Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Corporate Update (October 2016)
18 slides from Newjersey Resources's corporate update, Oct 20, 2016
Slide 1: Key Business Initiatives Update
SAFE, RELIABLE NATURAL GAS AT OUR CORE … AND SO MUCH MORE Key Business Initiatives Update October 20, 2016
Slide 2: Regarding Forward Looking Statements
Regarding Forward Looking Statements Certain statements contained in this presentation are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Ref
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
Disclaimer Regarding Non‐GAAP Financial Measures This presentation includes the non-GAAP measure, Net Financial Earnings (NFE). As an indicator of the Company’s operating performance, this measure should not be considered an alternative to, or more meaningful than, GAAP measures, such as cash flow,
Slide 4: Our Goals for Today
Our Goals for Today Review our base rate case settlement Provide an update on our Southern Reliability Link (SRL) project Review SREC market fundamentals Discuss the impact of the ITC/PTC extensions Provide capital spending and financing plans through fiscal 2019 4 Key Business Initiatives
Slide 5: Base Rate Case
Base Rate Case Approved by NJBPU on September 23, 2016; new base rates effective October 1, 2016 – $45 million revenue increase Required as part of SAFE I infrastructure investment program Provided cash recovery for SAFE I and NGV expenditures Provided a competitive cost of capital of 6.9 pe
Slide 6: Southern Reliability Link
Southern Reliability Link A 30‐mile pipeline to improve system integrity and reliability Will add resiliency to system through a second feed 85 percent of NJNG supply is transported in on a single interstate pipeline system Maintains system pressures in case of a disruption Provides supply
Slide 7: SRL: Progress to Date
SRL: Progress to Date Approvals Received: • NJBPU Construction, operation and route designation approved in January 2016 Finding that SRL is necessary for the safety, welfare and convenience of the public in March 2016 • NJ Department of Environmental Protection (DEP) Flood Hazard Permit‐by‐
Slide 8: New Jersey Clean Energy Market
New Jersey Clean Energy Market RPS Renewable Portfolio Standard SACP Solar Alternative Compliance Payment Compliance Options SREC Market • Increased RPS • Reset SACP • Penalty for RPS non‐ compliance • Sets ceiling on SREC values • Own solar assets • Purchase Solar Renewable Energy Certificates (SRE
Slide 9: ITC and PTC Extensions
ITC and PTC Extensions Key Business Initiatives Update 9 Approved by Congress in December 2015 ITC extended for solar projects with sunset provisions (for projects in service within two years of start date) • 30 percent ITC for projects under construction by December 2019 • Declines 4 percentage
Slide 10: What do the ITC/PTC Extensions Mean for NJR Clean Energy Ventures?
What do the ITC/PTC Extensions Mean for NJR Clean Energy Ventures? ITC • Grid‐connected projects, previously uneconomic, now viable • Increases future pipeline of commercial, net‐metered projects • Improves previously‐planned residential solar economics PTC • Expands markets where wind is compet
Slide 11: SREC Market Fundamentals
SREC Market Fundamentals Supply • Number of SRECs available to satisfy RPS Determined based on actual solar generation in NJ Demand • RPS establishes requirement • Basic Generation Service (BGS) auction identifies specific Load Serving Entities (LSEs) and is a significant driver of demand • LSE
Slide 12: Relationship Between BGS Auction and SREC Prices
Relationship Between BGS Auction and SREC Prices $175 $190 $205 $220 $235 $250 $265 $280 $295 Jan‐15 Feb‐15 Mar‐15 Apr‐15 May‐15 Jun‐15 Jul‐15 Aug‐15 Sep‐15 Oct‐15 Nov‐15 Dec‐15 P r i c e SREC Forward Price Curve EY16 EY17 EY18 Final compliance requirement for EY2015 New Energy Year (2016) Key Busin
Slide 13: SREC Hedging Strategy Stabilizes Revenue
SREC Hedging Strategy Stabilizes Revenue 168 167 152 41 173 183 242 270 0 50 100 150 200 250 300 FY16E FY17E FY18E FY19E T h o u s a n d s o f S R E C s Hedged Expected Generated Current Generation Pct. Hedged: 97% 91% 63% 15% Average Price: $214 $230 $226 $221 Current Price (EY): $240 $220 $131 Pla
Slide 14: NJR Clean Energy Ventures Capital Plan
NJR Clean Energy Ventures Capital Plan Key Business Initiatives Update ($MM) 2016F 2017E 2018E 2019E Total Residential Solar $33.7 $35.0 $41.6 $42.9 $153.2 Commercial Solar 54.5 62.6 59.0 69.5 245.6 Subtotal $88.2 $97.6 $100.6 $112.4 $398.8 Wind 91.7 83.4 121.8 81.2 378.1 Total NJRCEV * $179.9 $181.
Slide 15: NJNG Capital Expenditures
NJNG Capital Expenditures Key Business Initiatives Update 15 40 percent of NJNG’s capital expenditures over the next three years will earn an immediate return NJNG is required to file a new base rate case by November 2019 ($MM) 2016F 2017E 2018E 2019E Total New Customer $35.3 $33.3 $34.7 $37.0 $
Slide 16: Cash Flows
Cash Flows 16 Key Business Initiatives Update $MM 2016F 2017E 2018E 2019E Cash Flow from Operations $177.1 $273.8 $247.0 $258.1 Uses of Funds Capital expenditures ‐ NJNG ($203.0) ($275.0) ($239.8) ($188.6) Capital expenditures ‐ Penn East (13.1) (22.3) (149.1) (37.7) Capital expenditures ‐ CEV (165.
Slide 17: Our Path to Future Growth
Our Path to Future Growth Fiscal 2016 NJNG Base rate case completed Customer growth CIP BGSS incentives SAFE Liquefaction in service SAVEGREEN NJ RISE Clean Energy Continued solar and wind investment More SRECs Carroll Area and Medicine Bow wind farms in service Midstream PennEast receiv
Slide 18: Safe, Reliable Natural Gas at Our Core
SAFE, RELIABLE NATURAL GAS AT OUR CORE … AND SO MUCH MORE Key Business Initiatives Update October 20, 2016
New Jersey Resources — Corporate Update (October 2016) on 6ix