CHESAPEAKE UTILITIES CORP
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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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, 2025 · Filed Aug 7, 2025
CPK$140.28-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001628280-25-023220
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001628280-25-039014
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe 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 219 previous paragraphs and 265 current paragraphs.
147 unchanged; 65 reworded; 32 added; 6 removed; 1 previous and 21 current paragraphs rearranged.
Tables are not compared: 17 previous and 27 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 (32)
Current report
Gross Margin (GAAP) for the Regulated Energy segment for the quarter ended June 30, 2025 was $86.3 million, an increase of $10.0 million, or 13.1 percent, compared to the same period in 2024. The increase in gross margin largely reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, and organic growth in our natural gas distribution businesses.
Current report
Gross Margin (GAAP) for the Unregulated Energy segment for the quarter ended June 30, 2025 was $10.1 million, a decrease of $2.2 million, or 17.9 percent, compared to the same period in 2024. The decrease in gross margin was primarily attributable to a decreased level of customer consumption in our propane distribution business and lower propane margins and service fees, partially offset by higher CNG, RNG, and LNG services compared to the prior-year period.
Current report
Net income (GAAP) for the six months ended June 30, 2025 was $74.8 million, or $3.22 per share, compared to $64.4 million, or $2.89 per share, for the same quarter of 2024. Net income for the six months ended June 30, 2025 and 2024, included $0.6 million and $1.7 million, respectively, of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $9.3 million or 14.1 percent compared to the prior-year period.
Current report
Our adjusted net income for the three months ended June 30, 2025 was $24.3 million, or $1.04 per share, compared to $19.3 million, or $0.86 per share, for the same quarter of 2024. Operating income for the second quarter of 2025 was $50.3 million, an increase of $9.5 million compared to the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $8.6 million or 20.4 percent compared to the prior-year period. The increase in adjusted gross margin in the second quarter of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, natural gas growth and transmission expansion projects, and increased demand for CNG, RNG, and LNG services. The increase in operating expenses was driven largely by the absence of a RSAM adjustment from FCG (representing $2.3 million in the second quarter of 2024), higher depreciation attributable to growth projects and expenses associated with facilities, maintenance and outside services. These increases were partially offset by reduced payroll, benefits and other employee-related expenses during the quarter.
Current report
(2) Refer to Major Projects and Initiatives table for additional information.
Current report
(2) Refer to Major Projects and Initiatives table for additional information.
Current report
In June 2025, Eastern Shore filed a limited amended application with the FERC requesting that it issue an order authorizing revised initial transportation rates for the project. The revised rates were requested to address increased capital costs being incurred related to unanticipated changes in global markets and supply chains. Eastern Shore requested expedited action by the FERC in relation to this matter and an approved order was issued in July 2025. The project is expected to generate $10.2 million in adjusted gross margin in 2026 and $17.6 million in 2027 and thereafter.
Current report
Duncan Plains Pipeline Project
Current report
In July 2025, Aspire Energy Express entered into an agreement with American Electric Power to construct and operate an intrastate natural gas pipeline in central Ohio to serve a new fuel-cell facility, which will provide on-site electric power to a data center. This new transmission infrastructure is expected to be in service in the first half of 2027.
Current report
Weather was not a significant factor to adjusted gross margin in the second quarter of 2025 compared to the same period in 2024.
Current report
Operating income for the Regulated Energy segment for the second quarter of 2025 was $51.8 million, an increase of $11.3 million, or 27.9 percent, over the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $10.4 million, or 24.8 percent, compared to the same period in 2024. Higher operating income reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, organic growth in our natural gas distribution businesses and increased customer consumption. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $4.0 million was largely attributable to the absence of a $2.3 million RSAM adjustment from FCG, expenses associated with facilities, maintenance and outside services and higher depreciation attributable to growth projects. These increases were partially offset by reduced payroll, benefits and other employee-related expenses during the quarter.
Current report
(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects discussion for additional information.
Current report
Contributions from Regulated Infrastructure Programs
Current report
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024:
Current report
Items contributing to the period-over-period increase in adjusted gross margin are listed in the following table:
Current report
(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects discussion for additional information.
Current report
Contributions from Regulated Infrastructure Programs
Current report
Rate Changes Associated with Recent Rate Case Activities
Current report
Rate changes associated with the Delaware and Maryland natural gas rate cases and Florida Electric base rate case contributed additional adjusted gross margin of $5.6 million for the six months ended June 30, 2025. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Current report
Natural Gas Distribution Customer Growth
Current report
Changes in Customer Consumption
Current report
Adjusted Gross Margin from Off-system Natural Gas Capacity Sales
Current report
Fewer off-system natural gas capacity sales reduced adjusted gross margin by $0.7 million for the six months ended June 30, 2025.
Current report
Operating results for the Unregulated Energy segment for the second quarter of 2025 reflect a $1.9 million decrease compared to the same period in 2024. The increase in adjusted gross margin in the Unregulated Energy segment during the second quarter of 2025 was primarily driven by increased levels of CNG, RNG and LNG services and increased customer consumption at Aspire Energy. These increases were partially offset by reduced customer consumption and margin per gallon and fees in our propane distribution business. Operating expenses increased due to higher depreciation, amortization and property tax costs as well as increased facilities, maintenance and outside service costs compared to the prior-year period. Higher payroll, benefits and employee-related expenses also contributed to the increase in operating expenses during the quarter.
Current report
•Propane customer consumption -Adjusted gross margin decreased by $1.3 million due to decreased customer consumption resulting primarily due to the conversion of propane customers to our natural gas distribution service.
Current report
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024:
Current report
Items contributing to the period-over-period increase in adjusted gross margin are listed in the following table:
Current report
Propane Operations
Current report
•Increased level of CNG, RNG and LNG services - Adjusted gross margin increased by $7.1 million for the six months ended June 30, 2025 as compared to the same period in the prior year due to higher levels of CNG and RNG hold services and contributions from our Full Circle Dairy RNG facility.
Current report
Aspire Energy
Current report
Other income, net, was $1.0 million for the six months ended June 30, 2025 compared to $1.2 million during the prior-year period.
