UNITIL CORP
For the period ended Jun 30, 2024. Filed Aug 6, 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.
Jun 30, 2024 · Filed Aug 6, 2024
UTL$56.38-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0000950170-24-053926
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsConsolidated Statements of Earnings—Three Months Ended March 31, 2024 and 2023Consolidated Balance Sheets, March 31, 2024, March 31, 2023 and December 31, 2023Consolidated Statements of Cash Flows—Three Months Ended March 31, 2024 andConsolidated Statements of Changes in Common Stock Equity – Three Months Ended March 31, 2024 and 2023Notes to Consolidated Financial StatementsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000950170-24-091194
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsConsolidated Statements of Earnings—Three and Six Months Ended June 30, 2024 and 2023Consolidated Balance Sheets, June 30, 2024, June 30, 2023 and December 31, 2023Consolidated Statements of Cash Flows—Six Months Ended June 30, 2024 and 2023Consolidated Statements of Changes in Common Stock Equity – Three and Six Months Ended June 30, 2024 andNotes to Consolidated Financial StatementsThe 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 260 previous paragraphs and 258 current paragraphs.
155 unchanged; 90 reworded; 10 added; 8 removed; 7 previous and 3 current paragraphs rearranged.
Tables are not compared: 37 previous and 43 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 (10)
Current report
Gas GAAP Gross Margin was $20.5 million in the three months ended June 30, 2024, an increase of $1.1 million compared to the same period in 2023. Gas GAAP Gross Margin was $70.6 million in the six months ended June 30, 2024, an increase of $6.3 million compared to the same period in 2023. The increase in the three month period was driven by higher rates and customer growth of $1.6 million, and the favorable effect on gas sales of $0.4 million from colder early spring weather in 2024, compared to the same period in 2023, partially offset by higher depreciation and amortization of $0.9 million. The increase in the six month period was driven by higher rates and customer growth of $8.1 million, partially offset by higher depreciation and amortization of $1.8 million.
Current report
The Company’s Net Income was $31.5 million, or $1.96 in Earnings Per Share (EPS) for the first six months of 2024, an increase of $3.2 million in Net Income, or $0.20 in EPS, compared to the first six months of 2023. The Company’s earnings in the first six months of 2024 reflect higher rates and customer growth. Operation and Maintenance expenses include $0.3 million in both the three and six months ended June 30, 2024 for transaction costs associated with the Company’s recently announced acquisition of Bangor Natural Gas Company.
Current report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $24.9 million and $52.0 million in the three and six months ended June 30, 2024, respectively, increases of $0.7 million and $1.1 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Current report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $31.3 million and $92.3 million in the three and six months ended June 30, 2024, respectively, increases of $2.0 million and $8.1 million, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher rates and customer growth of $1.6 million, and the favorable effect on gas sales of $0.4 million from colder early spring weather in 2024, compared to the same period in 2023. The increase in the six month period reflects higher rates and customer growth of $8.1 million.
Current report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $24.9 million and $52.0 million in the three and six months ended June 30, 2024, respectively, increases of $0.7 million and $1.1 million, respectively, compared to the same periods in 2023. These increases reflect higher rates and customer growth.
Current report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $31.3 million and $92.3 million in the three and six months ended June 30, 2024, respectively, increases of $2.0 million and $8.1 million, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher rates and customer growth of $1.6 million, and the favorable effect on gas sales of $0.4 million from colder early spring weather in 2024, compared to the same period in 2023. The increase in the six month period reflects higher rates and customer growth of $8.1 million.
Current report
(1) As of July 24, 2024, these five employees are no longer covered by a collective bargaining agreement.
Current report
Acquisition of Bangor Natural Gas Company - On July 8, 2024, Unitil entered into a Stock Purchase Agreement (the “Purchase Agreement”) among the Company, PHC Utilities, Inc. (the “Seller”), and, with respect to certain portions of the Purchase Agreement, Hearthstone Utilities, Inc., d/b/a Hope Companies, Inc. (the “Parent”). The Seller is a subsidiary of the Parent. Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Company agreed to acquire all of the issued and outstanding shares of capital stock of Bangor Natural Gas Company (Bangor) from the Seller (the “Acquisition”) for $70.9 million in cash, subject to certain adjustments as provided in the Purchase Agreement. The transaction is expected to be financed initially with an unsecured short-term loan facility and ultimately financed with a balanced mix of equity and private placement debt. The Acquisition is subject to approval by the MPUC. The Company is also seeking approval of various affiliate agreements between the Company, its subsidiaries, and Bangor. Furthermore, Unitil requested that the MPUC issue an order excusing Bangor and Unitil from certain regulatory conditions and obligations imposed upon Bangor or its affiliates in conjunction with prior reorganizations of Bangor and finding that the value of certain assets for cost of service ratemaking purposes is not less than the depreciated original cost of those assets.
