Ladies and gentlemen, thank you for standing by, and welcome to the Chesapeake Utilities Corporation Third Quarter Earnings Conference Call. [Operator Instructions].I would now like to hand the conference over to your speaker today, Ms. Beth Cooper. Thank you. Please go ahead, ma'am.

Good morning, and welcome to the Chesapeake Utilities Third Quarter 2019 Earnings Conference call. Before we begin today, the Chesapeake team would like to recognize all active, retired and reserve members of our armed forces in the room and on the phone today. On behalf of the entire Chesapeake organization, thanks for everything you have done to serve our country proudly each and every day. There is no value we can place on the sacrifices you have made.Now turning back to our call. We appreciate all of you taking time to listen in today. Joining me on the phone are Jeff Householder, President and CEO; and Jim Moriarty, Executive Vice President, General Counsel and Chief Risk and Compliance Officer. We have other members of the management team in the room with us today. The call is taking place in our Energy Lane Complex in Dover, Delaware. Our presentation today will focus on our quarterly and year-to-date results through September 30, 2019. Much of our focus will be on a year-to-date performance as the weather in the third quarter generally results in earnings, which are the smallest of the four quarters in the year.As previously announced, in the third quarter, we initiated a process to exit the natural gas marketing business through a series of transactions to sell the assets and contracts with PESCO, our natural gas marketing subsidiary. To date, we have closed on four transactions. As a result, we have begun to report Tesco as discontinued operation, separate from our continuing operations. I would refer you to our press release and Form 10-Q for additional details on these transactions. Lastly, in addition to our performance, we will also highlight many of the opportunities we see before us.Turning to Slide 2. Our normal disclaimers are listed related to forward-looking statements concerning the company's future performance. Again, we refer you to our third quarter Form 10-Q and 2018 annual report on Form 10-K for a list of factors that could result in our actual performance differing from the forward-looking information, including -- included in the presentation. Today's discussion will also include certain non-GAAP measures, such as gross margin and adjusted EPS as well as highlight our performance in terms of both continuing operations and discontinued operations, in addition to the overall consolidated results. I will now turn the call over to Jeff.

Thanks, Beth, and thanks for joining our third quarter call. As Beth indicated, the third quarter is always a somewhat less low-cost revenue quarter in the natural gas and propane business. It is, however, a great time to prepare for winter to complete a variety of system maintenance hurdles. And to accelerate a number of construction projects and take advantage of the typically mild role at this time of the year. We've been doing all of that, making significant progress on several important pipeline projects. We've completed a number of pipeline replacement projects down in Florida. We've installed a number of services in the years. So to new customers, and we've been expanding our Marlin gas services business. All that, in addition to handling the sale of our Gas marketing business.We're also finally have begun to see some weather show up on DelMar and Ohio. I'm happy to report it's cold here today, and hopefully, we'll be cold for next week as well as for all over the winter. So we're well ahead of year-to-date 2018 earnings, reflects strong performance in 2019 and we fully expect to continue that through year-end.Let's turn to Slide 3. I want to quickly highlight just a few points related to our operations initiatives, our financial results and the execution of our strategic plan. On the operations side of the business, we have a continuous improvement activity underway in our safety and operational compliance areas. We have a real commitment to that. We want to be the best-in-class in our operating areas, and we're investing significantly in safety and operational compliance. We've seen our gas distribution customer growth were well above the national average, both on Delmarva and Florida, and we expect that to continue for quite some time. Our customer -- our demand is…