Current report
In August 2025, we entered into a Note Purchase Agreement, for the issuance of Senior Notes in the aggregate principal amount of $200.0 million with an initial funding of $150.0 million in August 2025 and an additional $50.0 million scheduled in September 2025. These Senior Notes have an average interest rate of 5.04 percent consisting of $60.0 million of 4.88 percent notes due in August 2028, $90.0 million of 5.16 percent notes due in August 2031, and $50.0 million of 5.02 percent notes due in September 2030. The proceeds received are being used to reduce short-term borrowings under our Revolver and to fund capital expenditures. The outstanding principal balance of the notes will be due on their respective maturity dates with interest payments payable semiannually beginning in 2026 until the principal has been paid in full. These Senior Notes have similar covenants and default provisions as our other Senior Notes.
Removed paragraphs (6)
Previous report
(2) See the Major Projects and Initiatives table.
Previous report
CNG/RNG/LNG Transportation and Infrastructure
Previous report
Margin from Regulated Infrastructure Programs
Previous report
Operating Expenses
Previous report
CNG/RNG/LNG Transportation and Infrastructure
Previous report
Operating Expenses
Reworded paragraphs (65)
Previous wording
The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to our non-GAAP financial measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for the three months ended March 31, 2025 and 2024:
Current wording
The following tables reconcile Gross Margin, Net Income, and EPS, all as defined under GAAP, to our non-GAAP financial measures of Adjusted Gross Margin, Adjusted Net Income and Adjusted EPS for the three and six months ended June 30, 2025 and 2024:
Previous wording
Gross Margin (GAAP) for the Regulated Energy segment for the quarter ended March 31, 2025 was $97.2 million, an increase of $3.9 million, or 4.2 percent, compared to the same period in 2024. The increase in gross margin largely reflects incremental margin from regulatory initiatives and infrastructure programs, organic growth in our natural gas distribution businesses, pipeline expansion projects, and increased customer consumption.
Current wording
Gross Margin (GAAP) for the Regulated Energy segment for the six months ended June 30, 2025 was $183.5 million, an increase of $13.9 million, or 8.2 percent, compared to the same period in 2024. The increase in gross margin largely reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, organic growth in our natural gas distribution businesses, and increased customer consumption.
Previous wording
Gross Margin (GAAP) for the Unregulated Energy segment for the quarter ended March 31, 2025 was $39.9 million, an increase of $6.8 million, or 20.5 percent, compared to the same period in 2024. The increase in gross margin was primarily attributable to an increased level of customer consumption in our propane distribution business and greater demand for virtual pipeline services.
Current wording
Gross Margin (GAAP) for the Unregulated Energy segment for the six months ended June 30, 2025 was $50.0 million, an increase of $4.6 million, or 10.1 percent, compared to the same period in 2024. The increase in gross margin was primarily attributable to greater demand for CNG, RNG and LNG services and an increased level of customer consumption in our propane distribution business earlier in the year primarily from colder year-over-year weather in our Delmarva service territory.
Previous wording
Net income (GAAP) for the quarter ended March 31, 2025 was $50.9 million, or $2.21 per share, compared to $46.2 million, or $2.07 per share, for the same quarter of 2024. Net income for the three months ended March 31, 2025 and 2024, included $0.2 million and $0.6 million, respectively, of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $4.3 million or 9.2 percent compared to the prior-year period.
Current wording
Net income (GAAP) for the quarter ended June 30, 2025 was $23.9 million, or $1.02 per share, compared to $18.2 million, or $0.82 per share, for the same quarter of 2024. Net income for the three months ended June 30, 2025 and 2024, included $0.4 million and $1.1 million, respectively, of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $5.0 million or 25.9 percent compared to the prior-year period.
Previous wording
Results of Operations for the Three Months Ended March 31, 2025
Current wording
Results of Operations for the Three and Six Months Ended June 30, 2025
Previous wording
Key variances between the first quarter of 2024 and 2025 included:
Current wording
Key variances between the second quarter of 2024 and 2025 included:
Previous wording
Our adjusted net income for the three months ended March 31, 2025 was $51.1 million, or $2.22 per share, compared to $46.8 million, or $2.10 per share, for the same quarter of 2024. Operating income for the first quarter of 2025 was $86.8 million, an increase of $7.2 million compared to the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $6.6 million or 8.2 percent compared to the prior-year period. Adjusted gross margin in the first quarter of 2025 was primarily driven by increased customer consumption resulting from year-over-year colder temperatures in our Mid-Atlantic and Ohio service territories, incremental margin from regulatory initiatives and infrastructure programs, increased demand for virtual pipeline services, natural gas organic growth and pipeline expansion projects. Higher operating expenses in the first quarter of 2025 were driven largely by the absence of a RSAM adjustment from FCG, increased payroll, benefits and other employee-related expenses, and higher depreciation attributable to growth projects. Additional expenses associated with facilities, maintenance and outside services, and higher insurance costs also contributed to the increase in operating expenses compared to the prior-year period.
Current wording
Our adjusted net income for the six months ended June 30, 2025 was $75.4 million, or $3.25 per share, compared to $66.1 million, or $2.96 per share, for the same period of 2024. Operating income for the first half of 2025 was $137.1 million, an increase of $16.7 million compared to the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $15.2 million or 12.4 percent compared to the prior-year period. The increase in adjusted gross margin in the first half of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, natural gas organic growth, increased customer consumption resulting from year-over-year colder temperatures in our Mid-Atlantic and Ohio service territories, and increased CNG, RNG and LNG services. These increases were partially offset by reduced margin per gallon and related fees in our propane distribution business and a reduced volume of off system sales and service fees. Higher operating expenses were driven largely by the absence of a RSAM adjustment from FCG (representing $5.7 million during the first half of 2024), higher depreciation attributable to growth projects, increased facilities, maintenance and outside services, and increased payroll, benefits and other employee-related expenses. Additional expenses associated with vehicle and insurance related costs also contributed to the increase compared to the prior-year period.
Previous wording
In July 2022, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 2,400 Dts/d of firm service in the St. Cloud, Florida area. As part of this agreement, Peninsula Pipeline constructed a pipeline extension and regulator station for FPU. The extension supports new incremental load due to growth in the area, including providing service, most immediately, to the residential development, Twin Lakes. The expansion also improves reliability and provides operational benefits to FPU’s existing distribution system in the area, supporting future growth. This project was placed into service during July 2023 and generated consistent adjusted gross margin of $0.1 million for the three months ended March 31, 2025. We expect this extension to generate annual adjusted gross margin of approximately $0.6 million in 2025 and annually thereafter.