Current report
Note 5– Common Stock and preferred stock
Current report
On August 17, 2023, Fitchburg filed a petition with the MDPU seeking approval for a $6.8 million increase to base distribution rates, with new rates to be effective July 1, 2024. Fitchburg also requested, among other things, approval for a performance-based ratemaking (PBR) plan for up to a five-year term and continuation of its revenue decoupling mechanism. On June 28, 2024, the MDPU issued an Order providing for a $4.7 million increase to base rates, effective July 1, 2024. This includes a transfer of $2.2 million in costs from certain reconciling mechanisms to base distribution rates. In addition to authorizing an increase to base rates, the Order approved a PBR plan for up to a five-year term and continuation of the Company’s revenue decoupling mechanism. The Order provided for a return on equity of 9.4% and a capital structure reflecting 52% equity and 48% long-term debt. On July 5, 2024, the Company filed its compliance tariff filing and made further revisions as directed by the MDPU on July 15, 2024. On July 16, 2024 the MDPU approved its revised compliance filing. Part of the transfer of revenues from reconciling mechanisms to base rates included $0.8 million of pension/PBOP revenues. In its order, the MDPU found that allowing the Company to recover pension and PBOP expense through its Pension/PBOP Adjustment mechanism is no longer warranted. Instead, the MDPU concluded that these expenses should be recovered in base distribution rates, the mechanism should be discontinued and any unrecovered expenses existing as of the effective date of new rates will be recovered over two years. On July 18, 2024, the Company filed a Motion for Reconsideration and Recalculation in connection with this issue. This motion is pending.
Removed paragraphs (8)
Previous report
Gas GAAP Gross Margin was $50.2 million in the three months ended March 31, 2024, an increase of $5.4 million compared to the same period in 2023. The increase was driven by higher rates and customer growth of $6.5 million, partially offset by the unfavorable effects of warmer winter weather in 2024 of $0.4 million and higher depreciation and amortization of $0.7 million.
Previous report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $27.1 million in the first quarter of 2024, an increase of $0.4 million compared to the same period in 2023. This increase reflects higher rates and customer growth.
Previous report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $61.0 million in the first quarter of 2024, an increase of $6.1 million compared to the same period in 2023, driven by higher rates and customer growth of $6.5 million, partially offset by the unfavorable effects of warmer winter weather in 2024 of $0.4 million.
Previous report
Electric Adjusted Gross Margin (a non-GAAP financial measure) was $27.1 million for the three months ended March 31, 2024, an increase of $0.4 million, compared with the same period in 2023. This increase reflects higher rates and customer growth.
Previous report
Gas Adjusted Gross Margin (a non-GAAP financial measure) was $61.0 million for the three months ended March 31, 2024, an increase of $6.1 million compared to the same period in 2023, driven by higher rates and customer growth of $6.5 million, partially offset by the unfavorable effects of warmer winter weather in 2024 of $0.4 million.
Previous report
An in-person hearing was held on March 12, 2024 at Everett City Hall and a video conference was held by the MDPU on March 15, 2024. This matter remains pending. Fitchburg and other LDCs have requested an Order by May 1, 2024.
Reworded paragraphs (90)
Previous wording
Unitil had an investment in Net Utility Plant of $1,429.8 million at March 31, 2024. Earnings from Unitil’s utility operations are derived primarily from the return on investment in the utility assets of the three distribution utilities and Granite State. Unitil’s total operating revenue includes revenue to recover the approved cost of purchased electricity and gas in rates on a fully reconciling basis. As a result of this reconciling rate structure, the Company’s earnings are not directly affected by changes in the cost of purchased electricity and gas.
Current wording
Unitil had an investment in Net Utility Plant of $1.5 billion at June 30, 2024. Earnings from Unitil’s utility operations are derived primarily from the return on investment in the utility assets of the three distribution utilities and Granite State. Unitil’s total operating revenue includes revenue to recover the approved cost of purchased electricity and gas in rates on a fully reconciling basis. As a result of this reconciling rate structure, the Company’s earnings are not directly affected by changes in the cost of purchased electricity and gas.
Previous wording
Unitil Resources is the Company’s wholly-owned, non-regulated subsidiary. The Company’s other subsidiaries include Unitil Service Corp., which provides, at cost, a variety of administrative and professional services to Unitil’s affiliated companies; Unitil Realty Corp., which owns and manages Unitil’s corporate office building and property located in Hampton, New Hampshire and owns land for future use in Kingston, New Hampshire; and Unitil Power Corp., which formerly functioned as the full requirements wholesale power supply provider for Unitil Energy. Unitil’s consolidated net income includes the earnings of the holding company and these subsidiaries.
Current wording
Unitil Resources is the Company’s wholly-owned, non-regulated subsidiary. The Company’s other subsidiaries include Unitil Service Corp., which provides, at cost, a variety of administrative and professional services to Unitil’s affiliated companies; Unitil Realty Corp., which owns and manages Unitil’s corporate office building and property located in Hampton, New Hampshire; and Unitil Power Corp., which formerly functioned as the full requirements wholesale power supply provider for Unitil Energy. Unitil’s consolidated net income includes the earnings of the holding company and these subsidiaries.
