CHESAPEAKE UTILITIES CORP
For the period ended Mar 31, 2026. Filed May 6, 2026.
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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.
Mar 31, 2026 · Filed May 6, 2026
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 2025-09-30; filed 2025-11-06.
0001628280-25-050291
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001628280-26-031397
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 273 previous paragraphs and 215 current paragraphs.
128 unchanged; 65 reworded; 20 added; 56 removed; 24 previous and 2 current paragraphs rearranged.
Tables are not compared: 27 previous and 17 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 (20)
Current report
Our adjusted net income for the three months ended March 31, 2026 was $59.3 million, or $2.47 per share, compared to $51.1 million, or $2.22 per share, for the same period in 2025. Operating income for the first three months of 2026 was $99.4 million, an increase of $12.6 million compared to the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $12.3 million or 14.1 percent compared to the prior-year period. The increase in adjusted gross margin in the first quarter of 2026 was primarily driven by incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects and natural gas organic growth, increased customer consumption resulting from year-over-year colder temperatures largely in the Company's Delmarva service areas, and improved performance at Aspire Energy. Higher operating expenses were driven largely by increased payroll, benefits and other employee-related expenses and higher facilities, maintenance costs and outside services compared to the prior-year period. Depreciation and amortization expense for the current period includes decreases related to certain regulatory items including the absence of recovered costs associated with Hurricane Michael and the impact of the FCG depreciation study. These amounts were largely offset by additional depreciation, amortization and property taxes associated with growth.
Current report
(3)The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of
Current report
recovered costs associated with Hurricane Michael.
Current report
Regulatory Initiatives (with recent regulatory actions)
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Florida Mandatory Relocates
Current report
In October 2025, FPU and FCG filed a joint petition for approval to establish a recovery surcharge for actual, estimated and projected relocation costs pursuant to the Florida Administrative Code which enables companies to recover the costs associated with relocating or reconstructing facilities that have been required by governmental entities. The Florida PSC approved the petition in February 2026, with the surcharge effective in March 2026. For the three months ended March 31, 2026, there was $0.5 million of adjusted gross margin generated. The projected total revenue for both 2026 and 2027 is $0.5 million for FPU and $1.0 million for FCG.
Current report
FCG Rate Case
Current report
In April 2026, Florida City Gas filed a petition with the Florida PSC. In connection with the application, we are seeking approval of the following: (i) interim rate relief of approximately $16.2 million, subject to refund, pending the outcome of the rate case proceeding; (ii) general base rate increase of $46.9 million with a ROE of 11.25 percent based on a 2027 projected test year; (iii) reclassification of approximately $16.4 million in the existing SAFE program revenues from surcharge recovery to base rates; (iv) authorization to retain the unamortized portion of the previously approved acquisition adjustment; and (v) further implementation of the advanced metering infrastructure (“AMI”). The outcome of the application will be subject to review and approval by the Florida PSC.
Current report
FCG Depreciation Study
Current report
In February 2025, FCG filed a depreciation study with the Florida PSC. The application requested approval of revised annual depreciation rates, as well as a reduction related to a reserve imbalance that would be amortized over a two-year period. In February 2026, the Florida PSC approved a $6.8 million reserve imbalance to be amortized over the remaining life of the assets.
Current report
The average number of residential customers served on the Delmarva Peninsula, by FPU and by FCG increased by approximately 3.3 percent, 2.2 percent, and 2.0 percent, respectively, for the three months ended March 31, 2026.
Current report
(2)The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael. See Key variances table above for additional information.
Current report
(2)The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael.
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Absence of Recovered Costs Associated with Hurricane Michael
Current report
There is no impact to earnings as this $2.0 million decrease in adjusted gross margin for the three months ended March 31, 2026, is offset by a corresponding decrease in depreciation and amortization expense for the period.
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Operating Expenses
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(1)The current period includes offsetting reductions in both adjusted gross margin and depreciation and amortization expense related to the absence of recovered costs associated with Hurricane Michael.
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Operating Expenses
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The 2026 projection excludes potential acquisitions due to their opportunistic nature.
Current report
•Net borrowings under the Revolver of $42.0 million; and
Removed paragraphs (56)
Previous report
Gross Margin (GAAP) for the Regulated Energy segment for the quarter ended September 30, 2025 was $83.9 million, an increase of $4.7 million, or 5.9 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.
Previous report
Gross Margin (GAAP) for the Unregulated Energy segment for the quarter ended September 30, 2025 was $7.8 million, an increase of $0.6 million, or 8.3 percent, compared to the same period in 2024. The increase in gross margin was primarily attributable to higher CNG, RNG, and LNG services compared to the prior-year period and increased performance from Aspire Energy, partially offset by lower results from our propane distribution business.
