AltaGas Ltd T.ALA

Heating Days for 1stQTR 2021

[rfguysd]

Since  WGL,SEMCO,ENSTAR   are utilities that supply natural gas to its customers, heating days would  be a quick measure of Altagas’s  performance  for  the quarter  when compared  to last year. (Altagas uses a 30 year  heating day average in the purchase of natural gas for storage to serve its customers)

Since  the ultilies  are separated by vast distances , I categorized the areas into 3 and calculated the heating days for the 3 regions.   Given that the regions have  different customer base,  one uses  a weighted distribution to determine the overall effect of heating days on all 3 regions (similar to center of mass).

Data is taken from the website below.
www.degreedays.net
 
Since  the Washington , Michigan areas have  increased heating days as compared to last  year’s quarter,  I would expect increased revenues from the utilities  for this quarter.  Enstar  shows a  decrease but  its customer base is significantly lower than that of Washington and Michigan areas.

Customer growth is typically 1%  per year. 

 

		Washington		Detroit		Anchorage
		1st qtr-2020	1st Qtr-2021	1st qtr-2020	1st Qtr-2021	1st qtr-2020	1st Qtr-2021
Heating Days		1717.9	2058	2812	2978.4	4674	4170.2
Customers		1209000		313000		149000
Weighted mean Heating days    (customer Based) 1st qtr 20
			2186.43
Weighted mean Heating days    (customer Based) 1st qtr 2021
			2418.74
% change Between qtrs 20/21			9.60%

Results indicate  a 9-10%  increase in the weighted heat days for Altagas so  I  would expect  a similiar increase in revenue generated from the usage of natural gas. 

GLTA 
RFguy.

[Capharnaum]

They have decoupling mechanism related to volume so their earnings will only be slightly up. Don't expect 9%, more like 2-3%.

[GunnerG]

Capharnaum, care to explain the decoupling mechanism to those who are new to utilities?

[Capharnaum]

Decoupling is basically reducing the effect of number of customers and volumes on revenues. It's a general movement in gas utilities as the growth rate for the plant value slows down. It increases stability in earnings and reduces swings both on the upside and downside due to weather and the level of plant growth.

[Capharnaum]

Just to add that if you look at Altagas' latest presentation (March 3), you'll find a mention about "decoupled rate structure" in Maryland and Virginia with fixed rates protecting 70% of revenue on slide 5. This would go with my estimate that a 9% change in heating days would only lead to a 2-3% change in revenue.

[bossu]

Interesting note . Can you put the EBITDA  number on what the 1 671 000 customers has paid in Q1 2020. This would give anybody guest about the Q1 2021. -form rate increase -from the weather  And not on this topic. About Ferndale :do you know the number ofLPG  shippent in the Q1. No answer mean that you d'ont now!