Shifting to our Northwest Pure Fuel Utility, which now greater than ever performs a crucial function in power affordability and reliability throughout Oregon and Washington. As we famous on our final name, we efficiently settled our Oregon price case in 2025, with new charges efficient October 31. In Washington, I’m happy to report that now we have been working collaboratively and productively with events and have reached settlement in precept resolving the income requirement within the case. We anticipate to file the multiparty settlement within the coming month. Each circumstances set Northwest Pure as much as recuperate important security and reliability investments in 2026 with a give attention to sustaining buyer affordability.
The truth is, on common, Northwest Pure residential clients are paying about the identical right this moment for his or her pure fuel service as they did 20 years in the past. We’re additionally diligently engaged on dockets with the Oregon Public Utility Fee to finish rulemaking on multiyear price circumstances. We consider shifting to multiyear price circumstances will finally present better readability and certainty for each clients and utilities. Whereas the rulemaking course of is taking form, we filed an alternate price mechanism to recuperate sure capital investments made within the interim interval. The proposal ends in a modest 1.5% enhance to buyer charges with an efficient date of 10/31/2026. Stepping again, we really feel excellent about our positioning over the following a number of years.
Traditionally, our earnings trajectory relied on a single giant Oregon price case each few years, which created uneven progress and restricted predictability for patrons and shareholders. The transition to multiyear price circumstances in each Oregon and Washington, mixed with the rising earnings profile of our Sea Vitality and water companies, ought to create a extra balanced and linear consolidated earnings profile yr to yr, whereas sustaining price affordability and predictability. As I discussed, we’re excited to announce that Northwest Pure Holding Firm intends to increase its fuel storage facility at Mist. This challenge, which we name MX3, is the third main fuel storage growth now we have undertaken at Mist since its preliminary development in 1989.
MX3 will add 4 to five Bcf of storage capability and serve clients throughout the area. Northwest Pure’s fuel system is extra important to the area than ever, particularly given the heightened give attention to reliability and affordability. Our system delivers about 45% extra power than some other Oregon utility, fuel or electrical, over the course of a yr. At the moment, the area’s power system is struggling to reliably meet demand throughout peak occasions. The Pacific Northwest electrical grid faces a possible 9 gigawatt capability shortfall by 2030. That’s the reason our storage capabilities are so essential. They’re uniquely positioned, expandable even past MX3, and supply a cheap answer to our area’s rising power challenges.
Our clients for the MX3 storage growth see this clearly. They consist of enormous investment-grade regional utilities and midstream suppliers. As soon as we obtain discover to proceed, these clients have agreed to 25-year contracts, underscoring the demand for long-term, reasonably priced power options. We’re within the growth part of the challenge with signed buyer agreements, the Vitality Facility Siting Council allow secured, FERC approval obtained, and engineering, procurement, and development, or EPC, suppliers recognized. These new storage providers might be regulated by FERC and are anticipated to supply secure returns with buyer agreements that specify a set 12.5% return on fairness and a 50% fairness layer.
Our Northwest Pure staff has deep expertise with the geography of the Mist storage discipline and its depleted fuel reservoirs. We anticipate to work with main EPC contractors who know our operations properly. We’re working to acquire the remaining permits, and early-stage engineering and design work is already approved and underway. The challenge is estimated to price roughly $300 million, and we anticipate the ability to be in service by 2029. I’m very enthusiastic about this challenge and the worth it supplies to the area. MX3 is just not included in our long-term steerage right this moment, which we’re reaffirming at 4% to six%.
Nonetheless, we do anticipate the challenge to have a significant optimistic impression on earnings progress and plan to incorporate the challenge in our steerage once we obtain discover to proceed, which might elevate our long-term EPS outlook from 4% to six% to five% to 7%. One other essential progress engine for Northwest Pure Holding Firm is Sea Vitality, our Texas fuel utility. We closed the Sea Vitality acquisition in January 2025, and in June, we supplemented our Texas growth with the acquisition of Pines. Each utilities have been efficiently built-in into our enterprise. Texas is likely one of the most enjoyable progress drivers in our portfolio.