Previous wording
Unitil’s distribution utilities deliver electricity and/or gas to all customers in their service territory, at rates established under cost of service regulation. Under this regulatory structure, Unitil’s distribution utilities recover the cost of providing distribution service to their customers based on historical test years, and earn a return on their capital investment in utility assets. The Company’s distribution utilities and its gas transmission pipeline company also may recover certain base rate costs, including capital project spending and enhanced reliability and vegetation management programs, through annual step adjustments or cost tracking rate mechanisms.
Current wording
Unitil’s distribution utilities deliver electricity and/or gas to all customers in their service territory, at rates established under cost of service regulation. Under this regulatory structure, Unitil’s distribution utilities recover the cost of providing distribution service to their customers based on historical test years, and earn a return on their capital investment in utility assets. The Company’s distribution utilities and its gas transmission pipeline company also may recover certain base rate costs, including capital project spending, qualifying storm expenses and enhanced reliability and vegetation management programs, through annual step adjustments or cost tracking rate mechanisms.
Previous wording
Electric GAAP Gross Margin was $20.1 million in the three months ended March 31, 2024, a decrease of $0.2 million compared to the same period in 2023. The decrease was driven by higher depreciation and amortization expense of $0.6 million, partially offset by higher rates and customer growth of $0.4 million.
Current wording
Electric GAAP Gross Margin was $17.8 million in the three months ended June 30, 2024, essentially unchanged compared to the same period in 2023. Electric GAAP Gross Margin was $37.9 million in the six months ended June 30, 2024, a decrease of $0.1 million compared to the same period in 2023. The three month period reflects higher rates and customer growth of $0.7 million, offset by higher depreciation and amortization expense of $0.7 million. The decrease in the six month period was driven by higher depreciation and amortization expense of $1.2 million, partially offset by higher rates and customer growth of $1.1 million.
Previous wording
The Company’s Net Income was $27.2 million, or $1.69 in Earnings Per Share (EPS) for the first quarter of 2024, an increase of $3.1 million in Net Income, or $0.18 in EPS, compared to the first quarter of 2023.
Current wording
The Company’s Net Income was $4.3 million, or $0.27 in Earnings Per Share (EPS) for the second quarter of 2024, an increase of $0.1 million in Net Income, or $0.02 in EPS, compared to the second quarter of 2023. The Company’s earnings in the second quarter of 2024 reflect higher rates and customer growth.
Previous wording
Operation and Maintenance (O&M) expenses increased $0.1 million in the three months ended March 31, 2024, compared to the same period in 2023. The increase reflects higher utility operating costs.
Current wording
Operation and Maintenance (O&M) expenses increased $0.3 million and $0.4 million, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher labor costs of $0.6 million, partially offset by lower utility operating costs of $0.3 million. The increase in the six month period primarily reflects higher labor costs.
Previous wording
Depreciation and Amortization expense increased $1.3 million in the three months ended March 31, 2024, compared to the same period in 2023, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of storm costs and other deferred costs.
Current wording
Depreciation and Amortization expense increased $1.5 million and $2.8 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of storm costs and other deferred costs.
Previous wording
Taxes Other Than Income Taxes increased $0.4 million in the three months ended March 31, 2024, compared to the same period in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Current wording
Taxes Other Than Income Taxes increased $0.3 million and $0.7 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Previous wording
Interest Expense, Net increased $0.2 million in the three months ended March 31, 2024, compared to the same period in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other.
Current wording
Interest Expense, Net increased $0.4 million and $0.6 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other interest income.
Previous wording
Other Expense (Income), Net increased $0.3 million in the three months ended March 31, 2024, compared to the same period in 2023, reflecting higher retirement benefit costs.
Current wording
Other Expense (Income), Net increased $0.2 million and $0.5 million, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher retirement benefit costs.
Previous wording
Federal and State Income Taxes for the three months ended March 31, 2024 increased $1.1 million compared with the same period in 2023, reflecting higher pre-tax earnings in 2024.
Current wording
Federal and State Income Taxes for the three and six months ended June 30, 2024 decreased $0.1 million and increased $1.0 million, respectively, compared with the same periods in 2023. The increase in the six month period reflects higher pre-tax earnings in 2024.
Previous wording
Electric Operating Revenues and Electric Adjusted Gross Margin - The following table details Total Electric Operating Revenues and Electric Adjusted Gross Margin for the three months ended March 31, 2024 and 2023:
Current wording
Electric Operating Revenues and Electric Adjusted Gross Margin - The following table details Total Electric Operating Revenues and Electric Adjusted Gross Margin for the three and six months ended June 30, 2024 and 2023:
Previous wording
Total Electric Operating Revenue decreased $34.6 million, or 32.0%, in the three months ended March 31, 2024, compared to the same period in 2023, reflecting lower costs of electric sales, which are tracked and reconciled to costs that are passed through directly to customers, partially offset by higher electric distribution rates.
Current wording
Total Electric Operating Revenue decreased $8.1 million, or 12.6%, and $42.7 million, or 24.7%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting lower costs of electric sales, which are tracked and reconciled to costs that are passed through directly to customers, partially offset by higher electric distribution rates.