Previous report
Net income (GAAP) for the nine months ended September 30, 2025 was $94.2 million, or $4.03 per share, compared to $81.9 million, or $3.66 per share, for the same quarter of 2024. Net income for the nine months ended September 30, 2025 and 2024, included $0.7 million and $2.3 million, respectively, of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $10.7 million or 12.7 percent compared to the prior-year period.
Previous report
Our adjusted net income for the three months ended September 30, 2025 was $19.5 million, or $0.82 per share, compared to $18.1 million, or $0.80 per share, for the same quarter of 2024. Operating income for the third quarter of 2025 was $45.0 million, an increase of $4.1 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 $3.5 million or 8.4 percent compared to the prior-year period. The increase in adjusted gross margin in the third 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 higher depreciation attributable to growth projects and the absence of an RSAM adjustment from FCG (which represented a $3.2 million benefit in the third quarter of 2024). Higher expenses associated with facilities, maintenance and outside services also contributed to the increase.
Previous report
Our adjusted net income for the nine months ended September 30, 2025 was $94.9 million, or $4.06 per share, compared to $84.2 million, or $3.76 per share, for the same period of 2024. Operating income for the first nine months of 2025 was $182.1 million, an increase of $20.8 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 $18.7 million or 11.4 percent compared to the prior-year period. The increase in adjusted gross margin in the first nine months of 2025 was driven by incremental margin from regulatory initiatives and infrastructure programs, natural gas growth and transmission expansion projects, increased CNG, RNG and LNG services, and increased customer consumption resulting from year-over-year colder temperatures in our Mid-Atlantic and Ohio service territories. 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 an RSAM adjustment from FCG (which represented an $8.9 million benefit during the first nine months of 2024) and higher depreciation attributable to growth projects. Higher facilities, maintenance and outside services, insurance, and payroll, benefits and other employee-related expenses compared to the prior-year period also contributed to the increase.
Previous report
(3) Reflects the impact of common shares issued under the DRIP and ATM program.
Previous report
Newberry Expansion
Previous report
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 fourth quarter of 2025. The project generated gross margin of $0.6 million for the three months ended September 30, 2025 and additional adjusted gross margin of $1.1 million for the nine months ended September 30, 2025. It is expected to contribute adjusted gross margin of approximately $2.6 million in 2025 and annually thereafter.
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Warwick Pipeline Project
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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 $1.5 million for the three and nine months ended September 30, 2025, respectively, and is expected to contribute adjusted gross margin of approximately $1.9 million in 2025 and annually thereafter.
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Pioneer Supply Header Pipeline Project
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In March 2024, Peninsula Pipeline filed a petition with the Florida PSC for its approval of Firm Transportation Service Agreements with both FCG and FPU for a project that will support greater supply growth of natural gas service in southeast Florida. The project consists of the transfer of a pipeline asset from FCG to Peninsula Pipeline. Peninsula Pipeline will proceed to provide transportation service to both FCG and FPU using the pipeline asset, which supports continued customer growth and system reinforcement of these distribution systems. The Florida PSC approved the petition in July 2024 and the project was completed in September 2024.
Previous report
We have made a commitment to meet customer demand for CNG, RNG and LNG in the markets we serve. This has included making investments within Marlin Gas Services to be able to transport these products through its virtual pipeline fleet to customers. To date, we have also made an infrastructure investment in Ohio, enabling RNG to fuel a third-party landfill fleet and to transport RNG to end use customers off our pipeline system.
Previous report
We are also involved in various other projects, all at various stages and all with different opportunities to participate across the energy value chain. In many of these projects, Marlin will play a key role in ensuring the RNG is transported to one of our many pipeline systems where it will be injected. We include our RNG transportation services and infrastructure related adjusted gross margin from across the organization in combination with our CNG and LNG projects.
Previous report
We estimate annual adjusted gross margin, including amounts attributable to the Full Circle Dairy and Noble Road projects described below, of approximately $25.5 million in 2025 and $26.5 million in 2026 for these transportation related services, with potential for additional growth in future years.
Previous report
Full Circle Dairy
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In February 2023, we announced plans to construct, own and operate a dairy manure RNG facility at Full Circle Dairy in Madison County, Florida. The project consists of a facility converting dairy manure to RNG and transportation assets to bring the gas to market. The first injection of RNG occurred in the second quarter of 2024.