Current wording
In July 2022, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 2,400 Dts/d of firm service in the St. Cloud, Florida area. As part of this agreement, Peninsula Pipeline constructed a pipeline extension and regulator station for FPU. The extension supports new incremental load due to growth in the area, including providing service, most immediately, to the residential development, Twin Lakes. The expansion also improves reliability and provides operational benefits to FPU’s existing distribution system in the area, supporting future growth. This project was placed into service during July 2023 and generated additional adjusted gross margin of $0.6 million for the three and six months ended June 30, 2025. We expect this extension to generate annual adjusted gross margin of approximately $0.6 million in 2025 and annually thereafter.
Previous wording
In August 2022, Peninsula Pipeline and FPU filed a joint petition with the Florida PSC for approval of its Transportation Service Agreement associated with the Wildlight planned community located in Nassau County, Florida. The project enables us to meet the significant growing demand for service in Yulee, Florida. The agreement enables us to construct the project during the build-out of the community and charge the reservation rate as each phase of the project goes into service. Construction of the pipeline facilities will occur in two separate phases. Phase one consists of three extensions with associated facilities, and a gas injection interconnect with associated facilities. Phase two will consist of two additional pipeline extensions. The petition was approved by the Florida PSC in November 2022. The various phases of the project commenced in the first quarter of 2023, with construction on the overall project continuing through 2025. The project generated additional adjusted gross margin of $0.3 million for the three months ended March 31, 2025 and is expected to contribute adjusted gross margin of approximately $3.0 million in 2025 and $4.3 million annually thereafter.
Current wording
In August 2022, Peninsula Pipeline and FPU filed a joint petition with the Florida PSC for approval of its Transportation Service Agreement associated with the Wildlight planned community located in Nassau County, Florida. The petition was approved by the Florida PSC in November 2022. The project enables us to meet the significant growing demand for service in Yulee, Florida. The agreement enables us to construct the project during the build-out of the community and charge the reservation rate as each phase of the project goes into service. Construction of the pipeline facilities will occur in two separate phases. Phase one consists of three extensions with associated facilities, and a gas injection interconnect with associated facilities. Phase two will consist of two additional pipeline extensions. The various phases of the project commenced in the first quarter of 2023, with construction on the overall project continuing through 2025. The project generated additional adjusted gross margin of $0.3 million and $0.6 million for the three and six months ended June 30, 2025, respectively, and is expected to contribute adjusted gross margin of approximately $3.0 million in 2025 and $4.3 million annually thereafter.
Previous wording
In April 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 8,000 Dts/d of firm service in the Newberry, Florida area. The petition was approved by the Florida PSC in the third quarter of 2023. Peninsula Pipeline will construct a pipeline extension, which will be used by FPU to support the development of a natural gas distribution system to provide gas service to the City of Newberry. A filing to address the acquisition and conversion of existing Company-owned propane community gas systems in Newberry was made in November 2023. The Florida PSC approved it in April 2024, and conversions of the community gas systems commenced in the second quarter of 2024. The project generated additional adjusted gross margin of $0.6 million for the three months ended March 31, 2025, and is expected to contribute adjusted gross margin of approximately $2.6 million in 2025 and annually thereafter.
Current wording
In April 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreement with FPU for an additional 8,000 Dts/d of firm service in the Newberry, Florida area. The petition was approved by the Florida PSC in the third quarter of 2023. Peninsula Pipeline will construct a pipeline extension, which will be used by FPU to support the development of a natural gas distribution system to provide gas service to the City of Newberry. A filing to address the acquisition and conversion of existing Company-owned propane community gas systems in Newberry was made in November 2023. The Florida PSC approved it in April 2024. Conversions of the community gas systems commenced in the second quarter of 2024 and are projected to be complete in the third quarter of 2025. The project generated additional adjusted gross margin of $0.5 million and $1.1 million for the three and six months ended June 30, 2025, respectively, and is expected to contribute adjusted gross margin of approximately $2.6 million in 2025 and annually thereafter.
Previous wording
In August 2023, Eastern Shore filed an application with the FERC requesting authorization to construct the Worcester Resiliency Upgrade, which consists of a mixture of storage and transmission facilities in Sussex County, DE and Wicomico, Worcester, and Somerset Counties in Maryland. The project will provide long-term incremental supply necessary to support the growing demand of the participating shippers. In January 2025, the FERC approved the project, and construction is expected to be complete in the second quarter of 2026. The project is expected to contribute adjusted gross margin of approximately $9.1 million in 2026.
Current wording
In August 2023, Eastern Shore filed an application with the FERC requesting authorization to construct the Worcester Resiliency Upgrade, which consists of a mixture of storage and transmission facilities in Sussex County, Delaware and Wicomico, Worcester, and Somerset Counties in Maryland. The project will provide long-term incremental supply necessary to support the growing demand of the participating shippers. In January 2025, the FERC approved the project, and construction is expected to be complete in the second quarter of 2026.
Previous wording
In December 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities on the East Coast of Florida. The projects are driven by the need for increased supply to coastal portions of the state that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/d and 3,400 Dts/d, respectively. The Florida PSC approved the projects in March 2024. Construction is projected to be complete in the second and fourth quarters of 2025 for New Smyrna Beach and Boynton Beach, respectively. The projects generated additional adjusted gross margin of $0.5 million for the three months ended March 31, 2025 and are expected to contribute adjusted gross margin of approximately $4.7 million in 2025 and $6.0 million annually thereafter.
Current wording
In December 2023, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities on the East Coast of Florida. The projects are driven by the need for increased supply to coastal portions of the state that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system in the areas of Boynton Beach and New Smyrna Beach with an additional 15,000 Dts/d and 3,400 Dts/d, respectively. The Florida PSC approved the projects in March 2024. New Smyrna Beach was placed into service during May 2025 and construction is projected to be complete for Boynton Beach in the fourth quarter of 2025. The projects generated adjusted gross margin of $1.2 million and $1.7 million for the three and six months ended June 30, 2025, respectively, and are expected to contribute adjusted gross margin of approximately $4.6 million in 2025 and $6.0 million annually thereafter.
