Question-and-Answer Session
Operator
Ladies and gentleman, if you wish to ask a question please press * followed by 1 on your touchtone telephone. If your question has been answered or you wish to withdraw your question, press *2. Press *1 to begin, and please stand by for your first question.
Your first question comes in the line of Dan Fidell of Brean Murray.
Dan Fidell - Brean Murray
Good afternoon, gentleman. Thanks for the call.
Edward Graham
Hi Dan. How are you?
Dan Fidell - Brean Murray
Fine, thanks. Just a couple of questions—one is on utility and the other on the nonutility. First on the utility, can you give us some direction on what you expect out of new customer adds in the next year or two. We’ve got a lot of gas utilities this period reporting slowing customer growth. Can you just touch on that a little?
Edward Graham
Sure. We have slowed I guess to 1.7% to 2% growth level this year. I really believe that we will at least stay in that if not improve upon that in the coming year, largely driven by the conversion opportunities. We are having a lot of activity on the conversion front particularly from oil right now.
Dan Fidell - Brean Murray
The conversion opportunities are enough to at least offset the decline from the new customer. Is that what you are saying?
Edward Graham
Absolutely, we are finding, I think, there is a still a remainder of about 200,000 households that are heating with other than natural gas in southern New Jersey, many of them very close to our facilities, and the other thing that is not helping in terms significantly at the customer count but in terms of margin is we really have not had a slowing of the commercial market in terms of new additions, and in fact our experience has been in 2007 that that will more than offset the shortfall in residential customer addition.
Stephen Clark
Dan, this is Steve Clark. The margins on that commercial business have also been higher than we have enjoyed in the past, so we are getting a benefit there to help offset the lower overall number.
Dan Fidell - Brean Murray
That’s good news. You are actually in better shape than some others. Turning just quickly to the nonregulated side, can you talk a little bit more in terms of some of those additional projects you were mentioning in Atlantic City, MGM, and the other and just talk maybe a little bit about timing, what your outlook is for those and other opportunities on the onsite for Atlantic City and Las Vegas going forward?
- To read the full transcript on Seeking Alpha, click here »