Previous report
Noble Road Landfill RNG Project
Previous report
In October 2021, Aspire Energy completed construction of its Noble Road Landfill RNG pipeline project, a 33.1-mile pipeline, which transports RNG generated from the Noble Road landfill to Aspire Energy’s pipeline system, displacing conventionally produced natural gas. In conjunction with this expansion, Aspire Energy also upgraded an existing compressor station and installed two new metering and regulation sites. The RNG volume represents more than 10 percent of Aspire Energy’s gas gathering volumes.
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Regulatory Initiatives
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Maryland Natural Gas Depreciation Study
Previous report
In January 2024, our natural gas distribution businesses in Maryland filed a joint petition for approval of its proposed unified depreciation rates with the Maryland PSC. A settlement among the Company, PSC staff and the Maryland OPC was reached and the final order approving the related settlement agreement went into effect in July 2024, with new depreciation rates effective as of January 1, 2023. The approved depreciation rates resulted in an annual reduction in depreciation expense of approximately $1.2 million.
Previous report
Weather was not a significant factor to adjusted gross margin in the third quarter of 2025 compared to the same period in 2024.
Previous report
The average number of residential customers served on the Delmarva Peninsula increased by approximately 4.3 percent for both the three and nine months ended September 30, 2025. The average number of residential customers served by Florida Public Utilities Company increased by approximately 3.5 percent and 3.9 percent for the three and nine months ended September 30, 2025, respectively, while the average number of residential customers served by Florida City Gas increased by approximately 2.2 percent and 2.1 percent for the three and nine months ended September 30, 2025, respectively.
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(2) Includes the absence of an RSAM adjustment from FCG which represented a $3.2 million benefit in the third quarter of 2024.
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(1) Includes the absence of an RSAM adjustment from FCG which represented a $3.2 million benefit in the third quarter of 2024.
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(2)Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to,
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For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:
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(2) Includes the absence of an RSAM adjustment from FCG which represented an $8.9 million benefit during the nine months ended September 30, 2024.
Previous report
Operating income for the Regulated Energy segment for the nine months ended September 30, 2025 was $161.2 million, an increase of $18.6 million or 13.0 percent, over the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $16.5 million, or 11.3 percent, compared to the same period in 2024. Higher operating income reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, and organic growth in our natural gas distribution businesses. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $20.0 million was largely attributable to the absence of an $8.9 million RSAM adjustment from FCG during the prior-year period, higher depreciation attributable to growth projects and expenses associated with facilities, maintenance and outside services and insurance costs.
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Items contributing to the period-over-period increase in adjusted gross margin are listed in the following table:
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Contributions from Regulated Infrastructure Programs
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Natural Gas Distribution Customer Growth
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Changes in Customer Consumption
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Items contributing to the period-over-period increase in operating expenses are listed in the following table:
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(1) Includes the absence of an RSAM adjustment from FCG which represented an $8.9 million benefit during the nine months ended September 30, 2024.
Previous report
(2)Transaction and transition-related expenses represent costs incurred attributable to the acquisition and integration of FCG including, but not limited to,
Previous report
Operating results for the Unregulated Energy segment for the third quarter of 2025 reflect a $0.8 million decrease compared to the same period in 2024. The increase in adjusted gross margin in the Unregulated Energy segment during the third quarter of 2025 was primarily driven by increased levels of CNG, RNG and LNG services and increased performance at Aspire Energy, partially offset by reduced margin per gallon and fees in our propane distribution business. Operating expenses increased due to higher payroll, benefits and employee-related expenses as well as increased facilities, maintenance and outside service costs compared to the prior-year period. Higher depreciation, amortization and property tax costs also contributed to the increase in operating expenses during the quarter.
Previous report
•Change in propane margins and service fees -Adjustedg ross margin decreased by $0.7 million during the third quarter of 2025, mainly due to decreased margins and customer service fees. 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 and can impact our margins.
Previous report
•Increased level of CNG, RNG and LNG services - Adjusted gross margin increased by $3.1 million during the third 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.
Showing the first 40 of 56 passages. Open the source sections for the rest.
Reworded paragraphs (65)
Previous wording
•the outcomes of regulatory, environmental and legal matters, including whether pending matters are resolved within current estimates and whether the related costs are adequately covered by insurance or recoverable in rates;
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•the outcomes of regulatory, environmental and legal matters, including whether pending matters are resolved within current estimates and within expected times, and whether the related costs are adequately covered by insurance or recoverable in rates;
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•the impact of significant changes to current tax regulations and rates, including the impact they may have on our financial positions, results of operations and/or cash flows;
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•the impact of significant changes to tax regulations and rates;
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These commitments guide our mission to deliver energy that makes life better for the people and communities we serve. They impact every aspect of the relationships we have with our stakeholders. Beginning in 2024, we unveiled our first in a continuing series of sustainability micro-reports. We encourage our investors to review the micro-reports, as well as prior sustainability reports, which can be accessed on our website, and welcome feedback as we continue to enhance our sustainability disclosures.