Previous wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities located in Central Florida. The projects are driven by the need for increased supply to communities in central Florida that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system around the Plant City and Lake Mattie areas of Florida with an additional 5,000 Dts/d and 8,700 Dts/d, respectively. The Florida PSC approved the projects in May 2024. The Plant City project was completed in the fourth quarter of 2024, and the Lake Mattie project is projected to be completed during the fourth quarter of 2025. The completed project generated additional adjusted gross margin of $0.3 million for the three months ended March 31, 2025 and both projects are expected to contribute total adjusted gross margin of approximately $2.0 million in 2025 and $4.3 million annually thereafter.
Current wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of its Transportation Service Agreements with FPU for projects that will support additional supply to communities located in Central Florida. The projects are driven by the need for increased supply to communities in central Florida that are experiencing significant population growth. Peninsula Pipeline will construct several pipeline extensions which will support FPU’s distribution system around the Plant City and Lake Mattie areas of Florida with an additional 5,000 Dts/d and 8,700 Dts/d, respectively. The Florida PSC approved the projects in May 2024. The Plant City project was completed in the fourth quarter of 2024, and the Lake Mattie project went into service in July 2025. The project generated additional adjusted gross margin of $0.3 million and $0.6 million for the three and six months ended June 30, 2025, respectively, and both projects are expected to contribute total adjusted gross margin of approximately $2.6 million in 2025 and $4.3 million annually thereafter.
Previous wording
In July 2024, we announced plans to extend Eastern Shore's transmission deliverability by constructing an additional 4.4 miles of six inch steel pipeline. The project will reinforce the supply and growth for our Delaware division distribution system and expand natural gas service further into Maryland for anticipated future growth. This project was placed into service during the fourth quarter of 2024, generated additional adjusted gross margin of $0.5 million for the three months ended March 31, 2025, and is expected to contribute adjusted gross margin of approximately $1.9 million in 2025 and annually thereafter.
Current wording
In July 2024, we announced plans to extend Eastern Shore's transmission deliverability by constructing an additional 4.4 miles of six inch steel pipeline. The project will reinforce the supply and growth for our Delaware division distribution system and expand natural gas service further into Maryland for anticipated future growth. This project was placed into service during the fourth quarter of 2024, generated additional adjusted gross margin of $0.5 million and $1.0 million for the three and six months ended June 30, 2025, respectively, and is expected to contribute adjusted gross margin of approximately $1.9 million in 2025 and annually thereafter.
Previous wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for its approval of its Transportation Service Agreements with FCG for projects that will support the transportation of additional renewable energy supply to FCG. The projects, located in Florida’s Brevard, Indian River and Miami-Dade counties, will bring renewable natural gas produced from local landfills into FCG’s natural gas distribution system. Peninsula Pipeline will construct several pipeline extensions which will support FCG's distribution system in Brevard County, Indian River County, and Miami-Dade County. Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility. The Florida PSC approved the petition at its July 2024 meeting with the projects estimated to be completed throughout 2025. These three renewable projects are projected to generate total adjusted gross margin of approximately $4.5 million in 2025 and $6.7 million annually thereafter.
Current wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for its approval of its Transportation Service Agreements with FCG for projects that will support the transportation of additional renewable energy supply to FCG. The projects, located in Florida’s Brevard, Indian River and Miami-Dade counties, will bring renewable natural gas produced from local landfills into FCG’s natural gas distribution system. Peninsula Pipeline will construct several pipeline extensions which will support FCG's distribution system in Brevard County, Indian River County, and Miami-Dade County. Benefits of these projects include increased gas supply to serve expected FCG growth, strengthened system reliability and additional system flexibility. The Florida PSC approved the petition at its July 2024 meeting with the projects estimated to be completed in the first half of 2026. These three renewable projects generated adjusted gross margin of $0.5 million for the three and six months ended June 30, 2025 and are projected to generate total adjusted gross margin of approximately $2.5 million in 2025 and $4.6 million annually thereafter.
Previous wording
In September 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of the Transportation Service Agreement with FCG for a series of projects that will enhance the infrastructure in Miami-Dade county. The proposed expansion consists of the development of several pipeline projects to support growth and support FCG's distribution system in the area and also enhance FCG's ability to obtain gas from various access points in the Miami-Dade county area. The expansion was approved in February 2025 and construction is expected to be complete in the second half of 2025. The expansion is expected to contribute adjusted gross margin of approximately $0.6 million in 2025 and $3.6 million annually thereafter.
Current wording
In September 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of the Transportation Service Agreement with FCG for a series of projects that will enhance the infrastructure in Miami-Dade county. The proposed expansion consists of the development of several pipeline projects to support growth and support FCG's distribution system in the area and also enhance FCG's ability to obtain gas from various access points in the Miami-Dade county area. The expansion was approved in February 2025 and the projects are expected to be in service in the third quarter of 2025. The expansion is expected to contribute adjusted gross margin of approximately $2.8 million in 2025 and $7.6 million annually thereafter.
Previous wording
We estimate annual adjusted gross margin, including amounts attributable to the Full Circle Dairy and Noble Road projects described below, of approximately $20.0 million in 2025 and $20.7 million in 2026 for these transportation related services, with potential for additional growth in future years.
Current wording
We estimate annual adjusted gross margin, including amounts attributable to the Full Circle Dairy and Noble Road projects described below, of approximately $22.0 million in 2025 and $22.7 million in 2026 for these transportation related services, with potential for additional growth in future years.
Previous wording
In February 2023, FPU filed a petition with the Florida PSC for approval of the GUARD program. GUARD is a ten-year program to enhance the safety, reliability, and accessibility of portions of our natural gas distribution system. We identified various categories of projects to be included in GUARD, which include the relocation of mains and service lines located in rear easements and other difficult to access areas to the front of the street, the replacement of problematic distribution mains, service lines, and maintenance and repair equipment and system reliability projects. In August 2023, the Florida PSC approved the GUARD program, which included $205.0 million of capital expenditures projected to be spent over a 10-year period. For the three months ended March 31, 2025, there was$0.9 million of incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $6.9 million of adjusted gross margin in 2025 and $9.9 million in 2026.
Current wording
In February 2023, FPU filed a petition with the Florida PSC for approval of the GUARD program. GUARD is a ten-year program to enhance the safety, reliability, and accessibility of portions of our natural gas distribution system. We identified various categories of projects to be included in GUARD, which include the relocation of mains and service lines located in rear easements and other difficult to access areas to the front of the street, the replacement of problematic distribution mains, service lines, and maintenance and repair equipment and system reliability projects. In August 2023, the Florida PSC approved the GUARD program, which included $205.0 million of capital expenditures projected to be spent over a 10-year period. For the three and six months ended June 30, 2025, there was$0.8 million and $1.7 million, respectively, of incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $6.9 million of adjusted gross margin in 2025 and $9.9 million in 2026.