Thanks, Jeff. And as Jeff mentioned, we are very pleased with the speed with which we executed the sale of PESCO. And the gain that we will ultimately recognize in the fourth quarter. As you can see on Slide 5 for the quarter and year-to-date, our gross margin growth has driven strong operating income growth. While our other operating expenses grew, the pace of the growth slowed to 5.6% for the quarter and more importantly, 2.5% on a year-to-date basis. Gross margin grew 7.9% and 8.8% for the third quarter and year-to-date, driving operating income growth of 11.5% and 16.2% for the same periods, respectively.Higher interest costs associated with increased short-term borrowings and increased short-term interest costs and the cost of long-term debt were offset by the gross margin growth in both periods. EPS from continuing operations for the third quarter grew by $0.01 per share or 2.7%. GAAP consolidated EPS was flat for the quarter. On a year-to-date basis, EPS from continuing operations grew by $0.29 per share or 12.2%. GAAP consolidated EPS increased by $0.23 for the same period or 9.7%, as mentioned earlier. We used this slide -- on slide 6 to highlight the growth projects and other strategic initiatives that are underway or recently completed as well as for margin contribution. And beginning with this quarter, we've actually color-coded and sorted these projects and initiatives by expansions, acquisitions and regulatory initiatives.For 2019, we expect margin growth of $22.3 million, which includes $18.3 million generated during the 9-month period. The $22.3 million estimate increased $1.3 million since our previous disclosures in the second quarter. The 3 largest contributors to the year-to-date $18.3 million increase include $10.5 million from pipeline expansion, $5 million from the Marlin and Ohl acquisition, with Marlin generating $4.4 million of the $5 million…

Thanks, Beth. As you all know, our regulatory initiatives are a significant component in our overall strategic plan. We've been quite successful over the years, and happy to report several additional successes. In addition to the nonregulated tax benefit that we've talked about a second ago, the Florida Public Service Commission approved retention of a portion of our TCJA tax savings for the company's Florida regulated natural gas operations. We ended up with a pickup of $1.3 million on reversal of 2018 tax reserves and $2.4 million as an incremental annual benefit beginning in 2019.And so far, we've seen about $1.1 million in the first 9 months of 2019. One of the reasons we were successful, I believe, has probably one of the only, if not the only regulated natural gas utility in the country to actually retain a portion of these tax benefits as we focused our attention on using some of these dollars -- significant amount of these dollars in our safety and operational compliance activities. And so we've not only recovered costs that are critical to the operations of our system. But we've seen a nice pop in the equity returns in both the foreign public utilities and central Florida gas systems in Florida. We also received storm recovery surcharge of about $2.3 million to be recovered, as it indicates here from April 2019 to March of 2021. That is not for Hurricane Michael, the big one down there in our electric system.These were four hurricanes, Irma and Matthew that came through our natural gas distribution system on the nearly island a few years back. We have not yet filed for recovery of the $1 million or so that we expect on preparing for Hurricane Dorian, the other day when it came through. There are a couple of recent filings with the PSC that are worth mentioning. One of them is the Hurricane Michael Recovery, the seeding that I mentioned in passing a moment ago. We have, as I indicated, the structure of our recovery and the interim rates already approved, and we believe that we will get final approval on the final recovery amount here over the next few months.And also, I indicated that we have filed Eastern Shore. Eastern Shore has a filing to accommodate renewable natural gas, which we believe ultimately is a pretty important element of our total gas supply going forward. Beth?

Sure. Thanks, Jeff. So turning to Slide 11. As we mentioned earlier, we recorded GAAP earnings per share from continuing ops to $2.67 per share for the 9 months ended September 30, 2019, and we recorded in conjunction with that it was a result of our gross margin growth, which we've identified on Slide 11, and that added $1.03 per share in terms of earnings.On the cost side, we saw expected increases in expenses to support our growth, a $0.44 per share, but at a much slower pace as related to growth and fully funding Hurricane Michael restoration costs increased $0.22 per share. Finally, our results on a year-to-date basis have been strong despite warmer than normal temperatures year-to-date in 2019 compared to last year. As a result, our earnings potential was negatively impacted by $0.20 per share due to lower consumption. Earnings per share growth averaged 7.9% and 9.6% for the past 5 and 10 years ended December 31, respectively, based upon adjusted EPS. This is actually shown on Slide 12. 2019 results are strong on a year-to-date basis, and the outlook, as Jeff commented earlier, remains very positive for the year as a whole, whether viewed on a consolidated basis with Tesco's gains included or on a continuing operations basis.Beyond 2019, our outlook for earnings growth remains consistent with the previous guidance through 2022. As we continued to move to the end of the year and into 2020, we will update this guidance further as new projects are finalized. Our team's relentless focus on finding new expansion projects and developing organic growth in our territories, combined with regulatory ingenuity and cost efficiency will continue to drive increased earnings.Slide 13 shows our performance quadrant, which is a slide that we consistently show in our presentation. Similar to prior periods,…