Current wording
These commitments guide our mission to deliver energy that makes life better for the people and communities we serve. They impact every aspect of the relationships we have with our stakeholders. Within our 2025 Annual Report to Shareholders, we continued to highlight our ongoing efforts related to these commitments. We encourage our investors to review the 2025 Annual Report to Shareholders, as well as our prior micro and consolidated sustainability reports, which can be accessed on our website.
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 and nine months ended September 30, 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 months ended March 31, 2026 and 2025:
Previous wording
Gross Margin (GAAP) for the Regulated Energy segment for the nine months ended September 30, 2025 was $267.4 million, an increase of $18.6 million, or 7.5 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 wording
Gross Margin (GAAP) for the Regulated Energy segment for the three months ended March 31, 2026 was $114.9 million, an increase of $17.7 million, or 18.2 percent, compared to the same period in 2025. 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.
Previous wording
Gross Margin (GAAP) for the Unregulated Energy segment for the nine months ended September 30, 2025 was $57.8 million, an increase of $5.2 million, or 9.9 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, higher results from our propane distribution business largely attributable to increased customer consumption from colder year-over-year weather in our Delmarva service territory, and increased performance from Aspire Energy.
Current wording
Gross Margin (GAAP) for the Unregulated Energy segment for the three months ended March 31, 2026 was $42.3 million, an increase of $2.4 million, or 6.0 percent, compared to the same period in 2025. The increase in gross margin was primarily attributable to higher results from our propane distribution business largely attributable to increased customer consumption from colder year-over-year weather in our Delmarva service areas, and increased performance from Aspire Energy.
Previous wording
Net income (GAAP) for the quarter ended September 30, 2025 was $19.4 million, or $0.82 per share, compared to $17.5 million, or $0.78 per share, for the same quarter of 2024. Net income for the three months ended September 30, 2025 and 2024, included $0.1 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 $1.4 million or 7.7 percent compared to the prior-year period.
Current wording
Net income (GAAP) for the three months ended March 31, 2026 was $59.3 million, or $2.47 per share, compared to $50.9 million, or $2.21 per share, for the same quarter of 2025. Net income for the three months ended March 31, 2025 included $0.2 million of transaction and transition-related expenses in connection with the acquisition and integration of FCG. Excluding these costs, net income increased by $8.2 million or 16.0 percent compared to the prior-year period.
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Results of Operations for the Three and Nine Months Ended September 30, 2025
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Results of Operations for the Three Months Ended March 31, 2026
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Key variances between the nine months ended September 30, 2024 and September 30, 2025 included:
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Key variances between the three months ended March 31, 2025 and March 31, 2026 included:
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(3) Reflects the impact of common shares issued under the DRIP and ATM program.
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(4) Reflects the impact of approximately 0.8 million common shares issued under the DRIP/DSSP and ATM program.
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(1) Includes adjusted gross margin attributable to interim rates during 2024 and 2025. See additional information provided below.
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(1) Includes adjusted gross margin attributable to interim and permanent rates. See additional information provided below.
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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 $0.9 million and $1.5 million for the three and nine months ended September 30, 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. We expect this extension to generate annual adjusted gross margin of approximately $0.6 million in 2026 and annually thereafter.
Previous wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of an amendment to its Transportation Service Agreement with FPU for a project that will support additional supply to communities in the St. Cloud, Florida area. The project is driven by the need to expand gas service to future communities that are expected in that area. Peninsula Pipeline will construct pipeline expansions that will allow FPU to serve the expected new growth. The expansion will provide FPU with an additional 10,000 Dts/d. The Florida PSC approved the project in May 2024, and it is expected to be complete in the fourth quarter of 2025. We expect this expansion to generate annual adjusted gross margin of approximately $2.2 million in 2025 and $3.2 million annually thereafter.
