Please stand by. We're about to begin. Good morning, ladies and gentlemen. Welcome to the New Jersey Resources Fiscal 2023 second quarter conference call and webcast. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speakers' prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, you can press star one again. Now, at this time, I would like to turn things over to Mr. Adam Prior, Director of Investor Relations. Mr. Prior, please go ahead, sir.
Thank you. Welcome to New Jersey Resources Fiscal 2023 second quarter conference call and webcast. I'm joined here today by Stephen Westhoven, our President and CEO, Roberto Bel, our Senior Vice President and Chief Financial Officer, as well as other members of our senior management team. Certain statements in today's conference call contain estimates and other forward-looking statements within the meaning of the securities laws. We wish to caution listeners of this call that the current expectations, assumptions, and beliefs forming the basis for our forward-looking statements include many factors that are beyond our ability to control or estimate precisely. This could cause results to materially differ from our expectations as found in slide one. These items can also be found in the forward-looking statement section of today's earnings release furnished on Form 8-K and in our most recent Forms 10-K and 10-Q as filed with the SEC.
We do not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. We will also be referring to certain non-GAAP financial measures, such as Net Financial Earnings or NFE. We believe that NFE, Net Financial Loss, Utility Gross Margin, and Financial Margin provide a more complete understanding of our financial performance. However, these non-GAAP measures are not intended to be a substitute for GAAP. Our non-GAAP financial measures are discussed more fully in item seven of our Form 10-K. The slides accompanying today's presentation are available on our website and were furnished on our Form 8-K filed this morning. Our agenda for today is found on slide three. Steve will begin with this quarter's highlight, followed by Roberto, who will review our financial results. We will open it up for your questions.
With that said, I will turn the call over to our President and CEO, Steve Westhoven. Please go ahead, Steve.
Thanks, Adam. Good morning, everyone. We had another solid quarter executing our strategy and delivering results in line with our expectations. In addition, we are reiterating our fiscal 2023 NFEPS guidance range of $2.62-$2.72 per share. Overall, we reported Net Financial Earnings of $1.16 per share in the second quarter of this year. During the first calendar quarter, much of the eastern half of the country experienced the warmest weather in recorded history. Remember, our utility, New Jersey Natural Gas, is decoupled, meaning the Utility Gross Margin is insulated from changes due to weather and customer usage. We continue to see a trend in strong customer growth at New Jersey Natural Gas and achieved higher Utility Gross Margin for the period.
In addition, we were able to provide cost savings to our customers by issuing a bill credit and lowering rates following the recent decrease in natural gas prices. We will continue to monitor market conditions and use our expertise to manage costs and provide savings to our customers whenever possible. At CEV, we placed an additional 6 commercial solar projects into service, growing our installed capacity by over 13% since the end of our fiscal year. This increases our total solar in service to 440 megawatts. In our Storage and Transportation business, we've benefited from solid operating performance from Adelphia Gateway and Leaf River and continue to explore potential organic growth opportunities to maximize those assets. Finally, although the winter was unusually warm, which resulted in lower energy usage, energy services generated another profitable quarter.
Turning to slide five, as I noted earlier, we are reiterating our fiscal 2023 NFEPS guidance range of $2.62 to $2.72 per share. We initially raised this guidance by $0.20 following our first quarter results due to higher contribution from New Jersey Natural Gas and outperformance at Energy Services during Winter Storm Elliott in December of last year. Our expected long-term NFEPS growth range remains at 7%-9% from our original 2022 guidance, and we expect to be at the higher end of that range for fiscal 2024. New Jersey Natural Gas had a strong quarter, as highlighted on slide six. We invested $195 million in New Jersey Natural Gas during the first six months of fiscal 2023, with over 37% of that CapEx providing near real-time returns.
We reported strong customer growth, adding over 4,000 new customers in the first six months of the year, compared to approximately 3,600 customers during the same period last year. As indicated on prior calls, we expect to file our next rate case in fiscal 2024, consistent with the timeline of our major technology investments. Moving to slide seven, we continue to see positive momentum at Clean Energy Ventures. Since the end of fiscal 2022, we have placed 53 MW of new solar projects into service. We continue to maintain a robust and diverse pipeline of solar investments in various stages of development, including greenfield and late-stage projects both within and outside of New Jersey. We continue to innovate, producing clean, renewable energy through the repurposing of landfills and deployment of milestone floating solar arrays.