Thanks. As Beth indicated, we've been quite successful in identifying and executing on capital projects and putting capital dollars to work. We continue to see that going forward. The list that you see on Page 17 or Slide 17 is just a snapshot of some of our transmission projects, both on Eastern Shore in our Florida operating areas. You've heard us speak for the last couple of years about the 2017 Eastern shore expansion of that project is fully in service. We're seeing significant margins result. Our Northwest Florida expansion that went into service in the middle of 2018. This year, we're seeing fully annualized margins on that project and actually looking to continue to expand our opportunities over in the Panhandle of Florida to serve additional customers off of that pipe and Western Palm Beach County.Again, a number of projects that are providing service into the western part of the county. Callahan pipeline in National County under Construction, DelMar Energy Pathway, waiting on FERC as is -- as there are so many other pipelines in the country, which we believe that we have some hope that we will get the authorization to begin construction on that pipeline fairly soon and put it into service by Q4 2021. And a couple of other projects, Avondale and Florida and the Guernsey Power station, we believe we'll be able to see that project in construction and completed in 2021. So a good list of projects that we have underway. If you turn the page to Slide 18, just a snapshot or 2 of the DelMar Energy Pathway project that I just mentioned, we've got an estimated project cost of about $37 million. Looking for an in-service date beginning in the fourth quarter of 2021, contingent on getting the FERC authorization. Ultimately, looking…

Now thank you, Jeff. Now I'd like to turn the call over to Jim to just touch a little bit on what we're doing in the area of sustainability and ESG. Jim?

Thank you, Beth and Jeff, and good morning to all on the phone. Our ESG journey continues, as we celebrate our 160th anniversary as an energy solution provider. We are very proud of the contributions that our team has made over that time. To provide safe and reliable energy services and solutions to our employees, customers and the communities we serve. It is these contributions that have continued to progress ESG and that are now embedded in our culture and our DNA. A comprehensive effort continues, where talented and a diverse team of employees are highlighting ESG at Chesapeake Utilities.We look forward to our many efforts across the organization, such as our pipeline replacement, CNG, RNG and CHP, which contribute to methane emission reductions. Sustainable practices that make sense for our stakeholders is not only prudent, it's also the right thing for us to do. In addition, our safety achievement awards continue our culture of safety and accountability. We take seriously our responsibility to ensure safety is at the center of what we do. And then we do all we can to protect the well-being of each other and our communities. We would like to thank the company's employees and our veterans for their dedication, entrepreneurship, volunteerism and passion that they bring to work every day. And not surprisingly, the reason why we were recognized for the eighth year in a row as a top workplace.We thank also our Board of Directors for their leadership and our Corporate Governance Committee, who has oversight of our ESG efforts. And in that regard, we would like to recognize the Chair of our Corporate Governance Committee, Kal Morgan. Who was recently inducted into the -- that she has devoted his time and talent. Frequently, we are reminded of moments that enrich the culture that makes Chesapeake Utility, first for the award ceremony. We will continue to provide updates to you on our ESG efforts, including in our annual report for year-end 2019. Thank you very much for being with us today. And as always, for your continued support.And I'd like to turn this back to Jeff.