Sea Vitality offered 18% natural buyer progress in 2025 and contributed 11% of our consolidated adjusted earnings per share. On the similar time, Sea Vitality posted a large enhance to its buyer backlog, nearing 250,000 future meters. That’s greater than a 30% enhance in buyer backlog in a yr, a testomony to Sea Vitality’s robust relationships with builders and the anticipated progress within the Texas housing marketplace for years to come back. I’m very happy with Sea Vitality’s efficiency in our first yr of possession. We anticipate our LDC in Texas to proceed to scale quickly and produce 15% to twenty% buyer progress annually by way of 2030.
For 2026, we anticipate Sea Vitality to generate between 10% to fifteen% of our consolidated earnings per share. We’re strongly contemplating submitting a common price case for Sea Vitality someday this yr. We’ll rigorously weigh a number of components, together with buyer affordability, in our choice. Sea Vitality has been supported by exceptionally robust buyer progress, and right this moment, their charges are among the many lowest of our Texas LDC friends. In 2025, our water and wastewater utility platform achieved a scale that allowed us to drive enterprise efficiencies by way of standardized processes and centralization, and is properly positioned for continued progress. The water section outperformed our expectations, contributing $0.35 per share, or 12% of our consolidated adjusted earnings per share, in 2025.
Final yr, we accomplished seven price circumstances for our water and wastewater utilities and anticipate to course of one other 5 in 2026. We proceed to observe a gentle regulatory cadence to recuperate key security and infrastructure investments whereas sustaining reasonably priced and predictable buyer charges. The water enterprise has a transparent runway for progress supported by natural buyer additions, important greenfield alternatives, and a wholesome acquisition pipeline. Trying forward, we anticipate water to supply between 2% to three% natural buyer progress by way of 2030 and supply 10% to fifteen% of consolidated earnings per share in 2026.
We anticipate each Sea Vitality and water to outpace the general consolidated progress charges of the corporate within the subsequent 5 years, additional diversifying our buyer base and footprint. Confidence in our outlook is pushed by robust natural alternatives throughout all three of our utilities, together with 2% to three% consolidated natural buyer progress and price base progress of 6% to eight%. These fundamentals are supported by a report $2.6 billion to $2.9 billion of deliberate capital expenditures by way of 2030 and underpinned by wholesome buyer progress and important security and reliability spend. Importantly, we consider we will obtain our progress targets whereas preserving our providers reasonably priced for patrons and sustaining a robust steadiness sheet with strong investment-grade scores.
For 2026 particularly, we anticipate one other report yr for each capital funding and earnings. On the similar time, we’re centered on returning capital to shareholders. 2025 was the seventieth yr in a row of dividend progress for Northwest Pure Holding Firm. We’re one in all solely three firms on the New York Inventory Alternate with this spectacular report. In 2025, our dividend payout ratio moderated, supported by robust earnings progress throughout the enterprise. As earnings proceed to develop, we anticipate to ship regular dividend will increase, outpacing our development in recent times, as we goal a long-term dividend payout ratio of 55% to 65%.
In abstract, now we have constructed a robust platform, a robust set of companies positioned for long-term progress. This marks the beginning of an essential new chapter, and I’ve by no means been extra assured in our technique, our staff, and our future. With that, I’ll cross it off to Ray for a extra detailed replace on our monetary efficiency.
Raymond J. Kaszuba: Thanks, Justin, and good morning, everybody. I’ll begin by echoing Justin’s sentiment about our robust efficiency in 2025. This was a yr outlined by disciplined execution as we delivered report adjusted earnings per share and are creating a robust platform positioned for long-term progress. For the complete yr 2025, we reported report adjusted earnings per share of $2.93 in comparison with $2.33 per share for 2024. Earnings progress was fueled by new charges in Oregon, wholesome price base progress throughout the enterprise, and continued robust natural buyer progress. For our Northwest Pure Fuel Utility section, adjusted earnings per share improved $0.45, primarily reflecting new charges in Oregon, partially offset by larger operations and upkeep and depreciation bills.
Sea Vitality contributed $0.33 per share for 2025. In our first yr of possession, margin and web earnings was robust, driving outcomes above our expectations of $0.25 to $0.30 per share. Our water section earnings per share elevated $0.21 and contributed $0.35 per share to 2025 outcomes, which was additionally above our expectation of $0.25 to $0.30 per share. The important thing drivers had been new charges at our largest water and wastewater utility in Arizona and extra revenues from an acquisition late in 2024. Lastly, the adjusted web lack of our different section elevated $0.39 per share in comparison with the identical interval final yr, primarily as a consequence of larger curiosity expense on the holding firm.
For 2025, we generated $270 million in money offered by working actions, about 35% above 2024. We invested a report $467 million in our techniques associated to security, reliability, and expertise. Roughly 75% of these capital expenditures had been for Northwest Pure Fuel, with about 15% for Sea Vitality, and 10% deployed for water. We invested almost $340 million for acquisitions. Money offered by financing actions was $533 million, together with $47 million of fairness by way of our ATM program, which was lower than we initially anticipated. On 12/31/2025, we had liquidity of roughly $590 million, together with important availability on our strains of credit score and money available. Turning to our 2026 steerage.
We’re initiating 2026 earnings per share steerage of $2.95 to $3.15. Collectively, we anticipate Sea Vitality and Northwest Pure Water to contribute roughly 25% of consolidated earnings this yr. As Justin talked about, we’re reaffirming our long-term earnings per share progress price of 4% to six% compounded yearly from 2025 adjusted earnings per share by way of 2030. We’re seeing the advantages of our technique leading to a extra constant, linear year-over-year earnings trajectory.
Our long-term progress goal is supported by a number of sturdy drivers together with wholesome consolidated price base progress of 6% to eight% together with important funding at Northwest Pure Fuel, substantial buyer progress from Sea Vitality of 15% to twenty%, and robust 2% to three% natural buyer progress at Northwest Pure Water, leading to a sturdy consolidated natural buyer progress price of two% to three%. Our steerage is grounded in initiatives now we have clear line of sight into. For 2026, we anticipate consolidated capital expenditures of $500 million to $550 million.
Our five-year CapEx plan has between $2.6 billion and $2.9 billion in funding by way of 2030, with about 65% associated to Northwest Pure Fuel Firm, roughly 25% associated to Sea Vitality, and the remaining 10% associated to Northwest Pure Water. As Justin talked about, we’re not together with the impression of the MX3 fuel storage growth challenge in our steerage right this moment. Together with MX3, our anticipated long-term EPS progress price is projected to extend to five% to 7%. As soon as authorized, the challenge is predicted to price roughly $300 million. MX3 is predicted to be earnings accretive and credit score optimistic, enhancing money circulate high quality by way of long-duration contracted income streams. Associated to our financing, our steadiness sheet and funding technique assist our progress.
We’re dedicated to sustaining robust investment-grade credit score scores throughout our rated companies long run. For 2026, we anticipate to assist our CapEx program by way of robust money from operations, incremental web long-term debt of roughly $150 million after contemplating modest maturities of $160 million, and issuing fairness off our ATM within the vary of $40 million to $50 million. Over the five-year planning horizon, capital expenditures might be funded largely by way of working money flows together with a balanced mixture of long-term debt and fairness. By 2030, we anticipate to satisfy our fairness wants by way of our ATM program. We additionally stay dedicated to returning capital to shareholders.
With continued earnings progress, we anticipate dividend progress to be at the next tempo than shareholders have seen lately, whereas moderating our payout ratio to 55% to 65% over the following a number of years. With report adjusted earnings in 2025, and a number of sustainable progress drivers anticipated to lead to a robust 2026 and past, we’re excited concerning the future. With that, we are going to open up the road for questions.
Operator: Thanks, Ray. Should you change your thoughts and want to exit the queue, please press star adopted by two. When making ready to ask your query, please make sure that your gadget is unmuted domestically. We’ll now open for questions. Our first query might be from the road of Chris Ellinghaus with Seabrook Williams Schenk. Please go forward. Your line is open.
Chris Ellinghaus: Hey, everyone. Congratulations on an excellent yr. Given what you’ve gotten mentioned about probably elevating the steerage or the expansion vary, the place do you guys see yourselves throughout the current vary, and does Mist transfer the needle that a lot? What do you, or when do you anticipate the discover to proceed, and what are the any dangle ups which may delay that? C appears to be possibly forward of the curve, actually forward of what I used to be sort of anticipating on a professional forma foundation. How a lot forward do you see it relative to what your expectations had been, and are you at a stage at this level the place possibly the 2026 case is just not as crucial?
If I recall appropriately, Texas handed laws that’s constructive. Would that bypass GRIP, or would you follow that type of older mechanism? Given the mechanism that you just filed for in Oregon, your steerage suggests significantly decrease progress, proper? Are you anticipating receipt of that mechanism throughout the steerage? One final query. What’s the subsequent step for water? You might have all the time had a sturdy M&A pipeline. Is it increasing regionally or is it simply persevering with to do tuck-ins in your current service areas? What are your ideas on what water is as much as? Another quick query. Mortgage charges have come down a good quantity during the last 12 months.
Have you ever seen some alleviation of the headwinds towards housing or new clients, housing growth growth in Texas over the course of 12 months?
Justin Palfreyman: Thanks for the query, Chris. With out the 4% to six% long-term EPS progress steerage, with the challenge, as soon as that achieves discover to proceed, we anticipate that we’ll enhance that to the 5% to 7% that we simply described, and we’re very snug with our present vary with all the pieces else that now we have received in our plan. We anticipate discover to proceed by the top of subsequent yr. We now have plenty of milestones that now we have achieved with this challenge already, together with our Oregon allow, the Vitality Facility Siting Council allow, now we have received that accomplished. We now have FERC approval in place. We now have received our buyer agreements executed, and we’re finalizing our EPC contracts.
That’s one merchandise that we nonetheless have to finalize. After which we’re additionally finalizing some native permits earlier than we obtain discover to proceed. We now have been actually happy with the expansion that now we have seen at Sea Vitality, regardless of a slowdown within the housing market in Texas. We had unbelievable progress this yr. We additionally had report additions to our backlog, which bodes properly for the long-term future progress at Sea Vitality. I’d say we’re actually happy with what we’re seeing. It has in all probability exceeded our expectations. Nonetheless, now we have not gone in for a price case but, and there are nonetheless some remaining gadgets that we wish to see on an execution standpoint.
So, we’re considering a price case this yr and learning that closely proper now. However I can say that general, the expansion has been robust. It has been a couple of years since they’ve been in for a price case, and there are particular components of the speed case that we’re evaluating that may very well be extra useful down the street as properly, together with utilizing the GRIP mechanism in Texas. We’re evaluating that now, Chris. However I’d anticipate that, once we do go in for a price case, that we might have a look at the GRIP mechanism.
The 4384, which I feel you’re referring to, has been useful from an earnings perspective, and that’s mirrored a bit bit in our outcomes even in 2025. However I’d anticipate that, due to the best way the mechanism works for GRIP, that’s probably what we might be taking a look at in a future price case. Sure. We expect receipt of that price mechanism right here in Oregon as a part of that steerage. It’s a comparatively modest enhance to charges, about 1.5%, and that’s successfully simply to recuperate on capital investments that we’re making on this interim interval whereas we’re working by way of the multiyear price planning.
And so it’s truly, we predict, useful to have this modest incremental enhance within the interim in order that we keep away from a situation sooner or later the place you’ve gotten a bigger price shock for patrons. We’re all the time wanting opportunistically at acquisition alternatives that actually add long-term shareholder worth and would drive extra incremental progress. That being mentioned, we’re actually proud of the platform that now we have constructed. We’re in six states now with our water enterprise, and now we have some nice service territories which have plenty of natural progress embedded in them. So we’re very centered on executing, each investing within the enterprise, making certain well timed restoration on these investments, after which additionally taking a look at growth.
So we’re increasing our CTNs, or our regulated service areas, in a lot of our jurisdictions throughout the water enterprise. And we’re centered on greenfield progress as properly. So in Texas specifically, the place now we have seen unbelievable progress with our Sea Vitality enterprise, our water platform is quite a bit smaller in Texas, so we’re looking for methods to mix our enterprise growth efforts down there to realize better greenfield progress sooner or later. After which we all the time have a look at tuck-in acquisitions.
It’s in all probability rather less of a spotlight for us proper now given among the different alternatives that we see to drive shareholder worth within the close to time period and among the progress that we’re enthusiastic about in our current service territories. I’d say that we noticed a slowdown roughly round 2025 in new housing begins and completions. It does appear that the more moderen moderation in rates of interest and maybe different components has had a bit little bit of an uptick again the opposite means, which we predict is optimistic. However it’s fairly early to inform right here in 2026 the place that’s going. Actually, discount in mortgage charges is useful.
The Texas economic system extra typically continues to learn from plenty of progress by way of industrial and business exercise within the state, firms relocating there, saying new manufacturing amenities, and that drives residential progress as properly. So, we’re very optimistic long run concerning the progress within the Texas market, and I feel any discount in rates of interest is simply going to be a tailwind round that.
Chris Ellinghaus: Nice. Thanks for the replace. Admire it.
Justin Palfreyman: Yep. Thanks, Chris.
Operator: The subsequent query might be from the road of Alexis Kania with BTIG. Please go forward. Your line is open.
Alexis Kania: Good morning. I’ve a follow-up query on MX3, or truly two questions on MX3. First is only for the angle of desirous about the earnings profile related to that challenge. It feels like FERC-regulated initiatives. Would you have the ability to get AFDC over the course of development? And the second query associated to that’s, simply funding plan, you recognize, sort of each time the discover to proceed occurs, you add the roughly $300 million of CapEx. Would you continue to have the ability to fund any incremental fairness wants by way of the ATM in that occasion, or would it’s worthwhile to consider options there?
And simply so I heard the earlier query proper, the concept that goal could be discover to proceed could be the you’re concentrating on by the top of subsequent yr, 2027, proper?
Raymond J. Kaszuba: Yep. Good morning, Alex. So first on the funding plan, by way of the profile, as a result of we’re nonetheless working to dot some i’s and cross some t’s with our EPC contractors, we’re not offering the precise money circulate profile at this level. However you’re appropriate that we consider we might have the ability to fund any fairness by way of regular issuances beneath our ATM. After which to your first query, sure, we might additionally obtain AFUDC throughout the development interval.
Justin Palfreyman: Appropriate.
Alexis Kania: Okay. Nice. Thanks very a lot.
Raymond J. Kaszuba: Thanks, Alex.
Operator: As a reminder, please press star adopted by one to ask a query. The subsequent query might be from the road of Selman Akyol with Stifel. Please go forward. Your line is open.
Selman Akyol: Thanks. Good morning. Only a actual fast one for me. So very happy to see the storage growth, however I’m simply sort of curious, possibly you possibly can speak about different alternatives that you could be be seeing like that, and one specifically, simply desirous about you having any conversations, anybody approaching you on type of behind-the-meter alternatives?
Justin Palfreyman: Yeah. Thanks, Selman. The alternatives at Mist are long run in nature and pretty thrilling in that we do produce other reservoirs that may be developed for extra fuel storage past MX3. All of them have their very own traits and price profile and what comes with them. However it’s one thing that we regulate. We do consider there may be robust buyer demand for this. So MX3, all of the capability is spoken for with our current clients there. And simply what you’re seeing within the broader power constraints within the Pacific Northwest area, with one main interstate pipe serving the area, fuel storage is uniquely priceless right here.
So I do suppose there might be alternatives over the long run. It is vitally untimely to touch upon any specifics there. When it comes to behind-the-meter alternatives, it’s one thing now we have been approached by quite a few clients searching for entry to actually constant, dependable power with a purpose to web site information facilities and different sorts of amenities right here. We do consider that on a case-by-case foundation if there’s a storage potential use case there, however there may be nothing that now we have right this moment to announce on that entrance.
Selman Akyol: Okay. Thanks very a lot.
Justin Palfreyman: Thanks.
Operator: That can conclude our Q&A. I’d now like at hand the decision to Justin Palfreyman for closing remarks. Thanks.
Justin Palfreyman: Thanks, everyone, for becoming a member of us this morning. We actually admire the questions and your curiosity in Northwest Pure Holding Firm. We’re actually happy with what we achieved in 2025 and much more excited concerning the momentum we’re carrying into 2026. As you heard right this moment, we’re coming into this subsequent chapter with a give attention to our technique, execution, and persevering with to develop our utility enterprise. Please don’t hesitate to achieve out to Nikki with any additional questions, and thanks for collaborating right this moment.
Operator: This concludes the Northwest Pure Holding Firm This autumn 2025 earnings name. Thanks all for becoming a member of. You might now disconnect your strains.
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