Previous wording
In June 2023, the Florida PSC issued the approval order for the continuation of the SAFE program beyond its 2025 expiration date and inclusion of 150 miles of additional mains and services located in rear property easements. The SAFE program is designed to relocate certain mains and facilities associated with rear lot easements to street front locations to improve FCG's ability to inspect and maintain the facilities and reduce opportunities for damage and theft. In the same order, the Florida PSC approved a replacement of 160 miles of pipe that was used in the 1970s and 1980s and shown through industry research to exhibit premature failure in the form of cracking. The program includes projected capital expenditures of $205.0 million over a 10-year period. For the three months ended March 31, 2025, there was$1.3 millionof incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $8.5 million of adjusted gross margin in 2025 and $12.0 million in 2026.
Current wording
In June 2023, the Florida PSC issued the approval order for the continuation of the SAFE program beyond its 2025 expiration date and inclusion of 150 miles of additional mains and services located in rear property easements. The SAFE program is designed to relocate certain mains and facilities associated with rear lot easements to street front locations to improve FCG's ability to inspect and maintain the facilities and reduce opportunities for damage and theft. In the same order, the Florida PSC approved a replacement of 160 miles of pipe that was used in the 1970s and 1980s and shown through industry research to exhibit premature failure in the form of cracking. The program includes projected capital expenditures of $205.0 million over a 10-year period. For the three and six months ended June 30, 2025, there was$1.5 million and $2.8 million, respectively, of incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $8.5 million of adjusted gross margin in 2025 and $12.0 million in 2026.
Previous wording
In December 2024, Eastern Shore submitted a filing with the FERC regarding a capital cost surcharge to recover capital costs associated with the replacement of existing Eastern Shore facilities because of mandated highway relocation projects as well as compliance with PHMSA regulation. The capital cost surcharge mechanism was approved in Eastern Shore's last rate case. In conjunction with the filing of this surcharge, a cumulative adjustment to the existing surcharge to reflect additional depreciation was included. The FERC issued an order approving the surcharge as filed in December 2024. The combined revised surcharge became effective January 1, 2025. In March 2025, Eastern Shore submitted an annual true-up filing with the FERC regarding a capital cost surcharge to recover capital costs associated with the replacement of existing Eastern Shore facilities because of mandated highway relocation projects as well as compliance with a PHMSA regulation. There was no impact to the currently effective surcharge as a result of this filing. The FERC issued an order approving the surcharge as filed effective April 1, 2025. For the three months ended March 31, 2025, there was $0.7 million of incremental adjusted gross margin generated pursuant to the program. Eastern Shore expects to produce adjusted gross margin of approximately $5.7 million in 2025 and $7.1 million in 2026 from relocation projects, which is ultimately dependent upon the timing of filings and the completion of construction.
Current wording
In December 2024, Eastern Shore submitted a filing with the FERC regarding a capital cost surcharge to recover capital costs associated with the replacement of existing Eastern Shore facilities because of mandated highway relocation projects as well as compliance with PHMSA regulation. The capital cost surcharge mechanism was approved in Eastern Shore's last rate case. In conjunction with the filing of this surcharge, a cumulative adjustment to the existing surcharge to reflect additional depreciation was included. The FERC issued an order approving the surcharge as filed in December 2024. The combined revised surcharge became effective January 1, 2025. In March 2025, Eastern Shore submitted an annual true-up filing with the FERC regarding a capital cost surcharge to recover capital costs associated with the replacement of existing Eastern Shore facilities because of mandated highway relocation projects as well as compliance with a PHMSA regulation. There was no impact to the currently effective surcharge as a result of this filing. The FERC issued an order approving the surcharge as filed effective April 1, 2025. For the three and six months ended June 30, 2025, there was$0.6 million and $1.3 million, respectively, of incremental adjusted gross margin generated pursuant to the program. Eastern Shore expects to generate adjusted gross margin of approximately $5.7 million in 2025 and $7.1 million in 2026 from relocation projects, which is ultimately dependent upon the timing of filings and the completion of construction.
Previous wording
In 2020, the Florida PSC implemented the Storm Protection Plan ("SPP") and Storm Protection Plan Cost Recovery Clause ("SPPCRC"), which require electric utilities to petition the Florida PSC for approval of a Transmission and Distribution Storm Protection Plan that covers the utility’s immediate 10-year planning period with updates to the plan at least every 3 years. The SPPCRC rules allow the utility to file for recovery of associated costs related to its SPP. Our Florida electric distribution operation's SPP and SPPCRC were filed during the first quarter of 2022 and approved in the fourth quarter of 2022, with modifications, by the Florida PSC. In October 2024, the Florida PSC approved the Company's projected 2025 SPP costs for both capital and operating expenses. For the three months ended March 31, 2025, this initiative generated additional adjusted gross margin of$0.5 million and is expected to generate$5.9 million of adjusted gross margin in 2025 and$8.8 million in 2026. We expect continued investment under the SPP going forward.
Current wording
In 2020, the Florida PSC implemented the Storm Protection Plan ("SPP") and Storm Protection Plan Cost Recovery Clause ("SPPCRC"), which require electric utilities to petition the Florida PSC for approval of a Transmission and Distribution Storm Protection Plan that covers the utility’s immediate 10-year planning period with updates to the plan at least every 3 years. The SPPCRC rules allow the utility to file for recovery of associated costs related to its SPP. Our Florida electric distribution operation's SPP and SPPCRC were filed during the first quarter of 2022 and approved in the fourth quarter of 2022, with modifications, by the Florida PSC. In October 2024, the Florida PSC approved the Company's projected 2025 SPP costs for both capital and operating expenses. For the three and six months ended June 30, 2025, this initiative generated additional adjusted gross margin of $0.8 million and$1.3 million, respectively, and is expected to generate$5.9 million of adjusted gross margin in 2025 and$8.8 million in 2026. We expect continued investment under the SPP going forward.