Thank you, Jim. Just to briefly conclude the call on Slide 23. We are sort of all focused on executing our strategy, continuing to look for new development projects. We've been very successful finding those over the last several years, as I indicated, we see a fairly strong investment opportunities for us going forward. Pipeline opportunities out there, fair amount of propane opportunities that we think make sense to us. Marlin, CNG, Services business is growing, and we are continuing to expand that across the Southeast and Mid Atlantic. We just see a very robust set of investment opportunities as we look to the end of this year and continue into 2020. And now let me turn the call back to the operator. And if there are any questions, we would be delighted to answer them.

[Operator Instructions]. First question is from the line of Tate Sullivan from Maxim Group.

Jeff, if I may start on Marlin, since you just mentioned it too. And I think there were $0.05 -- it was $0.05 per share of expenses in the quarter related to Marlin expansion, maybe some of that was related to the propane expansion. Besides the associated depreciation with building new trailers, was that headcount -- additional headcount costs? Or can you talk more about that $0.05 charge, please?

I can talk a little bit about it. Yes, there were a couple of headcount additions. There are also some consulting expenses associated with Marlin. As we look to expand into the RNG transport and LNG transport side of the business as well as looking to slight additional logistics areas, both on the Delmarva and potentially in another state. So yes, we've seen some increase in expenses that they are virtually all related to growing the business.

Okay. And next, on the Guernsey Power station. Is this the first time you've disclosed this? Or can you remind me, did you talk about it in December 2007? And have you done this type of work for any other natural gas power plants in the company's history?

So say, in that regard, this is the first time that we've come out, we were waiting for certain triggers with the counterparty to occur. And so we're in a position to announce the project now. And this isn't the first time that we've delivered natural gas. If you go back, I mean, Eastern Shore has had a history of bringing natural gas to power plants. Most recently, they did the project here to the Garrison Energy Center in Dover. But there's been other projects as well. This is our first opportunity in Florida to have that kind of project -- or I'm sorry, Ohio has set for their, Ohio. And so we're really excited about that.

And obviously, we're serving our own generation facility Eight Flags, which actually is in Florida.

Okay. I guess, I'm just trying to -- I guess, it's different from some other companies, I mean, what they call, I mean, is it a vendor business or fuel management business is this similar to that type of business, the Guernsey Power?

We're actually physically building a pipeline that will provide service from and as it indicates here from a Tallgrass Energy Partners, Rockies Express Pipeline, the interstate pipeline to the Guernsey Power station. So it looks a lot like our Peninsula Pipeline business in Florida, where we're interconnecting an upstream interstate 5 FERC-regulated interstate pipe, with an industrial customer or power generator in this case. We do a lot of that. it's pre standard -- pre typical project for us.

Okay. And then just to touch on the Hurricane Michael comments. In the press release, you noted a short-term negative recovery of the costs starting in January, Beth or what does that refer to that time? Or is that already occurred?

That's already occurred. That's associated with the impact that we've had. I mean, there were a few customers that have not come back on. And so when you look at it on a year-to-date basis, they're still going to have the impact that those customers being on for the early part of 2018. It is 2018, they're not necessarily on in the early part of 2019. So there's not really a lot, but there is some impact there, Kate.

Most of that is on interest expense, right?

Well, we have the margin piece, and then you also have a little bit of the interest expense on the expense side. A good part of the interest has gone associated with the capital or the storm reserve, but there is a piece that's still left in hitting our income statement.

Okay. And last for me, on the CapEx side on Slide 14. Do you normally, Beth, shift to a range at this time of the year? This is the first time you've done that? And second, what is the energy transmission on regulated spending, please?