Previous wording
Kilowatt-hour Sales - Unitil’s total electric kWh sales were essentially unchanged in the three month period ended March 31, 2024, compared to the same period in 2023. Sales to Residential decreased 0.8% and sales to Commercial and Industrial (C&I) customers increased 0.7% in the three month period ended March 31, 2024, compared to the same period in 2023. As of March 31, 2024, the number of electric customers increased by approximately 500 over the previous year. Sales margins derived from decoupled unit sales are not sensitive to changes in electric kWh sales. Substantially all of the Company’s electric kWh sales volumes are decoupled.
Current wording
Kilowatt-hour Sales - Unitil’s total electric kWh sales increased 4.3% and 2.0% in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. Sales to Residential and Commercial and Industrial (C&I) customers increased 5.5% and 3.5%, respectively, in the three months ended June 30, 2024, compared to the same period in 2023, reflecting warmer weather in the second quarter of 2024 compared to the same period in 2023, and customer growth. Sales to Residential and C&I customers increased 1.9% and 2.0%, respectively, in the six months ended June 30, 2024, compared to the same period in 2023, reflecting warmer weather for cooling purposes in 2024 compared to 2023, and customer growth. Based on weather data collected in the Company's electric service areas, on average there were 76% more Cooling Degree Days in the first six months of 2024 compared to the same period in 2023. As of June 30, 2024, the number of electric customers increased by approximately 750 over the previous year. Sales margins derived from decoupled unit sales are not sensitive to changes in electric kWh sales. Substantially all of the Company’s electric kWh sales volumes are decoupled.
Previous wording
The following table details total kWh sales for the three months ended March 31, 2024 and 2023 by major customer class:
Current wording
The following table details total kWh sales for the three and six months ended June 30, 2024 and 2023 by major customer class:
Previous wording
Gas Operating Revenues and Adjusted Gross Margin - The following table details Total Gas Operating Revenues and Gas Adjusted Gross Margin for the three months ended March 31, 2024 and 2023:
Current wording
Gas Operating Revenues and Adjusted Gross Margin - The following table details Total Gas Operating Revenues and Gas Adjusted Gross Margin for the three and six months ended June 30, 2024 and 2023:
Previous wording
The decrease in Total Gas Operating Revenue of $6.9 million, or 6.2%, in the three months ended March 31, 2024, compared to the same period in 2023, reflects lower costs of gas sales, which are tracked and reconciled costs that are passed through directly to customers, and lower gas therm sales, partially offset by higher gas distribution rates.
Current wording
Total Gas Operating Revenue increased $0.4 million, or 1.0%, and decreased $6.5 million, or 4.3%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher gas distribution rates and higher gas sales, partially offset by lower costs of gas sales, which are tracked and reconciled costs that are passed through directly to customers. The decrease in the six month period reflects lower costs of gas sales, which are tracked and reconciled costs that are passed through directly to customers, partially offset by higher gas distribution rates.
Previous wording
Therm Sales- Unitil’s total gas therm sales decreased 1.8% in the three month period ended March 31, 2024, compared to the same period in 2023. In the first quarter of 2024, sales to Residential and C&I customers decreased 3.2% and 1.3%, respectively, compared to the same period in 2023, reflecting warmer winter weather in 2024 compared to 2023, partially offset by customer growth. Based on weather data collected in the Company’s gas service areas, on average there were 0.6% fewer EDD in the first quarter of 2024 compared to the same period in 2023. The Company estimates weather-normalized gas therm sales for Northern Utilities' Maine division, the Company's only non-decoupled gas service area, increased 0.3% in the first three months of 2024 compared to the same period in 2023. As of March 31, 2024, the number of gas customers increased by approximately 1,100 over the previous year. Sales margins derived from decoupled unit sales (currently representing approximately 42% of total annual therm sales volume) are not sensitive to changes in gas therm sales, although those sales margins are sensitive to changes in the number of customers served.
Current wording
Therm Sales- Unitil’s total gas therm sales increased 2.0% and decreased 0.5% in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. In the second quarter of 2024, sales to Residential customers increased 4.9% and sales to C&I customers increased 1.3%, compared to the same period in 2023, reflecting customer growth and colder early spring weather in 2024, compared to the same period in 2023. In the first six months of 2024, sales to Residential and C&I customers decreased 1.0% and 0.4%, respectively, compared to the same period in 2023, reflecting warmer winter weather in 2024 compared to 2023 and lower average usage, partially offset by customer growth and colder early spring weather in 2024, compared to the same period in 2023. As of June 30, 2024, the number of gas customers increased by approximately 1,100 over the previous year. Sales margins derived from decoupled unit sales (currently representing approximately 42% of total annual therm sales volume) are not sensitive to changes in gas therm sales, although those sales margins are sensitive to changes in the number of customers served.