Over the past few months, we have seen progress in New Jersey's solar policy. In December, New Jersey Board of Public Utilities approved the state's competitive solar incentive, CSI Program, for projects over 5 megawatts. Through this program, New Jersey seeks to award 300 megawatts of solar projects per year. Although specific timing results are still to be determined, we see that the CSI Program is another sign of New Jersey's continued commitment to its renewable energy targets. With that, I will turn the call to Roberto for a review of the financial results. Roberto.
Thank you, Steve. Good morning, everyone. Slide nine shows the main drivers of our NFE for the second quarter and first half of fiscal 2023. For the first half of fiscal 2023, we reported strong year-over-year improvement in our consolidated results. Year to date, NFE was $222.6 million, or $2.30 per share, compared with $196 million, or $2.04 per share last year. This represents a 13% improvement in our NFEPS for the period. For the second quarter of fiscal 2023, we reported NFE of $112.3 million, or $1.16 per share, compared with $130.2 million, or $1.36 per share last year.
During the quarter, higher Utility Gross Margin at New Jersey Natural Gas and higher revenues at our S&T and CEV businesses were more than offset by higher depreciation and interest expenses, which now include the impact of Delta Gateway being fully placed into service. Lower Financial Margin at Energy Services, higher expenses related to parent investments, and a $5 million difference in the timing of incentive compensation accruals related to our NFE performance earlier this year. Turning to our capital plan on slide 10, as we have said before, for fiscal year 2023 and 2024, we expect to invest between $1.1 billion and $1.4 billion across the company. Our capital plan remains on track to achieve these investment levels.
We expect to tighten our CapEx ranges in future quarters, specifically at CEV, as PJM's interconnection timelines and the regulatory outcomes on certain New Jersey projects become more clear. We're comfortable with the lower end of our CEV CapEx range for fiscal 2023 and have a number of opportunities that could move us toward the higher end. Our capital projections for fiscal 2023 and 2024 are anchored by strong cash flow from operations and consistent with our long-term NFEPS growth target of 7%-9%. While we have no plans to issue block equity, our existing dividend reinvestment program includes a waiver discount feature that allows us to raise equity on an opportunistic basis. With that, I will turn the call back to Steve.
Thanks, Roberto. Turning to slide 11. In March, New Jersey's Governor Phil Murphy announced a series of executive orders with revised plans and targets for the state's clean energy future. We embrace our company's role in transitioning the state to cleaner forms of energy and reaching long-term carbon emissions reduction goals. NJR has been working toward decarbonization and a cleaner energy future for many years, and it's executing on our strategy to dramatically reduce greenhouse gas emissions. With the strong encouragement of the state, we've invested billions to reduce emissions through energy efficiency, modernize our infrastructure, and advance technological innovation. We've had preliminary discussions with the state policymakers, and we'll continue to collaborate with our regulators and other utilities in the state as these processes unfold.
In conclusion, NJR is an energy infrastructure company focusing on meeting the needs of our customers, as well as aligning with a clean energy future. The reaffirmation of our guidance range and long-term growth rate reflects the strength of our complementary portfolio of businesses. I also want to thank all of our employees for their hard work and contribution. With that, I'll now open the call for questions.
Thank you, Mr. Westhoven. Ladies and gentlemen, at this time, if you do have any questions, again, please press star one. If you do find that your question has been addressed, you can remove yourself from the queue by pressing star one again. We'll take our first question this morning from Mr. Richard Sunderland of J.P. Morgan.
Hi, good morning. Thank you for the time today.
Hi, Richard.
Starting with CEV, you know, I saw the shift in CEV's pipeline from New Jersey to out-of-state. Curious if you could speak to how the regional efforts are unfolding and how you see the relative attractiveness of opportunities out-of-state versus in-state at this point, and particularly compared back to your expectations a few years ago when you launched this broader initiative?
