ONE Gas Q3 2026 Earnings Call Transcript

ONE Gas (NYSE:OGS) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://events.q4inc.com/attendee/559129736

Summary

ONE Gas reported a 13% year-over-year increase in adjusted earnings per share to $0.53 for the third quarter, driven by strong execution across the business.

The company raised its 2026 adjusted earnings per share guidance to $4.95 to $5.01, citing constructive regulatory frameworks, disciplined cost management, and customer growth.

No additional equity is needed for 2026 as the company’s financing plan is complete, with a 10-year senior note issued at a 5.45% coupon.

Operationally, ONE Gas managed higher activity levels with flat O&M expenses year over year, benefiting from insourcing efforts and disciplined cost management.

The company highlighted several large load projects, including CNG and LNG opportunities, which are expected to contribute to future growth and system affordability.

ONE Gas plans to update its long-term guidance in early December and expects continued structural growth despite potential cyclical headwinds.

Full Transcript

OPERATOR

Good day and welcome to the ONE Gas third quarter earnings conference call and webcast. Today’s conference is being recorded. At this time, I would like to turn the conference over to Eric Biggers. Please go ahead, Mr. Biggers.

Eric Biggers

Thank you, Regina. Good morning everyone and thank you for joining us on our third quarter 2026 earnings conference call. This call is being webcast live and a replay will be available later today after our prepared remarks. We are happy to take your questions. A reminder that statements made during this call that might include ONE Gas expectations or predictions should be considered forward-looking statements and are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933, and the Securities Exchange Act of 1934, each as amended. Actual results could differ materially from those projected in any forward-looking statement. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings.

This call will include financial results and guidance with respect to adjusted net income and adjusted net income per share, which are non-GAAP financial measures as defined by the SEC. A reconciliation of the company’s GAAP net income and GAAP earnings per share to adjusted net income and adjusted net income per share, along with additional disclosures required by Regulation G, are available in the earnings release we issued yesterday. Joining us this morning are Sid McAnnally, Chief Executive Officer; Christopher Sighinolfi, Chief Financial Officer; and Curtis Dinan, President and Chief Operating Officer. And now I’ll turn the call over to Sid.

Sid McAnnally (Chief Executive Officer)

Thanks, Eric, and good morning everyone. We delivered another strong quarter and the message today is simple: our strategy is working. Third quarter adjusted earnings per share increased 13% year over year to $0.53, driven by execution across the business. Equally important, we saw the operating leverage we expected with O&M essentially flat year over year despite higher activity levels and external pressures which did not exist in the year-ago period.

This performance gives us confidence to again raise our 2026 guidance. We now expect adjusted earnings per share of $4.95 to $5.01, above our previously raised range. Our 2026 financing plan is complete with no additional equity needs for the year. This financial output is the clearest evidence of the strength and resilience of our durable growth model. We are benefiting from constructive regulatory frameworks, disciplined cost management, and continued customer growth. At the same time, our opportunity set is expanding. We continue to see large load demand developing across our service territories, including new CNG and LNG related opportunities, further demonstrating the versatility and importance of natural gas to our region’s growth, and we are pursuing that growth with discipline.

We’re focused on opportunities that fit our regulated business model, strengthen our system, and create long-term value. The addition of large load volumes allows us to spread system costs across a broader base, supporting affordability and keeping our 2026 customer bills flat to last year. As we enter the final quarter of the year, we do so from a position of strength: executing well today, raising our financial outlook, and building an increasingly compelling set of opportunities for tomorrow. Chris will walk through the quarter and our updated outlook in more detail. Chris.

Christopher Sighinolfi (Chief Financial Officer)

Thanks, Sid, and good morning everyone. As Sid noted, our third quarter performance was broad based. Adjusted earnings per share increased to $0.53 from $0.47 in the year-ago period. No single line item drove the improved performance this quarter. New rates and customer growth supported net margin. Texas House Bill 4384 provided incremental benefits and, as expected, O&M performance improved meaningfully from the first half of the year. Together, these factors elevated operating income and support the guidance raise we announced in yesterday’s release.

Texas House Bill 4384 remains an important part of our story as it reduces regulatory lag on eligible capital placed into service between rate filings. The benefit varies by quarter based on the timing of capital expenditures and the annual Gas Reliability Infrastructure Program cycle. As expected, the third quarter represented a smaller contribution than the quarters before it. The eligible capital balance will build again as we place additional investments in service.

The legislation is working as the state intended, but it is just one of several drivers supporting this year’s earnings growth. Our O&M performance deserves additional context. Expense was flat year over year in the third quarter, markedly lower than the 7.5% year over year increase we experienced during the first half of this year. This step down is consistent with the cadence we described on our second quarter call. This O&M result was achieved in a demanding operating environment. Line locate ticket volumes were up more than 7%, auto fuel prices added nearly $1.5 million of additional expense, and employee-related expenses were higher.

We absorbed these pressures and held O&M in line with 2025, reflecting the benefits of our insourcing efforts, tighter work planning, and disciplined day-to-day cost management. We expect moderate O&M growth in the fourth quarter and affirm our long-term expectation for annual O&M growth of 3% to 4%. As I’ve noted on prior calls, capacity release has provided another offset. This year we entered the refill season with more gas in storage than we had planned. Our gas supply team used this available transportation capacity to create value rather than allow it to sit idle. These actions helped offset the financial effect of lower first quarter usage associated with the warm weather and benefited customers under applicable sharing mechanisms. Through the first nine months of the year we recorded $3.7 million in capacity release benefits, with an equal amount captured by our customers.