Current wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of an amendment to its Transportation Service Agreement with FPU for a project that will support additional supply to communities in the St. Cloud, Florida area. The project is driven by the need to expand gas service to future communities that are expected in that area. Peninsula Pipeline will construct pipeline expansions that will allow FPU to serve the expected new growth. The expansion will provide FPU with an additional 10,000 Dts/d. The Florida PSC approved the project in May 2024, and it is expected to be complete in the second quarter of 2026. For the three months ended March 31, 2026, these projects generated incremental adjusted gross margin of $0.9 million. We expect this expansion to generate approximately $3.2 million in 2026 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 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 gross margin of $0.5 million for the three months ended September 30, 2025 and additional adjusted gross margin of $0.5 million for the nine months ended September 30, 2025. It 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 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, and construction was completed in 2025. The project generated incremental adjusted gross margin of $0.6 million for the three months ended March 31, 2026, and is expected to contribute adjusted gross margin of approximately $4.3 million in 2026 and annually thereafter.
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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. Construction has commenced and the project is expected to be placed into service in mid-2026 dependent on final FERC approval.
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.
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In June 2025, Eastern Shore filed a limited amended application with the FERC requesting revised initial transportation rates for the project. The revised rates reflected increased capital costs associated with unanticipated changes in global markets and supply chains, including the availability of skilled laborers with the requisite certifications to work on this project. 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 wording
In June 2025, Eastern Shore filed a limited amended application with the FERC requesting revised initial transportation rates for the project. The revised rates reflected increased capital costs associated with unanticipated changes in global markets and supply chains, including the availability of skilled laborers with the requisite certifications to work on this project. Eastern Shore requested expedited action by the FERC in relation to this matter and an approved order was issued in July 2025. Construction commenced shortly after approval and is well underway. The weather during the first quarter resulted in several brief slowdowns which had a cumulative impact on the overall timeline. Project construction and commissioning are expected to be complete in the latter part of the year with the FERC approval process to immediately follow. The Company expects to receive full approval for in-service of the facility by the beginning of 2027. The project generated adjusted gross margin of $0.4 million for the three months ended March 31, 2026. The project is expected to contribute adjusted gross margin of approximately $1.5 million in 2026 and $17.1 million in 2027 and annually thereafter.
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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 provide additional supply to coastal communities on the East Coast of Florida, which are experiencing significant population growth. Peninsula Pipeline proposed several pipeline extensions to 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 $1.5 million and $3.2 million for the three and nine months ended September 30, 2025, respectively, and are expected to contribute adjusted gross margin of approximately $4.6 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 have experienced an increase in 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 second quarter of 2026. The projects generated incremental adjusted gross margin of $1.0 million for the three months ended March 31, 2026, and are expected to contribute adjusted gross margin of approximately $6.0 million in 2026 and 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 which are also experiencing significant population growth. Peninsula Pipeline proposed to 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 $0.9 million and $1.5 million for the three and nine months ended September 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.
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's extensions support FPU’s distribution system around the Plant City and Lake Mattie area's of Florida with an additional 5,000 Dts/d and 8,700 Dts/d, respectively. The Florida PSC approved the projects in March 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 projects generated incremental adjusted gross margin of $0.8 million for the three months ended March 31, 2026, and both projects are expected to contribute total adjusted gross margin of approximately $4.3 million in 2026 and annually thereafter.
Previous wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of 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. In October 2025, the Florida PSC approved amendments to the Transportation Service Agreements that were filed to include Peninsula Pipeline as a party to the related interconnection agreements. These three renewable projects generated adjusted gross margin of $1.0 million and $1.5 million for the three and nine months ended September 30, 2025, respectively, and are projected to generate total adjusted gross margin of approximately $2.5 million in 2025 and $5.4 million annually thereafter.
Current wording
In February 2024, Peninsula Pipeline filed a petition with the Florida PSC for approval of 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. In October 2025, the Florida PSC approved amendments to the Transportation Service Agreements that were filed to include Peninsula Pipeline as a party to the related interconnection agreements. The projects are underway and are estimated to be completed in the second half of 2026. These three renewable projects generated adjusted gross margin of $1.3 million for the three months ended March 31, 2026, and are projected to generate total adjusted gross margin of approximately $5.4 million in 2026 and $6.4 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 FCG's distribution system in the area, as well as enhance FCG's access to gas from various points in the Miami-Dade County area. The expansion was approved in February 2025 and interim services began in August 2025 with permanent facilities expected to be in service by the second quarter of 2026. The project generated adjusted gross margin of $0.9 million for the three and nine months ended September 30, 2025 and is expected to contribute adjusted gross margin of approximately $2.8 million in 2025 and $7.6 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 gas infrastructure in Miami-Dade County. The proposed expansion consists of the development of several pipeline projects to support growth and FCG's distribution system, as well as enhance FCG's access to gas from various points in the Miami-Dade County area. The expansion was approved in February 2025 and interim services began in August 2025 with permanent facilities expected to be in service by the second quarter of 2026. The project generated adjusted gross margin of $1.9 million for the three months ended March 31, 2026 and is expected to contribute adjusted gross margin of approximately $7.6 million in 2026 and annually thereafter.