Previous wording
The following table details total firm therm sales for the three months ended March 31, 2024 and 2023 by major customer class:
Current wording
The following table details total firm therm sales for the three and six months ended June 30, 2024 and 2023 by major customer class:
Previous wording
Cost of Electric Sales - Cost of Electric Sales includes the cost of electric supply and spending on energy efficiency programs. Cost of Electric Sales decreased $35.0 million, or 42.9%, in the three months ended March 31, 2024, compared to the same period in 2023. This decrease reflects lower wholesale electricity prices. Because the Company reconciles and recovers the approved Cost of Electric Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Current wording
Cost of Electric Sales - Cost of Electric Sales includes the cost of electric supply and spending on energy efficiency programs. Cost of Electric Sales decreased $8.8 million, or 21.8%, and $43.8 million, or 36.0%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. These decreases reflect lower wholesale electricity prices and an increase in the amount of electricity purchased by customers directly from third-party suppliers, partially offset by higher sales of electricity. Because the Company reconciles and recovers the approved Cost of Electric Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Previous wording
Cost of Gas Sales - Cost of Gas Sales includes the cost to supply the Company’s total gas requirements and spending on energy efficiency programs. Cost of Gas Sales decreased $13.0 million, or 22.8%, in the three months ended March 31, 2024, compared to the same period in 2023. This decrease reflects lower wholesale gas commodity prices and lower gas therm sales. Because the Company reconciles and recovers the approved Cost of Gas Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Current wording
Cost of Gas Sales - Cost of Gas Sales includes the cost to supply the Company’s total gas requirements and spending on energy efficiency programs. Cost of Gas Sales decreased $1.6 million, or 16.7%, and $14.6 million, or 21.9%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. These decreases primarily reflect lower wholesale gas commodity prices and an increase in the amount of gas purchased by customers directly from third-party suppliers. Because the Company reconciles and recovers the approved Cost of Gas Sales in its rates at cost on a pass-through basis, changes in approved expenses do not affect earnings.
Previous wording
Operation and Maintenance (O&M) -O&M expense includes electric and gas utility operating costs, and the operating cost of the Company’s corporate and other business activities. O&M expense increased $0.1 million, or 0.6%, in the three months ended March 31, 2024, compared to the same period in 2023. The increase reflects higher utility operating costs .
Current wording
Operation and Maintenance (O&M) -O&M expense includes electric and gas utility operating costs, and the operating cost of the Company’s corporate and other business activities. O&M expense increased $0.3 million, or 1.6%, and $0.4 million, or 1.1%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase in the three month period reflects higher labor costs of $0.6 million, partially offset by lower utility operating costs of $0.3 million. The increase in the six month period primarily reflects higher labor costs.
Previous wording
Depreciation and Amortization - Depreciation and Amortization expense increased $1.3 million, or 7.8%, in the three months ended March 31, 2024, compared to the same period in 2023, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of storm costs and other deferred costs.
Current wording
Depreciation and Amortization - Depreciation and Amortization expense increased $1.5 million, or 9.0%, and $2.8 million, or 8.4%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting additional depreciation associated with higher levels of utility plant in service and higher amortization of storm costs and other deferred costs.
Previous wording
Taxes Other Than Income Taxes - Taxes Other Than Income Taxes increased $0.4 million, or 5.5%, in the three months ended March 31, 2024, compared to the same period in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Current wording
Taxes Other Than Income Taxes - Taxes Other Than Income Taxes increased $0.3 million, or 4.4%, and $0.7 million, or 5.0%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher local property taxes on higher utility plant in service and higher payroll taxes.
Previous wording
Other Expense (Income), Net -Other Expense (Income), Net increased $0.3 million in the three months ended March 31, 2024, compared to the same period in 2023, reflecting higher retirement benefit costs.
Current wording
Other Expense (Income), Net -Other Expense (Income), Net increased $0.2 million and $0.5 million, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, reflecting higher retirement benefit costs.
Previous wording
Provision for Income Taxes - Federal and State Income Taxes for the three months ended March 31, 2024 increased $1.1 million compared with the same period in 2023, reflecting higher pre-tax earnings in 2024.
Current wording
Provision for Income Taxes - Federal and State Income Taxes for the three and six months ended June 30, 2024 decreased $0.1 million and increased $1.0 million, respectively, compared with the same periods in 2023. The increase in the six month period reflects higher pre-tax earnings in 2024.
Previous wording
Interest Expense, Net increased $0.2 million in the three months ended March 31, 2024, compared to the same period in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other.
Current wording
Interest Expense, Net increased $0.4 million, or 5.7%, and $0.6 million, or 4.3%, in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, primarily reflecting higher interest expense on short-term borrowings and higher levels of long-term debt, partially offset by higher interest income on regulatory assets and other interest income.
Previous wording
The Company utilizes the Credit Facility for cash management purposes related to its short-term operating activities. Total gross borrowings were $85.9 million for the three months ended March 31, 2024. Total gross repayments were $78.0 million for the three months ended March 31, 2024. The following table details the borrowing limits, amounts outstanding and amounts available under the Credit Facility as of March 31, 2024, March 31, 2023 and December 31, 2023:
Current wording
The Company utilizes the Credit Facility for cash management purposes related to its short-term operating activities. Total gross borrowings were $133.2 million for the six months ended June 30, 2024. Total gross repayments were $137.4 million for the six months ended June 30, 2024. The following table details the borrowing limits, amounts outstanding and amounts available under the Credit Facility as of June 30, 2024, June 30, 2023 and December 31, 2023:
Previous wording
Northern Utilities enters into asset management agreements under which Northern Utilities releases certain gas pipeline and storage assets, sells to an asset manager and subsequently repurchases the gas over the course of the gas heating season at the same price at which it sold the gas to the asset manager. There was $3.3 million of natural gas storage inventory and corresponding obligations at March 31, 2024 related to these asset management agreements. The amount of natural gas inventory released in March 2024, which was payable in April 2024, was $1.4 million and was recorded in Accounts Payable at March 31, 2024.