Sure. So this is actually the first time that we've come out and disclosed a range, but we have a lot of projects -- and in particular, as Jeff talked about, the DelMar Energy Pathway project, we're anticipating FERC approval and if we get that sooner than later, certainly, you'll see some of the dollars on that project be spent. There's also dollars in here associated on the energy transmission side, that's actually the Aspire business, and so the timing of some of the expenditures associated with the Guernsey project. And then just some other expansions, smaller expansions that they have, more of the organic type growth some of that will depend again as we're coming through the year-end. And so we tried to be pretty tight. The last -- the big piece that you're seeing on here is the other unregulated energy change and that relates to Marlin's business. And as Jeff talked about, there are some things that we're doing there, as we're looking to expand. We've brought Marlin's presence here on the shore on the Delmarva Peninsula. We had some other opportunities that are underway. And depending upon how far those get -- we could expand somewhere between that $8 million to that $14 million. And we'll be trying to put out some more releases and information about some of these projects as are finalized.

Your next question is from the line of Brian Russo from Sidoti & Co.

Just to drill a little bit deeper in the CapEx range that you provided versus the specific dollar amount previously, it looks like while the entire forecast to CapEx seems to be relatively consistent, at least at the midpoint of the high and low that you've just disclosed, but it looks like total regulated energy CapEx is down at the midpoint about $4.9 million at the midpoint about $4.9 million, whereas total unregulated energy is up about $3.2 million. And then you just mentioned the Marlin of about $0.80 million relative to the midpoint. And I was just wondering what's changed at the Reg energy and unreg? total unregulated energy is up about $3.2 million.

Well, I mean, it is our entire CapEx budget. So Brian, as we're actually looking at it -- you look at it every month with our business units and update our forecast. So depending upon the projects that they're working on and what they have on the horizon. One project may slow up in a given business and one project may accelerate. It's really -- I wouldn't say there's not really too much to read into those shifts because we can have general just expansion projects. And if we're slowing up in one, may be increasing in another. It's just really -- we keep refining it continually all the time.

Okay, that makes sense to me. And then also, just on the project margins, you mentioned the new Guernsey Power Station. Just to clarify, did you say late 2021? So from a gross margin contribution, it's more like '22 and beyond?

Yes, you also have -- yes, that's correct.

Okay, great. And the $5 million to $7 million PESCO gain, that's quite impressive. It seems like $0.29 in EPS will be recorded in the fourth quarter. Is that accurate?

The range between $5 million and $7 million, would give you a range of between $0.22 and $0.30. If you strictly take that number on an after-tax basis and use our average diluted shares for the 9 month. So I mean, that's -- you're in the ballpark there, Brian, it will just depend on -- as Jeff mentioned, we've got to close out some contracts, we given ourselves a little bit of room just to make sure for the final settlement of everything and then any associated costs as we wind down. But generally speaking, that's $0.22 to $0.30 per share.

Got it. Okay. And does the PESCO pending sales, does that at all alter your intentions on equity to rebalance the cap structure in September 2020?

It will, certainly, with the cash flow, reduced our short-term debt, and then that will shift -- raise our equity ratio as a percent of total capitalization slightly, but it will not meaningfully impact our pursuit over the longer-term to bring our capital structure back closer to our target range. And you saw us take a step recently with our debt. I think we'll continue to look at different things there as well as we'll look at the appropriate time on the equity side. But we look at a lot of things. We look at it, as I mentioned, we'll look at market conditions, the projects that are ebbing and flowing things like Tesco, where we have proceeds coming in. We'll also look at when certain projects are going to be completed and then, placed into services as a host of things. But you'll continue to see us migrating our capital structure back there over time.

Okay, very good. And then just on the Marlin outlook, it looks like you've added some CapEx for that you've incurred some expenses for growth over the past several quarters, you've increased your outlook on gross margin there. And I believe even in commentary in the queue, 2021 and beyond, you see incremental growth relative to 2020 and prior. Is -- any more details on that? Have you added more rigs or any examples of that event growth in terms of investment?