Previous wording
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 wording
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 and is expected to contribute adjusted gross margin of approximately $1.1 million in 2027 and approximately $2.1 million annually thereafter.
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 and nine months ended September 30, 2025, there was$1.0 million and $2.7 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.
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 months ended March 31, 2026, there was $0.9 million of incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $10.1 million of adjusted gross margin in 2026 and $13.0 million in 2027.
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 and nine months ended September 30, 2025, there was$1.2 million and $4.0 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.
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 months ended March 31, 2026, there was $1.1 millionof incremental adjusted gross margin generated pursuant to the program. The program is expected to generate $12.7 million of adjusted gross margin in 2026 and $16.4 million in 2027.
Previous wording
In April 2024, FCG filed a petition with the Florida PSC to more closely align the SAFE Program with FPU's GUARD program. Specifically, the requested modifications will enable FCG to accelerate remediation related to problematic pipe and facilities consisting of obsolete and exposed pipe. These efforts will serve to improve the safety and reliability of service to FCG's customers, and the modifications will result in an estimated additional $50.0 million in capital expenditures associated with the SAFE Program which would increase the total projected capital expenditures to approximately $255.0 million over a 10-year period. The Florida PSC approved the modifications in September 2024.
Current wording
In April 2024, FCG filed a petition with the Florida PSC to more closely align the SAFE Program with FPU's GUARD program. Specifically, the requested modifications enable FCG to accelerate remediation related to problematic pipe and facilities consisting of obsolete and exposed pipe. These modifications will improve the safety and reliability of service to FCG's customers and result in an estimated additional $50.0 million in capital expenditures associated with the SAFE Program, increasing the total projected capital expenditures to approximately $255.0 million over a 10-year period. The Florida PSC approved the modifications in September 2024.
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 and nine months ended September 30, 2025, there was$0.6 million and $1.9 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.
Current wording
In March 2026, 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. The capital cost surcharge mechanism was approved in Eastern Shore's last rate case. There was a slight decrease to the revenue requirement of the currently effective surcharge as a result of the true-up. The FERC issued an order approving the surcharge as filed effective April 1, 2026. For the three months ended March 31, 2026, there was $0.8 millionof incremental adjusted gross margin generated pursuant to the program. Eastern Shore expects to generate adjusted gross margin of approximately $9.0 million in 2026 and $10.1 million in 2027 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 and nine months ended September 30, 2025, this initiative generated additional adjusted gross margin of $1.1 million and$2.4 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.
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 filedand approved in 2022, with modifications, by the Florida PSC. Rates associated with this initiative were effective in January 2023. In October 2024, the Florida PSC approved the Company's projected 2025 SPP costs of$20.4 million for both capital and operating expenses. Our Florida electric distribution operations filed an updated SPP plan in January 2025 which was approved in June 2025, with modifications by the Florida PSC. For the three months ended March 31, 2026, this initiative generated additional adjusted gross margin of $2.2 million and is expected to generate$10.7 million of adjusted gross margin in 2026 and$11.0 million in 2027. 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 and the assets of CUC-Maryland Division, Sandpiper Energy, and Elkton Gas into one entity which was renamed and operates as Chesapeake Utilities of Maryland, Inc. For the three and nine months ended September 30, 2025, there was$0.5 million and $1.1 million, respectively, of incremental adjusted gross margin generated and the proceeding is expected to result in additional adjusted gross margin of approximately $1.5 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 September 2024, the Maryland Public Utility Judge approved a $2.6 million increase in annual base rates, which was followed by the Company submitting 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. In March 2025 the 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 operates as Chesapeake Utilities of Maryland, Inc. For the three months ended March 31, 2026, there was $1.3 million of incremental adjusted gross margin generated and the proceeding is expected to result in additional adjusted gross margin of approximately $3.5 million in 2026 and 2027.
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 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. In October 2025, a settlement among the Company, PSC staff and the Delaware Division of the Public Advocate was reached for Phase II of the rate case addressing tariff-related changes including rate design and approved by the Delaware Public Service Commission with rates effective as of October 15, 2025. For the three and nine months ended September 30, 2025, there was$0.7 million and $2.9 million, respectively, of incremental adjusted gross margin generated and final rates are expectedto generate approximately $4.5 million of adjusted gross margin in 2025 and $6.1 million in 2026.
Current wording
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 all interested parties 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 and approved tariff-related changes including rate design were effective as of October 15, 2025. For the three months ended March 31, 2026, there was $1.3 million of incremental adjusted gross margin generated and final rates are expected to generate approximately $6.1 million of adjusted gross margin in 2026 and 2027.
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 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 nine months ended September 30, 2025, there was $2.4 million and $5.2 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.
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. This settlement which was approved by the Florida PSC in July 2025, provides for a total base rate 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 to be completed in December 2026. For the three months ended March 31, 2026, there was $1.5 million of incremental adjusted gross margin generatedand final rates are expectedto generate approximately $8.6 million of adjusted gross margin in 2026 and $9.1 million in 2027.
Previous wording
For the nine months ended September 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$4.8 million increase in adjusted gross margin.
Current wording
For the three months ended March 31, 2026, increased customer consumption, which includes the effects of colder weather conditions, largely in our Delmarva service areas, compared to the prior-year period resulted in a$4.5 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 and nine months ended September 30, 2025 and 2024.
Current wording
The following table summarizes HDD and CDD variances from the 10-year average HDD/CDD ("Normal") for the three months ended March 31, 2026 and 2025.
Previous wording
Operating income for the Regulated Energy segment for the third quarter of 2025 was $48.9 million, an increase of $4.9 million, or 11.1 percent, over the same period in 2024. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $4.3 million, or 9.6 percent, compared to the same period in 2024. Higher operating income reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, and organic growth in our natural gas distribution businesses. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $8.2 million was largely attributable to higher depreciation attributable to growth projects and the absence of a $3.2 million RSAM adjustment from FCG during the prior-year period and higher 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 wording
Operating income for the Regulated Energy segment for the first quarter of 2026 was $71.1 million, an increase of $10.6 million, over the same period in 2025. Excluding transaction and transition-related expenses associated with the acquisition and integration of FCG, operating income increased $10.3 million, or 16.9 percent, compared to the same period in 2025. Higher operating income reflects incremental margin from regulatory initiatives and infrastructure programs, pipeline expansion projects, and organic growth in our natural gas distribution businesses. Excluding the transaction and transition-related expenses described above, the increase in total operating expenses of $9.3 million was largely attributable to higher expenses associated with payroll, benefits and other employee related expenses, higher facilities, maintenance costs and outside services, and increased costs related to credit, collections and customer service. Depreciation and amortization expense for the current period includes decreases related to certain regulatory items including the absence of recovered costs associated with Hurricane Michael and the impact of the FCG depreciation study. These amounts were largely offset by additional depreciation, amortization and property taxes associated with growth.
Previous wording
(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects discussion for additional information.
Current wording
(1)Includes adjusted gross margin contributions from permanent base rates. Refer to Major Projects discussion for additional information.
Previous wording
We generated increased adjusted gross margin of $5.6 million for the three months ended September 30, 2025 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
Current wording
We generated increased adjusted gross margin of $6.9 million for the three months ended March 31, 2026 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
Previous wording
Regulated infrastructure programs generated incremental adjusted gross margin of $11.0 million for the nine months ended September 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 wording
Regulated infrastructure programs generated incremental adjusted gross margin of $5.5 million for the three months ended March 31, 2026. 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.
Previous 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 $3.6 million for the three months ended September 30, 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 March 31, 2026. 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 $1.5 million from natural gas customer growth. Adjusted gross margin increased by $1.2 million for our Florida natural gas distribution service territories and $0.3 million on the Delmarva Peninsula for the three months ended September 30, 2025, as compared to the same period in 2024, due to residential customer growth in Florida and on the Delmarva Peninsula, respectively, as well as growth attributable to commercial and industrial customers.
Current wording
We generated additional adjusted gross margin of $2.0 million from natural gas customer growth. Adjusted gross margin increased by $1.5 million for our Florida natural gas distribution service territories and $0.5 million on the Delmarva Peninsula for the three months ended March 31, 2026, as compared to the same period in 2025, due to residential customer growth in these service areas, as well as growth attributable to commercial and industrial customers.
Previous wording
Customer consumption, inclusive of weather-related consumption, reduced adjusted gross margin by $0.9 million for the three months ended September 30, 2025.
Current wording
Customer consumption, inclusive of weather-related consumption, increased adjusted gross margin by $1.7 million for the three months ended March 31, 2026.
Previous wording
Fewer off-system natural gas capacity sales reduced adjusted gross margin by $0.7 million for the nine months ended September 30, 2025.
Current wording
Off-system natural gas capacity sales increased adjusted gross margin by $1.1 million for the three months ended March 31, 2026.
Previous wording
Operating results for the Unregulated Energy segment for the nine months ended September 30, 2025 reflect a $2.2 million increase compared to the same period in 2024. The increase in adjusted gross margin in the Unregulated Energy segment during the first nine months 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 margin improvements were partially offset by lower margin per gallon and fees in our propane distribution business. The increase in operating expenses included higher payroll, benefits and other employee-related expenses, increased facilities, maintenance and outside service costs, and higher depreciation, amortization and property tax costs compared to the prior-year period.
Current wording
Operating results for the Unregulated Energy segment for the three months ended March 31, 2026 reflect a $2.0 million increase compared to the same period in 2025. The increase in adjusted gross margin in the Unregulated Energy segment during the first quarter of 2026 was primarily due to increased consumption in our propane distribution business which was impacted by colder weather in the Delmarva service areas as well as improved performance from Aspire Energy. The increase in operating expenses included higher payroll, benefits and other employee-related expenses, increased facilities, maintenance and outside service costs, and higher depreciation, amortization and property tax costs compared to the prior-year period.
Showing the first 40 of 65 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
In December 2025 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 2025. The combined revised surcharge became effective January 1, 2026.
Current report — wording carried from elsewhere
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)
Rearranged previous paragraphs (24)
Previous report — wording carried elsewhere
Key variances between the third quarter of 2024 and 2025 included:
Previous report — wording carried 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.
Previous report — wording carried elsewhere
(1) Transaction and transition-related expenses attributable to the acquisition and integration of FCG have been excluded from the Company’s non-GAAP
Previous report — wording carried elsewhere
measures of adjusted net income and adjusted EPS. See reconciliations above for a detailed comparison to the related GAAP measures.
Previous report — wording carried elsewhere
(2) Refer to Major Projects and Initiatives table for additional information.
Previous report — wording carried elsewhere
Regulated infrastructure programs generated incremental adjusted gross margin of $3.9 million in the third 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 report — wording carried elsewhere
transition services, consulting, system integration, rebranding and legal fees.
Previous report — wording carried 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.
Previous report — wording carried elsewhere
(3)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.
Previous report — wording carried elsewhere
(1) Includes adjusted gross margin contributions from both interim and permanent base rates. Refer to Major Projects discussion for additional information.
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Natural Gas Transmission Service Expansions, including interim services
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We generated increased adjusted gross margin of $11.7 million for the nine months ended September 30, 2025 from natural gas transmission service expansions of Peninsula Pipeline and Eastern Shore.
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Rate Changes Associated with Recent Rate Case Activities
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Rate changes associated with the Delaware and Maryland natural gas rate cases and Florida Electric base rate case contributed additional adjusted gross margin of $9.2 million for the nine months ended September 30, 2025. Refer to Note 5, Rates and Other Regulatory Activities, in the condensed consolidated financial statements for additional information.
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We generated additional adjusted gross margin of $5.5 million from natural gas customer growth. Adjusted gross margin increased by $4.1 million for our Florida natural gas distribution service territories and $1.4 million on the Delmarva Peninsula for the nine months ended September 30, 2025, as compared to the same period in 2024, due to residential customer growth in Florida and on the Delmarva Peninsula, as well as growth attributable to commercial and industrial customers.
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Customer consumption, inclusive of weather-related consumption, increased adjusted gross margin by $0.9 million for the nine months ended September 30, 2025.
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transition services, consulting, system integration, rebranding and legal fees.
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The following narrative discussion provides further detail and analysis of the significant items in the table above.
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(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.
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The following narrative discussion provides further detail and analysis of the significant items in the table above.
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•Increased performance from Aspire Energy -Adjusted gross margin increased by $0.2 million compared to the prior-year period.
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Income tax expense was $35.0 million and $30.2 million for the nine months ended September 30, 2025 and September 30, 2024, respectively, resulting in an effective income tax rate of 27.1 percent and 26.9 percent, respectively, during the periods then ended.
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We may also issue long-term debt and equity to fund capital expenditures and to maintain our capital structure within our target capital structure range. We maintain effective shelf registration statements with the SEC for the issuance of common stock in various types of equity offerings, including pursuant to our DRIP and ATM program. Depending on our capital needs and subject to market conditions, we may issue additional shares under the DRIP in addition to other possible debt and equity offerings.
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On November 1, 2024, we issued 5.20 percent Senior Notes due in November 2029 in the aggregate principal amount of $100.0 million. The proceeds received were used to reduce short-term borrowings under our Revolver and to fund capital expenditures. These Senior Notes have similar covenants and default provisions as our other Senior Notes and have semi-annual interest payments due on May 1 and November 1 of each year which began in 2025.