Current wording
Northern Utilities enters into asset management agreements under which Northern Utilities releases certain gas pipeline and storage assets, sells to an asset manager and subsequently repurchases the gas over the course of the gas heating season at the same price at which it sold the gas to the asset manager. There was $5.5 million of natural gas storage inventory and corresponding obligations at June 30 2024 related to these asset management agreements. The amount of natural gas inventory released in June 2024, which was payable in July 2024, was $0.1 million and was recorded in Accounts Payable at June 30 2024.
Previous wording
As of March 31, 2024, the Company and its subsidiaries had 533 employees. The Company considers its relationship with employees to be good and has not experienced any major labor disruptions.
Current wording
As of June 30, 2024, the Company and its subsidiaries had 536 employees. The Company considers its relationship with employees to be good and has not experienced any major labor disruptions.
Previous wording
As of March 31, 2024, a total of 178 employees of certain of the Company’s subsidiaries were represented by labor unions. The following table details by subsidiary the employees covered by a collective bargaining agreement (CBA) as of March 31, 2024:
Current wording
As of June 30, 2024, a total of 179 employees of certain of the Company’s subsidiaries were represented by labor unions. The following table details by subsidiary the employees covered by a collective bargaining agreement (CBA) as of June 30, 2024:
Previous wording
Unitil meets its external financing needs by issuing short-term and long-term debt. The majority of debt outstanding represents long-term notes or bonds bearing fixed rates of interest. Changes in market interest rates do not affect interest expense resulting from these outstanding long-term debt securities. However, the Company periodically repays its short-term debt borrowings through the issuance of new long-term debt securities. Changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuances of long-term debt securities. In addition, short-term debt borrowings bear a variable rate of interest. As a result, changes in short-term interest rates will increase or decrease interest expense in future periods. For example, if the average amount of short-term debt outstanding was $25 million for the period of one year, a change in interest rates of 1% would result in a change in annual interest expense of approximately $250,000. The average interest rates on the Company’s short-term borrowings and intercompany money pool transactions for the three months ended March 31, 2024 and March 31, 2023 were 6.7% and 5.9%, respectively. The average interest rate on the Company’s short-term borrowings for the twelve months ended December 31, 2023 was 6.4%.
Current wording
Unitil meets its external financing needs by issuing short-term and long-term debt. The majority of debt outstanding represents long-term notes or bonds bearing fixed rates of interest. Changes in market interest rates do not affect interest expense resulting from these outstanding long-term debt securities. However, the Company periodically repays its short-term debt borrowings through the issuance of new long-term debt securities. Changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuances of long-term debt securities. In addition, short-term debt borrowings bear a variable rate of interest. As a result, changes in short-term interest rates will increase or decrease interest expense in future periods. For example, if the average amount of short-term debt outstanding was $25 million for the period of one year, a change in interest rates of 1% would result in a change in annual interest expense of approximately $250,000. The average interest rates on the Company’s short-term borrowings and intercompany money pool transactions for the three months ended June 30, 2024 and June 30, 2023 were 6.7% and 6.3%, respectively. The average interest rates on the Company’s short-term borrowings and intercompany money pool transactions for the six months ended June 30, 2024 and June 30, 2023 were 6.7% and 6.1%, respectively. The average interest rate on the Company’s short-term borrowings for the twelve months ended December 31, 2023 was 6.4%.
Previous wording
Please refer to Note 6 to the Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of Regulatory Matters.
Current wording
Refer to Note 6 to the Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of Regulatory Matters.
Previous wording
Please refer to Note 7 to the Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of Environmental Matters.
Current wording
Refer to Note 7 to the Consolidated Financial Statements in Part I, Item 1 of this report for a discussion of Environmental Matters.
Previous wording
Unitil also hasthree other wholly-owned subsidiaries: Unitil Service, Unitil Resources and Unitil Realty. Unitil Service provides, at cost, a variety of administrative and professional services, including regulatory, financial, accounting, human resources, engineering, operations, technology, energy management and management services on a centralized basis to its affiliated Unitil companies. Unitil Resources is the Company’s wholly-owned non-regulated subsidiary, which currently does not have any activity. Unitil Realty owns and manages the Company’s corporate office in Hampton, New Hampshire and leases this facility to Unitil Service under a long-term lease arrangement. Unitil Realty also owns land for future use in Kingston, New Hampshire.