Previous wording
In January 2024, our natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, the “Maryland natural gas distribution businesses”) filed a joint application for a natural gas rate case with the Maryland PSC. In connection with the application, we sought approval of the following: (i) permanent rate relief of approximately $6.9 million with a ROE of 11.5 percent; (ii) authorization to make certain changes to tariffs to include a unified rate structure and to consolidate the Maryland natural gas distribution businesses; and (iii) authorization to establish a rider for recovery of the costs associated with our new technology systems. In August 2024, the Maryland natural gas distribution businesses, the Maryland OPC and PSC staff reached a settlement which provided for, among other things, an increase in annual base rates of $2.6 million. In September 2024, the Maryland Public Utility Judge issued an order approving the related settlement agreement in part. The $2.6 million increase in annual base rates was approved and the Company filed a Phase II filing in November 2024 to determine rate design across the Maryland natural gas distribution businesses, consolidation of the applicable tariffs and recovery of technology costs. The hearing was held in March 2025, during which Phase II was approved, including an additional $0.9 million in revenue requirement for a total cumulative increase of $3.5 million. A final order was issued in April 2025 and included approval of the consolidation of the operations of CUC-Maryland Division, Sandpiper Energy, and Elkton Gas into one entity which was renamed and will operate as Chesapeake Utilities of Maryland, Inc. The proceeding is expected to result in additional adjusted gross margin of approximately $2.0 million in 2025 and $3.5 million annually thereafter.
Current wording
In January 2024, our natural gas distribution businesses in Maryland, CUC-Maryland Division, Sandpiper Energy, Inc., and Elkton Gas Company (collectively, the “Maryland natural gas distribution businesses”) filed a joint application for a natural gas rate case with the Maryland PSC. In connection with the application, we sought approval of the following: (i) permanent rate relief of approximately $6.9 million with a ROE of 11.5 percent; (ii) authorization to make certain changes to tariffs to include a unified rate structure and to consolidate the Maryland natural gas distribution businesses; and (iii) authorization to establish a rider for recovery of the costs associated with our new technology systems. In August 2024, the Maryland natural gas distribution businesses, the Maryland OPC and PSC staff reached a settlement which provided for, among other things, an increase in annual base rates of $2.6 million. In September 2024, the Maryland Public Utility Judge issued an order approving the related settlement agreement in part. The $2.6 million increase in annual base rates was approved and the Company filed a Phase II filing in November 2024 to determine rate design across the Maryland natural gas distribution businesses, consolidation of the applicable tariffs and recovery of technology costs. The hearing was held in March 2025, during which Phase II was approved, including an additional $0.9 million in revenue requirement, for a total cumulative increase of $3.5 million. A final order was issued in April 2025 and included approval of the consolidation of the operations and the assets of CUC-Maryland Division, Sandpiper Energy, and Elkton Gas into one entity which was renamed and will operate as Chesapeake Utilities of Maryland, Inc. For the three and six months ended June 30, 2025, there was$0.6 millionof incremental adjusted gross margin generated and the proceeding is expected to result in additional adjusted gross margin of approximately $2.0 million in 2025 and $3.5 million annually thereafter.
Previous wording
In August 2024, our Delaware natural gas division filed an application for a natural gas rate case with the Delaware PSC seeking approval of the following: (i) permanent rate relief of approximately $12.1 million with a ROE of 11.5 percent; (ii) proposed changes to depreciation rates which were part of a depreciation study also submitted with the filing; and (iii) authorization to make certain changes to tariffs. Annualized interim rates were approved by the Delaware PSC in the amount of $2.5 million and became effective October 2024. A settlement among the Company, PSC staff and the Delaware Division of the Public Advocate was reached providing an annual revenue increase of $6.1 million, dividing the rate case into two phases and suspending the procedural schedule. The related, fully executed settlement agreement has been filed in the docket and awaits Delaware PSC approval, with a hearing scheduled in May 2025. Interim rates, set to recover the $6.1 million increase, went into effect in March 2025. A procedural schedule is pending in Phase II which will address tariff-related changes including rate design. For the three months ended March 31, 2025, there was$0.8 millionof incremental adjusted gross margin generated and final rates are expectedto generate approximately $4.7 million of adjusted gross margin in 2025 and $6.1 million in 2026.
Current wording
In August 2024, our Delaware natural gas division filed an application for a natural gas rate case with the Delaware PSC seeking approval of the following: (i) permanent rate relief of approximately $12.1 million with a ROE of 11.5 percent; (ii) proposed changes to depreciation rates which were part of a depreciation study also submitted with the filing; and (iii) authorization to make certain changes to tariffs. Annualized interim rates were approved by the Delaware PSC in the amount of $2.5 million and became effective in October 2024. A settlement among the Company, PSC staff and the Delaware Division of the Public Advocate was reached and approved by the Delaware PSC in June 2025 providing an annual revenue increase of $6.1 million, as well as dividing the rate case into two phases. Rates set to recover the approved components of the increase were effective in March 2025. Phase II of the rate case which will address tariff-related changes including rate design began in July 2025. For the three and six months ended June 30, 2025, there was$1.4 million and $2.2 million, respectively, of incremental adjusted gross margin generated and final rates are expectedto generate approximately $4.0 million of adjusted gross margin in 2025 and $6.1 million in 2026.
Previous wording
In August 2024, our Florida Electric division filed a petition with the Florida PSC seeking a general base rate increase of $12.6 million with a ROE of 11.3 percent based on a 2025 projected test year. Annualized interim rates of approximately $1.8 million were approved with an effective date of November 1, 2024. In March 2025, the Florida PSC approved the permanent rate increase, but the order was subsequently protested. In May 2025, the Company reached a settlement agreement with the interested parties to resolve all outstanding issues in its current base rate case, which was filed as a joint motion for approval with the Florida PSC. This settlement allows for a total revenue increase of approximately $8.6 million on an annual basis. The Company anticipates this agreement to be on the Florida PSC hearing agenda for review and approval in June 2025. For the three months ended March 31, 2025, there was $0.7 million of incremental adjusted gross margin generatedand final rates are expectedto generate approximately $7.1 million of adjusted gross margin in 2025 and $8.6 million in 2026.
