New Jersey Resources Corp. (NYSE:NJR) Q4 2019 Earnings Conference Call - Final Transcript
Nov 19, 2019 • 10:00 am ET
Stephen D. Westhoven
walk you through the accomplishments from New Jersey Natural Gas. First, we reached settlement with the New Jersey Board of Public Utilities on our rate case with the $62.2 million increase to rates that went into effect on November 15.
We appreciate the productive relationship we have with our regulators and the continued commitment to investing in our energy infrastructure. Second, we met our annual customer growth target of 1.8% in fiscal 2019. The current demographics in fuel pricing dynamics in our service territory will continue to drive new residential construction and conversions. Third, the Southern Reliability Link received its last remaining permits for the final phase of construction. We currently expect an in-service date of 2021 recovery for SRL will come in the future rate case proceeding. We also replaced 72 miles of bare steel main through SAFE and continued the hardening and reinforcement of our system through NJ RISE.
And finally, during 2019 we filed with the BPU for our new infrastructure investment program. We expect to conclude the regulatory process during 2020. On Slide six, I will update you on several New Jersey Natural Gas's growth drivers. Our utility earnings growth is primarily driven by its ability to expand its rate base and customers. As you can see in the upper left, we expect continued customer growth driven by new construction and conversions. On the top right we expect rate based growth to exceed 10% per year through 2022, given our future capital investments.
On the bottom left, you see the breakdown of our capital projects, in 2019, our capital investment increased by more than 40%, mostly driven by SRL. In 2020, we expect our capital spending to increase 28% as we upgrade our system, construct SRL and invest in necessary technology improvements. And finally, shown in the bottom right, 35% of our capital -- our expected capital spend in 2020 will earn near immediate returns through customer growth in annual recovery mechanisms.
Moving to Slide seven. I'd like to highlight our environmental record. We have the lowest number of leaks-per-mile of any natural gas utility in New Jersey and in fact, we have reduced methane emissions by more than 900 metric -- 900 metric tons since 2015. In 2019, we were the first company in New Jersey to join ONE Future, an organization dedicated to voluntarily achieving meaningful reductions in methane emissions. We were also the first utility in the country to purchase a portion of our natural gas supply through the TrustWell Responsible Program, which evaluates and verifies responsibly source natural gas for customers. We remain committed to meeting our customers' expectations for safety and reliability and environmentally responsible way. This will always be a top priority for our company.
Moving to Slide eight, the strategy for NJR Midstream is to invest in pipeline and storage facilities that benefit from our extensive experience in the Natural Gas marketplace. With long-term objective generated stable earnings and cash flows, we target investments in natural gas storage and