Current wording
Unitil also has three other wholly-owned subsidiaries: Unitil Service, Unitil Resources and Unitil Realty. Unitil Service provides, at cost, a variety of administrative and professional services, including regulatory, financial, accounting, human resources, engineering, operations, technology, energy management and management services on a centralized basis to its affiliated Unitil companies. Unitil Resources is the Company’s wholly-owned non-regulated subsidiary, which currently does not have any activity. Unitil Realty owns and manages the Company’s corporate office in Hampton, New Hampshire and leases this facility to Unitil Service under a long-term lease arrangement. Unitil Realty also owns land for future use in Kingston, New Hampshire.
Previous wording
Basis of Presentation - The accompanying unaudited consolidated financial statements of Unitil have been prepared in accordance with the instructions to Form 10-Q and include the information and footnotes required by generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024. For additional information, refer to Note 1 of Part II to the Consolidated Financial Statements – “Summary of Significant Accounting Policies” of the Company’s Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (SEC) on February 13, 2024, for a description of the Company’s Basis of Presentation.
Current wording
Basis of Presentation - The accompanying unaudited consolidated financial statements of Unitil have been prepared in accordance with the instructions to Form 10-Q and include the information and footnotes required by generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024. For additional information, refer to Note 1 of Part II to the Consolidated Financial Statements – “Summary of Significant Accounting Policies” of the Company’s Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (SEC) on February 13, 2024, for a description of the Company’s Basis of Presentation.
Previous wording
Income Taxes - The Company is subject to Federal and State income taxes and various other business taxes. The Company’s process for determining income tax amounts involves estimating the Company’s current tax liabilities, and assessing temporary and permanent differences resulting from the timing of the deductions of expenses and recognition of taxable income for tax and book accounting purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Company’s Consolidated
Current wording
Income Taxes - The Company is subject to Federal and State income taxes and various other business taxes. The Company’s process for determining income tax amounts involves estimating the Company’s current tax liabilities, and assessing temporary and permanent differences resulting from the timing of the deductions of expenses and recognition of taxable income for tax and book accounting purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Company’s Consolidated Balance Sheets. The Company accounts for income tax assets, liabilities and expenses in accordance with the Financial Accounting Standards Board (FASB) Codification guidance on Income Taxes. The Company classifies penalties and interest expense related to income tax liabilities as income tax expense and interest expense, respectively, in the Consolidated Statements of Earnings.
Previous wording
Cash and Cash Equivalents - Cash and Cash Equivalents includes all cash and cash equivalents to which the Company has legal title. Cash equivalents include short-term investments with original maturities of three months or less and interest bearing deposits. The Company’s cash and cash equivalents are held at financial institutions and at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. Under the Independent System Operator—New England (ISO-NE) Financial Assurance Policy (Policy), Unitil’s subsidiaries Unitil Energy, Fitchburg and Unitil Power are required to provide assurance of their ability to satisfy their obligations to ISO-NE. Under this Policy, Unitil’s subsidiaries provide cash deposits covering approximately 2-1/2 months of outstanding obligations, less credit amounts that are based on the Company’s credit rating. As of March 31, 2024, March 31, 2023 and December 31, 2023, the Unitil subsidiaries had deposited$3.1 million, $4.2 million and $3.3 million, respectively to satisfy their ISO-NE obligations.
Current wording
Cash and Cash Equivalents - Cash and Cash Equivalents includes all cash and cash equivalents to which the Company has legal title. Cash equivalents include short-term investments with original maturities of three months or less and interest bearing deposits. The Company’s cash and cash equivalents are held at financial institutions and at times may exceed federally insured limits. The Company has not experienced any losses in such accounts. Under the Independent System Operator—New England (ISO-NE) Financial Assurance Policy (Policy), Unitil’s subsidiaries Unitil Energy, Fitchburg and Unitil Power are required to provide assurance of their ability to satisfy their obligations to ISO-NE. Under this Policy, Unitil’s subsidiaries provide cash deposits covering approximately 2-1/2 months of outstanding obligations, less credit amounts that are based on the Company’s credit rating. As of June 30, 2024, June 30, 2023 and December 31, 2023, the Unitil subsidiaries had deposited $2.3 million, $3.3 million and $3.3 million, respectively to satisfy their ISO-NE obligations.
Previous wording
Allowance for Doubtful Accounts - The Company recognizes a provision for doubtful accounts that reflects the Company’s estimate of expected credit losses for electric and gas utility service accounts receivable. The allowance for doubtful accounts is calculated by applying a historical loss rate to customer account balances, and reflects management’s assessment of current and expected economic conditions, customer trends, or other factors such as the extent and duration of any shutoff or collection moratoriums. The Company also calculates the amount of written-off receivables that are recoverable through regulatory rate reconciling mechanisms. The Company’s distribution utilities are authorized by regulators to recover the costs of the energy commodity portion of bad debts through rate mechanisms. Also, the electric and gas divisions of Fitchburg are authorized to recover through rates past due amounts associated with protected hardship accounts. Evaluating the adequacy of the allowance for doubtful accounts requires judgment about the assumptions used in the analysis. The Company’s experience has been that the assumptions used in evaluating the adequacy of the allowance for doubtful accounts have proven to be reasonably accurate.
Current wording
Allowance for Doubtful Accounts - The Company recognizes a provision for doubtful accounts that reflects the Company’s estimate of expected credit losses for electric and gas utility service accounts receivable. The allowance for doubtful accounts is calculated by applying a historical loss rate to customer account balances, and reflects management’s assessment of current and expected economic conditions, customer trends, or other factors. The Company also calculates the amount of written-off receivables that are recoverable through regulatory rate reconciling mechanisms. The Company’s distribution utilities are authorized by regulators to recover the costs of the energy commodity portion of bad debts through rate mechanisms. Also, the electric and gas divisions of Fitchburg are authorized to recover through rates past due amounts associated with protected hardship accounts. Evaluating the adequacy of the allowance for doubtful accounts requires judgment about the assumptions used in the analysis. The Company’s experience has been that the assumptions used in evaluating the adequacy of the allowance for doubtful accounts have proven to be reasonably accurate.
Previous wording
Accounts Receivable, Net includes $2.7 million, $3.0 million, and $2.3 million of the Allowance for Doubtful Accounts at March 31, 2024, March 31, 2023 and December 31, 2023, respectively. Unbilled Revenues, net (a component of Accrued Revenue) includes$0.1 million, $0.1 million and $0.1 million of the Allowance for Doubtful Accounts at March 31, 2024, March 31, 2023 and December 31, 2023, respectively.
Current wording
Accounts Receivable, Net includes$2.2 million,$2.2 million, and $2.3 million of the Allowance for Doubtful Accounts at June 30, 2024, June 30, 2023 and December 31, 2023, respectively. Unbilled Revenues, net (a component of Accrued Revenue) includes less than $0.1 million, less than $0.1 million and $0.1 million of the Allowance for Doubtful Accounts at June 30, 2024, June 30, 2023 and December 31, 2023, respectively.
Showing the first 40 of 90 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
In June 2023, the MDPU convened an EV stakeholder process to finalize EV program performance metrics. On April 3, 2023, the electric companies filed comments on the MDPU’s proposed metrics. On December 15, 2023, the MDPU approved EV performance metrics. Following that approval, the MDPU required the electric companies to develop a joint state-wide program evaluation plan for MDPU approval and stakeholder input. On May 15, 2024, Fitchburg submitted its first annual report on the performance of its EV Program, and a proposed statewide program evaluation plan for MDPU approval and stakeholder input.
Current report — wording carried from elsewhere
FERC Transmission Formula Rate Proceedings- Pursuant to Section 206 of the Federal Power Act, there are several pending proceedings before the FERC concerning the justness and reasonableness of the Return on Equity (ROE) component of the ISO-New
Current report — wording carried from elsewhere
For Northern Utilities’ Maine division, the MPUC has authorized the recovery of environmental remediation costs over succeeding five-year periods.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Balance Sheets. The Company accounts for income tax assets, liabilities and expenses in accordance with the Financial Accounting Standards Board (FASB) Codification guidance on Income Taxes. The Company classifies penalties and interest expense related to income tax liabilities as income tax expense and interest expense, respectively, in the Consolidated Statements of Earnings.
Previous report — wording carried elsewhere
Prior to the end of the vesting period, the Time Restricted Shares are subject to forfeiture if the participant ceases to be employed by the Company other than due to the participant’s death, disability or retirement.
Previous report — wording carried elsewhere
Northern Utilities - Targeted Infrastructure Replacement Adjustment (TIRA) - Maine-
Previous report — wording carried elsewhere
Fitchburg - Base Rates - Gas - On August 17, 2023, Fitchburg filed a petition with the MDPU seeking approval for a $10.9 million increase to base distribution rates, with new rates anticipated to be effective July 1, 2024. Fitchburg proposes to transfer $4.2 million in revenue requirements recovered through its Gas System Enhancement Program to base distribution rates. Net of these transfers, the proposed overall increase to distribution revenues is $6.7 million. As part of this filing, Fitchburg is requesting approval for a PBR plan for up to a five-year term and continuation of its revenue decoupling mechanism. A decision from the MDPU is expected in June 2024.
Previous report — wording carried elsewhere
Northern Utilities / Portland Natural Gas Transmission System (PNGTS) and TransCanada Pipelines Limited (TCPL) transportation from Empress, Alberta to Granite State Gas Transmission, Inc. (GSGT)
Previous report — wording carried elsewhere
% as reasonable and in the public interest. On January 19, 2023, Commonwealth Wind filed a Petition for Appeal with the Massachusetts Supreme Judicial Court seeking to set aside and vacate the MDPU’s Order approving the PPAs. In April 2023, SouthCoast Wind engaged with the EDCs to explore options to mitigate global resource constraints and pricing challenges associated with their PPAs from this procurement. SouthCoast Wind noted challenges around an inability to finance the projects under the current terms. The EDCs negotiated termination agreements with Commonwealth Wind and SouthCoast Wind and submitted the agreements to the MDPU for approval on July 13, 2023 and August 28, 2023, respectively. The MDPU approved both termination agreements on September 30, 2023.
Previous report — wording carried elsewhere
Unitil Energy anticipates the commencement of remediation activities in 2025. The Company does not believe this investigation will have a material adverse effect on its financial condition, results of operations or cash flows.