Current wording
In August 2024, our Florida Electric division filed a petition with the Florida PSC seeking a general base rate increase of $12.6 million with a ROE of 11.3 percent based on a 2025 projected test year. Annualized interim rates of approximately $1.8 million were approved with an effective date of November 1, 2024. In March 2025, the Florida PSC approved the permanent rate increase, but the order was subsequently protested. In May 2025, the Company reached a settlement agreement with the interested parties to resolve all outstanding issues in its current base rate case, which was filed as a joint motion for approval with the Florida PSC. This settlement which was approved by the Florida PSC in July 2025, provides for a total revenue increase of approximately $8.6 million on an annual basis, with $1.0 million of the increase deferred from the first year's base rate increase and recovered over three years. A step-up rate increase was also approved for up to $0.7 million, upon completion of the purchase and refurbishment of certain substations, which is expected in December 2026. The settlement was approved by the Florida PSC in July 2025. For the three and six months ended June 30, 2025, there was $2.1 million and $2.8 million, respectively, of incremental adjusted gross margin generatedand final rates are expectedto generate approximately $7.1 million of adjusted gross margin in 2025 and $8.6 million in 2026.
Previous wording
For the three months ended March 31, 2025, higher consumption which includes the effects of colder weather conditions, largely in our Ohio and Delmarva service areas, compared to the prior-year period resulted in a$5.5 million increase in adjusted gross margin.
Current wording
For the six months ended June 30, 2025, increased customer consumption, which includes the effects of colder weather conditions, largely in our Ohio and Delmarva service areas, compared to the prior-year period resulted in a$5.7 million increase in adjusted gross margin.
Previous wording
The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three months ended March 31, 2025 and 2024.
Current wording
The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three and six months ended June 30, 2025 and 2024.
Previous wording
The average number of residential customers served on the Delmarva Peninsula and at our Florida natural gas distribution business increased by approximately 4.0 percent and 3.0 percent, respectively, for the three months ended March 31, 2025.
Current wording
The average number of residential customers served on the Delmarva Peninsula increased by approximately 4.4 percent and 4.2 percent, for the three and six months ended June 30, 2025, respectively, while the Company's Florida natural gas distribution service territories increased by approximately 2.9 percent and 3.0 percent, for the three and six months ended June 30, 2025, respectively.
Previous wording
Interim Rates from Recent Rate Case Activities
Current wording
Rate Changes Associated with Recent Rate Case Activities
Previous wording
Interim rates associated with the Delaware natural gas rate case and Florida Electric base rate case contributed additional adjusted gross margin of $1.5 million for the three months ended March 31, 2025. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Current wording
Rate changes associated with the Delaware and Maryland natural gas rate cases and Florida Electric base rate case contributed additional adjusted gross margin of $4.1 million for the three months ended June 30, 2025. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Previous wording
We generated increased adjusted gross margin of $2.2 million for the three months ended March 31, 2025 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
Current wording
We generated increased adjusted gross margin of $3.9 million for the three months ended June 30, 2025 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
Previous wording
Regulated infrastructure programs generated incremental adjusted gross margin of $3.4 million in the first quarter of 2025. The increase in adjusted gross margin was primarily related to FCG's SAFE program, Florida's GUARD program, Eastern Shore's Capital Cost Surcharge program, and FPU Electric's SPP. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Current wording
Regulated infrastructure programs generated incremental adjusted gross margin of $3.7 million in the second quarter of 2025. The increase in adjusted gross margin was primarily related to FCG's SAFE program, Florida Natural Gas' GUARD program, Eastern Shore's Capital Cost Surcharge program, and FPU Electric's SPP. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Previous wording
We generated additional adjusted gross margin of $2.2 million from natural gas customer growth. Adjusted gross margin increased by $1.5 million for our Florida natural gas distribution service territories and $0.7 million on the Delmarva Peninsula for the three months ended March 31, 2025, as compared to the same period in 2024, due primarily to residential customer growth of 3.0 percent and 4.0 percent in Florida and on the Delmarva Peninsula, respectively.
Current wording
We generated additional adjusted gross margin of $1.8 million from natural gas customer growth. Adjusted gross margin increased by $1.4 million for our Florida natural gas distribution service territories and $0.4 million on the Delmarva Peninsula for the three months ended June 30, 2025, as compared to the same period in 2024, due to residential customer growth of 2.9 percent and 4.4 percent in Florida and on the Delmarva Peninsula, respectively, as well as growth attributable to commercial and industrial customers.
Previous wording
Increased customer consumption, inclusive of weather-related consumption, contributed additional adjusted gross margin of $0.7 million for the three months ended March 31, 2025.
Current wording
Increased customer consumption, inclusive of weather-related consumption, contributed additional adjusted gross margin of $1.1 million for the three months ended June 30, 2025.
Previous wording
Operating income for the Regulated Energy segment for the first quarter of 2025 was $60.5 million, an increase of $2.4 million or 4.1 percent, over the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $1.8 million or 3.1 percent compared to the same period in 2024. Higher operating income reflects incremental margin from regulatory initiatives and infrastructure programs, organic growth in our natural gas distribution businesses, and pipeline expansion projects. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $7.8 million was largely attributable to the absence of a RSAM adjustment from FCG, increased payroll, benefits and other employee-related expenses, and higher depreciation attributable to growth projects.
Current wording
Operating income for the Regulated Energy segment for the six months ended June 30, 2025 was $112.3 million, an increase of $13.7 million or 13.9 percent, over the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $12.2 million, or 12.1 percent, compared to the same period in 2024. Higher operating income reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, organic growth in our natural gas distribution businesses and increased customer consumption. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $11.8 million was largely attributable to the absence of a $5.7 million RSAM adjustment from FCG, higher depreciation attributable to growth projects and expenses associated with facilities, maintenance and outside services.
Previous wording
Items contributing to the quarter-over-quarter increase in operating expenses are listed in the following table:
Current wording
Items contributing to the period-over-period increase in operating expenses are listed in the following table:
Previous wording
•Increased level of virtual pipeline services - Adjusted gross margin increased by $3.6 million during the first quarter of 2025 as compared to the same period in the prior year due to higher levels of CNG and RNG hold services.
Current wording
•Increased level of CNG, RNG and LNG services - Adjusted gross margin increasedby $3.5 million during the second quarter of 2025 as compared to the same period in the prior year due to higher levels of CNG and RNG hold services and contributions from our Full Circle Dairy RNG facility.
Previous wording
•Increased customer consumption -Adjusted gross margin increased by $0.6 million due to increased customer consumption during the current year primarily related to year-over-year colder weather in our Ohio service area.
Current wording
•Increased customer consumption -Adjusted gross margin increased by$0.4 million due to increased customer consumption during the current year primarily related to year-over-year colder weather in our Ohio service area.