Yeah, Richard, thanks for the question. you know, if you go back to our 2020 Investor Day, you know, we highlighted that we had a strategy going forward to diversify our solar investments outside of the state of New Jersey. That was really based on, you know, our ability and the capability that we've built here as a company to be able to invest in this place and certainly provide returns. also a little bit of a diversification, you know, outside of the state of New Jersey. you know, I think it's healthy. It's accomplished for capital as we look at projects and being able to get the highest return.
remember that, you know, as we look outside the state, we look for a similar risk profile, one that really aligns with our overall company to make sure that the structure, you know, really fits and, you know, kind of simulates, you know, subsidies that are REC credits or Feed-in Tariffs and things like that. The percentage, you know, seems to be around the 60/40 level.
We expect that to continue to go forward. Really a shift that we expected and planned for in our strategy and overall, you're seeing some of the success by some of the investments outside the state of New Jersey.
Got it. That's very helpful context there. Just a quick follow-up on that front. In consideration of what you're seeing here and those balance of opportunities, could you just, you know, revisit again, you know, what you're looking for in kind of revising the CapEx outlook here? Particularly what exactly would move you to the high end, you know, in consideration of both New Jersey and these regional opportunities?
Yeah. I think, you know, for this year, you know, we've stayed in the range of our CapEx expectations. You know, we feel comfortable at the lower end of the range. Still have a lot of the fiscal year left. We've got, you know, some decent amount of deal flow, you know, through this space, you know, waiting for regulatory approvals and, you know, permits and things like that. You know, we stayed the range for what it is. You know, we see potential to be within that range, you know, through the end of the year, if that's a helpful answer to your question.
Got it. Certainly. Then shifting gears, could you parse the Storage and Transportation results a little more finely? Curious what drove the year-over-year decline and, you know, considering you've had some of the, I guess, hub services outperformance over the past few quarters, is this now more of a normalized quarterly base for two Q at least?
I'm gonna ask Roberto to take that question because there's a little bit of a transition from, you know, construction going to an active operation.
Hey, Rich. This is Roberto. I think that the more helpful way to look at this is on a year-to-date basis. Year-to-date, actually the business unit is up. When you parse it out and break it into pieces, you will see the revenues are actually dramatically up. What's affecting that quarter in particular is that you have higher depreciation and amortization because remember Adelphia came into service at the end of last fiscal year, and you have higher interest expenses, and we don't have any more paid AFUDC equity. When you break it from that perspective, we're actually doing better than last year, and the complexion of those earnings are much better. All of these discussions now compared to some non-cash earnings we had the year before.
Got it. That was very clear. Thank you for that, and thank you for the time today.
All right. Thanks. Thanks, Richard.
Thank you. Just a reminder, ladies and gentlemen, please press star one for any questions. We go next now to Travis Miller at Morningstar.
Thank you. Good morning.
Hey, Travis.
Given the first half fiscal year performance here so far and thinking about the high end of the range, any thoughts on pulling forward any kind of cost or investments? Is that a possibility? Is that something you're thinking about from 2024 to set that up?
You know what? I think, you know, we do all the things that we can to, you know, set up the fiscal year. Certainly, you know, our guidance speaks for itself. I really don't have anything to speak about saying, you know, we're gonna be moving things around to that point. You know, we've got our projections, we've got our earnings as we stated, and I let those speak for themselves.
Okay. Very good. Similar to the last question on Storage and Transportation, what about the Energy Services quarterly delta there? Any details that you could provide on that?
I mean, it was a dramatically different year, you know, last year than this year, you've got a decent, you know, delta. You know, our Energy Services group, you know, going back to the last quarter, you know, it's performed very well. It allowed us to a certain extent, you know, raise, you know, guidance for this year. They're still able to achieve positive earnings in this quarter, you know, which is a very low energy use quarter. You know, you know, they're doing well. It's the only color that I can give. The quarter-to-quarter comparisons I know can be a little bit difficult because of when volatility happens and how that this unit performs on a quarter-to-quarter basis.
Okay. usage being a big factor, safe to say?
Yes. Yeah. I think there was more-
Yeah. Travis, this is Roberto. Yes, to add to what Steve said. What I would say is that, once again, looking at the year-to-date, the business is actually performing better than last year. On an overall basis, we're doing better.
Okay. Very good. That's all I had. Thanks.
Thanks, Travis.
Thank you. We go next now to Robert Mosca at Mizuho.
Hi. Thanks, everyone. On your cash flow guidance, it didn't seem like there was a change in the near-term outlook, on your CFO guide despite the fall in gas prices. Can you just talk about the gives and takes as to why you're not modeling a working capital benefit there? Is that just conservatism?
Hey, hey, Robert, can you just repeat the beginning of that question? I didn't catch that.
Sure. Yeah. Sorry. There wasn't a change in your cash flow from operations guidance, though we might have seen a little bit of a working capital benefit here. Could you just talk about why that's not being modeled in your outlook? Is that conservatism or something else?
Robert, this is Roberto. Our cash flow from operational guidance for the year has not changed in last quarter. What you can see once you look at our results is that we're performing very, very well actually. Remember what you see there in our 10-Q is our year-to-date results. Again, for the year, we're not modifying those projections, and we are exactly within our expectations.
Right. I guess I'm asking if I think in a prior quarter you'd said there was a working capital potential uplift if gas prices were to fall and, you know, are you just being conservative with that outlook for the next couple years on gas prices?
Hey, Robert. It's hard to understand you. It's something wrong with the line here. Can you speak a little bit maybe louder and repeat that question? Apology for that.
Sorry, guys. Yeah. Maybe this will be better. I was just wondering if we were.
Much better.
Better?
Yeah.
I guess what I'm asking is, you know, I think in a past quarter you'd said that we might see a working capital benefit if gas prices were to fall, and that was kind of an element of conservatism you were taking in your guidance. Just wondering why that's maybe not being included in the 23 and 24 guidance yet?
Yeah. We haven't fully updated that yet. You're right, we may have some upside in especially in 2024, which is not incorporating the numbers. Again, it's too early to say that, right? We're still too early in the year.
Okay. That's fair. Separately, just I think you mentioned in your pre-prepared remarks, looking at opportunities in Storage and Transportation, it sounds like maybe along the Gulf Coast. Can you kind of expand on those thoughts? Is that within Leaf River? Are there opportunities you're assessing around that asset or outside of it?
Yeah. Outside of it. Nothing to announce, you know, I'll say that. You know, you can certainly see, you know, volatility in the Gulf Coast region, you know, growth in usage either from electric generation or from the LNG, you know, liquefiers that are being built down there. It's putting a lot of pressure on assets. A lot of conversations, you know, talking about, you know, potential expansions and enhanced services and things like that. Just giving a little bit of color around those markets as these, you know, natural gas demands grow. You know, our assets are in good places to be able to serve some of that. Again, nothing to announce. We are having conversations.
Okay. Appreciate it, Steve. Last one from me is just any impacts to your system from the early in-service of Regional Energy Access?
Any impacts, I mean, we'll certainly get, you know, more supply to the region, which is, which is very much needed. You know, you can see by the high gas prices that we've seen in the past. For CityGate, that there's an extreme amount of demand that's here and, you know, our utility is the contractor for that. More reliable supply on firm contracts, you know, is always welcome to the area and, you know, we'll be using that contract when it comes into service.
Okay. Great. Thanks for the time, everyone.
Thank you.
Thank you, Mr. Mosca. Ladies and gentlemen, just a final reminder, any further questions, please press star one at this time. Ladies and gentlemen, it appears we have no further questions today. I'd like to turn the conference back to the management team for any closing or additional remarks.
I'd like to thank everybody for joining us this morning. As a reminder, a recording of this call is available for replay on our website. As always, we appreciate your interest and investment in NJR, and we look forward to seeing many of you at AGA later this month. Thank you, everyone, and goodbye. Have a good morning.
Thank you, Mr. Westhoven. Ladies and gentlemen, again, that does conclude the New Jersey Resources Fiscal 2023 second quarter conference call and webcast. We'd like to thank you all so much for joining us and wish you all a great day.