We have added several additional trailers. And we've added them in a little bit different fashion than what we bought originally, which were steel tube trailers. These are composite trailers that come in the back of what looks like a semi truck. The capability of these trailers is fairly significantly more than the steel tube trailers. And so we're not only cutting some of our expenses out for fewer terms on the trailer but we're able to and we have done several of these handle larger jobs. And so it's a progression of going from the original 2 trailers to the larger quantum trailers to ultimately LNG trailers, and being able to offer larger volumes per trailer, which again will reduce some of our costs, ultimately, but also it opens up a significantly larger number of jobs for us. And so we've acquired a number of those.

Okay. And then just lastly, just a clarification on the DelMar approval process you project approval, you're still waiting for FERC. And now you're saying 4Q 2020, cod, I believe, previously, you were saying a mid-tier 2020. Is that accurate?

Yes, we are -- I think -- so what we're seeing on that side, Brian, is we're saying that we're hoping that we get certainly approval in the fourth quarter of this year. And then our expected in-service date is in the fourth quarter -- fourth quarter of 2021.

Fourth quarter of 2021. Okay.

But now you will note, I mean, you will note, I just would add. You will note, even though if you look at our press release today, there are interim services associated with that project that kicked in before that project is constructed. So just keep that in mind. And that's been Eastern for it's long standing history. Jeff talked about the same thing in Florida. We have opportunities sometimes to implement interim services, whether it be utilization on available capacity or whether it being bringing in Marlin to help provide that kind of interim service on behalf of our pipeline.

Right. Okay. So I guess, you're comfortable with the Delmarva pathway projects gross margin contribution, which I guess, is basically is unchanged from prior disclosures?

That is correct.

Your next question is from the line of Roger Liddell from Clear Harbor Asset Management.

Yes, I wanted to pick up on several points. The first 2 are quick and then 2 more substantive ones. The -- on the issue of energy efficiency and ESG, the E part is what's in my mind. The Guernsey plant pictured on Slide 21 appears to be an open cycle in that there's racks of heat exchangers, right next to them. I'd like to think that the initiative that you demonstrated in the Eight Flags of combined heat, extracting all the squeal from the pig is the kind of thing that maybe you could lead project designers going forward. You didn't design Guernsey, but the visual leaves me a little frustrated. You don't need to comment on that one, unless you choose to.

I probably choose not to. Although, I know exactly what you're saying. There is an opportunity, and we actually have had some conversations about combined cycle operations here. So that certainly is still a possibility.

Yes. Jeff, and you've never referred to, and it may represent no opportunity for the company. But the Jacksonville electric authority and effectively putting out RFPs to dissolve itself. If that's not the right term for giving me, I don't happen to follow it that much. But is there any upside on anything that you see going on with Jack's right now?

Well, obviously, we're not directly involved in that process, and we moved on a couple of years ago from our purchase power agreement with JEA. There had been in effect for a number of years. And for rebid that process and ultimately ended up with executing an agreement with FP&L at a significantly lower price point. Yes, I -- I suppose it depends on -- we still have some very minor interconnects through an arrangement with FP&L, JEA and ourselves on how the power ultimately flows onto Amelia Island. So I guess, there are some potential entanglements there, but very few for us. Certainly, I don't see anything on the price of electricity side. And our operating systems are quite distinct. And so I guess, potentially when a transaction of that type occurs, especially a municipal utility going to an investor-owned, there are always ancillary political issues that have a tendency to spill over regionally. So we'll be keeping an eye on all of that. But I think we're probably in pretty good shape here.

Yes, okay. Slide 18, the DelMar whole series of opportunities. My impression has been based on what you've done in the past, both in Delaware and coming down into Maryland is all sorts of opportunities that weren't apparent at first or were planned for disclosed as it were, but they simply occurred by virtue of your bringing the gas availability to where it wasn't, or back feeding and making robust. I'd like to think that the $37 million estimated project cost is as well, I would hope to be a fraction of what you might ultimately be doing in that area. Is it useful to sketch out what goes beyond, what opportunities are there beyond the particular program, that you've laid out and awaiting the approval on?