Previous wording
Operating results for the Unregulated Energy segment for the first quarter of 2025 reflect a $4.9 million improvement compared to the same period in 2024. The increase in adjusted gross margin in the Unregulated Energy segment during the first quarter of 2025 was primarily due to increased consumption in our propane distribution business as well as increased levels of virtual pipeline services. These improvements were partially offset by an increase in operating expenses which included higher payroll, benefits and other employee-related expenses as well as increased facilities and maintenance costs compared to the prior-year period.
Current wording
Operating results for the Unregulated Energy segment for the for the six months ended June 30, 2025 reflect a $3.0 million improvement compared to the same period in 2024. The increase in adjusted gross margin in the Unregulated Energy segment during the first half of 2025 was primarily due to increased levels of CNG, RNG and LNG services as well as increased consumption in our propane distribution business and at Aspire Energy. These improvements were partially offset by an increase in operating expenses which included higher payroll, benefits and other employee-related expenses and increased facilities, maintenance and outside service costs. Higher depreciation, amortization and property tax costs compared to the prior-year period also contributed to the increase in operating expenses.
Previous wording
•Propane customer consumption -Adjusted gross margin increased by $4.2 million due to increased customer consumption resulting primarily from colder year-over-year weather in our Delmarva service territory.
Current wording
•Propane customer consumption -Adjusted gross margin increased by $2.9 million due to increased customer consumption resulting primarily from colder year-over-year weather in our Delmarva service territory.
Previous wording
•Increased propane margins and service fees -Adjustedg ross margin increased by $0.4 million for the three months ended March 31, 2025, mainly due to increased margins and customer service fees. These market conditions, which include market pricing and competition with other propane suppliers, as well as the availability and price of alternative energy sources, may fluctuate based on changes in demand, supply and other energy commodity prices.
Current wording
•Decreased propane margins and service fees -Adjustedg ross margin decreased by $0.6 million for the six months ended June 30, 2025, mainly due to decreased margins and customer service fees. These market conditions, which include market pricing and competition with other propane suppliers, as well as the availability and price of alternative energy sources, may fluctuate based on changes in demand, supply and other energy commodity prices.
Showing the first 40 of 65 pairs. Open the source sections for the rest.
Rearranged current paragraphs (21)
Current report — wording carried from elsewhere
(1)Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transition services, consulting, system integration, rebranding and legal fees.
Current report — wording carried from elsewhere
Key variances between the six months ended June 30, 2024 and June 30, 2025 included:
Current report — wording carried from elsewhere
(1) Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from the Company’s non-GAAP
Current report — wording carried from elsewhere
measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures.
Current report — wording carried from elsewhere
(3) Reflects the impact of common shares issued under the DRIP and ATM program.
Current report — wording carried from elsewhere
(1) Adjusted Gross Margin is a non-GAAP measure utilized by management to review business unit performance. For a more detailed discussion on the differences between Gross Margin (GAAP) and Adjusted Gross Margin, see the Reconciliation of GAAP to Non-GAAP Measures presented above.
Current report — wording carried from elsewhere
(2)Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to, transition services, consulting, system integration, rebranding and legal fees.
Current report — wording carried from elsewhere
Regulated infrastructure programs generated incremental adjusted gross margin of $7.1 million for the six months ended June 30, 2025. The increase in adjusted gross margin was primarily related to FCG's SAFE program, Florida's GUARD program, Eastern Shore's Capital Cost Surcharge program, and FPU Electric's SPP. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
Current report — wording carried from elsewhere
Natural Gas Transmission Service Expansions, including interim services
Current report — wording carried from elsewhere
We generated increased adjusted gross margin of $6.1 million for the six months ended June 30, 2025 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
Current report — wording carried from elsewhere
We generated additional adjusted gross margin of $4.0 million from natural gas customer growth. Adjusted gross margin increased by $2.9 million for our Florida natural gas distribution service territories and $1.1 million on the Delmarva Peninsula for the six months ended June 30, 2025, as compared to the same period in 2024, due to residential customer growth of 3.0 percent and 4.2 percent in Florida and on the Delmarva Peninsula, respectively, as well as growth attributable to commercial and industrial customers.
Current report — wording carried from elsewhere
Increased customer consumption, inclusive of weather-related consumption, contributed additional adjusted gross margin of $1.8 million for the six months ended June 30, 2025.
Current report — wording carried from elsewhere
(1)Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to,
Current report — wording carried from elsewhere
transition services, consulting, system integration, rebranding and legal fees.
Current report — wording carried from elsewhere
The following narrative discussion provides further detail and analysis of the significant items in the table above.
Current report — wording carried from elsewhere
•Decreased propane margins and service fees -Adjustedg ross margin decreased by $1.0 million during the second quarter of 2025, mainly due to decreased margins and customer service fees. These market conditions, which include market pricing and competition with other propane suppliers, as well as the availability and price of alternative energy sources, may fluctuate based on changes in demand, supply and other energy commodity prices.
Current report — wording carried from elsewhere
(1)Adjusted Gross Margin is a non-GAAP measure utilized by management to review business unit performance. For a more detailed discussion on the differences between Gross Margin (GAAP) and Adjusted Gross Margin, see the Reconciliation of GAAP to Non-GAAP Measures presented above.
Current report — wording carried from elsewhere
The following narrative discussion provides further detail and analysis of the significant items in the table above.
Current report — wording carried from elsewhere
•Increased customer consumption -Adjusted gross margin increased by $1.0 million due to increased customer consumption during the current year primarily related to year-over-year colder weather in our Ohio service area.
Current report — wording carried from elsewhere
Interest charges for the six months ended June 30, 2025 increased by $2.1 million compared to the same period in 2024, attributable primarily to the Senior Notes issued in November 2024. Increased interest expense on higher average outstanding Revolver borrowings also contributed to the increase, partially offset by a lower weighted-average interest rate compared to the prior-year period. The weighted-average interest rate on our Revolver borrowings was 5.1 percent for the six months ended June 30, 2025 compared to 5.9 percent during the prior-year period.
Current report — wording carried from elsewhere
Income tax expense was $27.4 million and $23.4 million for the six months ended June 30, 2025 and June 30, 2024, respectively, resulting in an effective income tax rate of 26.8 percent and 26.6 percent, respectively, during the periods then ended.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Items contributing to the quarter-over-quarter increase in operating expenses are listed in the following table: