series of AMAs with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts. The utility provides certain asset management services and ES may deliver natural gas to the utility in exchange for aggregate net proceeds of approximately $500M, payable through November 1, 2030. The AMAs include a series of initial and permanent releases, which commenced on November 1, 2021. NJR will receive a total of approximately $260M in cash from fiscal 2022 through fiscal 2024 and $34M per year from fiscal 2025 through fiscal 2031 under the agreements. ES recognized operating revenue of approximately $9.5M and $20.0M during the three months ended December 31, 2023 and 2022, respectively, on the Unaudited Condensed Consolidated Statements of Operations. Amounts received in excess of revenue totaling $116.8M and $58.7M as of December 31, 2023 and September 30, 2023, respectively, are included in deferred revenue on the Unaudited Condensed Consolidated Balance Sheets.
Current wording
During December 2020, ES entered into a series of AMAs with an investment grade public utility to release pipeline capacity associated with certain natural gas transportation contracts. The utility provides certain asset management services and ES may deliver natural gas to the utility in exchange for aggregate net proceeds of approximately $500M, payable through November 1, 2030. The AMAs include a series of initial and permanent releases, which commenced on November 1, 2021. NJR will receive a total of approximately $260M in cash from fiscal 2022 through fiscal 2024 and $34M per year from fiscal 2025 through fiscal 2031 under the agreements. ES recognized operating revenue of approximately $9.5M and $9.5M during the three months ended March 31, 2024 and 2023, respectively, and $19.0M and $29.5M during the six months ended March 31, 2024 and 2023, respectively, on the Unaudited Condensed Consolidated Statements of Operations. Amounts received in excess of revenue totaling $107.2M and $58.7M as of March 31, 2024 and September 30, 2023, respectively, are included in deferred revenue on the Unaudited Condensed Consolidated Balance Sheets.
Previous wording
(1)Includes related party transactions of approximately $1.1M and $8.4M for the three months ended December 31, 2023 and 2022, respectively, which are eliminated in consolidation.
Current wording
(1)Includes related party transactions of approximately $(3.7)M and $0.2M during the three months ended March 31, 2024 and 2023, respectively, and approximately $(4.9)M and $8.6M during the six months ended March 31, 2024 and 2023, respectively, which are eliminated in consolidation.
Showing the first 40 of 74 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
•$9.4M increase in Utility Gross Margin; and
Current report — wording carried from elsewhere
•$4.2M increase in depreciation expense, as previously discussed.
Current report — wording carried from elsewhere
•$55.5M decrease in natural gas purchases, as previously discussed.
Current report — wording carried from elsewhere
•$274.0M decrease in operating revenues, as previously discussed;
Current report — wording carried from elsewhere
•$9.3M increase in O&M due to higher employee related expenses and a reduction in the reserve for bad debt in the prior year; partially offset by
Current report — wording carried from elsewhere
A reconciliation of S&T's net income, the most directly comparable GAAP financial measure to NFE, is as follows:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•$12.6M decrease in income tax expense.