Well, I would say that we are also hopeful, as you indicate, that we can do a variety of things, not only with additional Eastern Shore advancement down the Peninsula, but the development of our D&G distribution systems in those areas. So I would agree, there are certainly opportunities that we see in the future for continued development in these areas, both from a industrial/commercial customer perspective, but also significant residential opportunities here. And those then roll over in tomorrow and then, a variety of other things. I will tell you this, become as no surprise. Part of our expansion activity here is doing exactly what we were trying to do 10 years ago or so, when we started our propane community gas system expansions, where we went out into these unserved areas and executed agreements with developers to put propane distribution in. And we have thousands upon thousands of customers in these areas. And over time, we will begin and already have begun to convert those from natural gas -- or from propane over to natural gas. And so as you might imagine, we're looking for the next tranche of the community gas system activity. So we're looking very hard in these areas, as developers continue to build off of our existing system to get out in front of that development. I'm sure we have gas customers there. But we can get the pipeline expanded, and we can expand our distribution system. So yes, we're quite bullish on these areas

Okay. And finally, renewable natural gas. Again, harping on the E part of ESG. This is really important. And if nothing else, involvement with, I would hope, significant scale, ultimately with RNG is at least a way of deflecting the headwind of those proposed a fossil development under any thesis. But I'm not clear what opportunities there are. I used to think of chicken operations, as being on-site power and so forth. If you're talking about there being a real system supply resource. There's got to be a lot of scale. What's the gating? How big an opportunity is the R part of your gas supply?

Well, I'll give you just a couple of general examples, the potential chicken waste collection, cleanup processing, methane extraction back into our pipeline system, based on discussions that we're in the middle of with various parties. Could run to the 6,000 to 7,000 decatherm a day range, which would not quite take care of all of our residential customers on Delmarva, but it would be close. And so you could envision, assuming we can get green gas into our system. You could envision a time in the future when a significant part of our at least our residential customer base could be burning renewable natural gas, and we see the same opportunities in Florida, with some of the landfill projects that we are pursuing. There's a large cattle ranch down there that we're looking at. We've looked at some wastewater treatment facilities.There are a significant number of methane sources that we believe that we can capture. And frankly, that was one of the reasons we bought Marlin, is that we're sort of perfectly positioned to take that gas and inject it in the right place in our systems. So that it -- ultimately, we'll have the right pipeline quality characteristics chemically, that we can understand the BTU content issues around that source of gas that are somewhat different than the upstream pipeline source. And we can appropriately blend those two fuel types. So that we don't have any issues with customers downstream in their appliances. And so we're working very hard to figure all that out. One of the things that we've done recently, as I mentioned earlier, is the FERC filing that begins to establish quality standards and other standards inside our Eastern Shore tariff. And we're working to do the same thing at D&G and in our Florida operational areas.So I would agree with you. We think this is a big deal. We think there are lots of opportunities here. And we see it not only, as you indicated as an ESG issue, but we see it as a potential profit issue by virtue of the fact that we own a transportation company, Marlin, that can move that gas around pretty easily. And so one of the real stops to any R&D project is how do you get the gas from the generation point to the actual usage point. And usually, when you have to build a pipeline, that's not a attractive economic consideration. But with Marlin we can make that work fairly easily and economically. So we see lots of opportunities for Marlin here, not just on our system, but on systems across the country. And we certainly are highly focused on R&D coming into our distribution systems.

Excellent answer, and well done, and I hope you'll keep us posted on that from time to time in these calls.

We will.

[Operator Instructions]. No further questions at this time. I turn the call back over to Mr. Jeff Householder?

Well, thank you. I appreciate all of you dialing in this morning, and we look forward very much to talking with you over the next few weeks and months. And I hope you have a great holiday season, if we don't see you before. Goodbye.

Thank you.

Thank you.

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.