Turning to financing, we have no additional financing needs for the remainder of 2026. Given financial outperformance, our equity needs for the year are covered by existing forward sale agreements at approximately $82 per share. In August we placed a 10-year senior note at a coupon of 5.45%, addressing this year’s long-term credit financing needs at an attractive rate. Our next debt maturity is not until the second quarter of 2029. Our near-term exposure to interest rates remains primarily through our use of commercial paper.

For example, at average planned levels of commercial paper, a hypothetical 100 basis point full-year movement in the Fed funds rate would impact full-year adjusted EPS by approximately $0.09. Long-term debt costs are recoverable in customer rates. We have been conservative in our planning for such issuances, so the recent movement in long-end yields does not materially alter our outlook. As we have noted, based on our year-to-date performance, we now expect adjusted net income to range between $313 million and $317 million, with adjusted EPS guidance of $4.95 to $5.01. Our new adjusted EPS range is entirely above our original 2026 guidance. We look to share more about our 2027 and long-term guidance plan in early December. Yesterday the ONE Gas board of directors declared a dividend of $0.68 per share, unchanged from the previous quarter.

Now I’ll turn to regulatory activities. Our 2026 interim filings are complete and current rates in all three states reflect the full requested amounts contained in this year’s respective filings. We believe our interim mechanisms help support timely recovery of capital investments and having them concluded provides additional visibility as we close out the year. In Kansas, the Gas System Reliability Surcharge became effective in October and provides a $14.3 million annual revenue increase.

This compares with $7.2 million requested and approved in 2025 and reflects the broader recovery provisions enacted under House Bill 2435. In Texas, our GRIP filing became effective in July and provides a $36.9 million annual revenue increase following consolidation. This marked our first statewide GRIP filing and reflects investments across the Texas system. In Oklahoma, interim rates associated with our performance-based rate change application became effective in June and provide a $28.7 million annual revenue increase.

In mid-October, the Oklahoma Corporation Commission approved the ALJ’s recommendation as filed. We expect to file our next Oklahoma general rate case in 2027 as required by tariff. And now, Curtis, I will turn things to you.

Curtis Dinan (President and Chief Operating Officer)

Thank you, Chris and good morning everyone. I’ll start with operations. As Chris noted, our coworkers managed a higher level of activity and still delivered better outcomes. Locate tickets increased 7% year over year and, most importantly, our damages per 1,000 locate tickets, a common industry metric, decreased 5% during the period. This is the type of improvement we expected from bringing more work in-house. Insourcing gives us greater control over training, scheduling and work quality.

We continue to advance line locating and watch-and-protect initiatives, and both the operating and financial benefits are becoming clearer as these programs mature. Capital execution remains on track. We completed approximately $229 million of projects during the quarter and $587 million through September. We continue to expect approximately $800 million of capital investment for the year. While the majority of this investment supports system integrity, safety and reliability, an increasing percentage supports growth projects allowing us to respond to increasing customer demands.

We view customer growth as one connected opportunity set. Residential growth remains consistent with recent years, while commercial, industrial and large load activity is adding another layer of opportunity. These projects allow us to increase revenue while improving utilization of existing assets and supporting affordability for all customers. Our data center project in Oklahoma City is an example of this. We were able to use our existing system and make targeted additions to meet the customer’s needs.

The project adds meaningful volume in one of our strongest growth markets and demonstrates how natural gas infrastructure can support the power requirements of new large load developments. Our line is complete and we anticipate the customer initiating service this month. Our project to serve an advanced manufacturing facility in El Paso is complete and will support 100 megawatts of on-site generation. This represents another type of our evolving customer profile. It also demonstrates the breadth of the opportunity across our footprint. A third project demonstrates our agility and the diversity of opportunities. A recent LNG-related opportunity in Texas was not part of our discussion on the second quarter call, but it entered our project funnel soon afterwards.

We have completed our commercial and technical reviews and are finalizing the project. We expect the project to begin construction this quarter and enter service in the first quarter of 2027. Projects like these are well suited to our system as they primarily leverage existing infrastructure. This reduces execution time and incremental capital while supporting an attractive customer outcome. They also demonstrate the value of the screening process we’ve built, allowing us to quickly identify opportunities that fit our regulated model and efficiently advance qualified projects towards service.

Western Farmers is still our largest project under development. The project remains on schedule and we continue to expect an in-service date in the third quarter of 2028. As a reminder, that project is the construction of a 43-mile 24-inch pipeline that will support a gas-fired generation facility in Southern Oklahoma. Taken together, these four large load projects represent approximately 22 million of additional annual revenue and 200 million of associated capital, and the opportunity set continues to build.

I’ve mentioned six late-stage opportunities on prior calls and new opportunities have been added to the list. Today we have eight projects in late-stage development representing approximately 3 gigawatts of generation and up to 1 Bcf per day of potential demand. We also have 20 additional opportunities in the early stages of evaluation and will provide updates as they advance. As we pursue these opportunities, customer affordability remains at the center of our strategy. New large load opportunities spread fixed system cost across more usage. The result is a balanced growth strategy that supports residential development, major economic expansion projects and customer affordability all at the same time. We are also investing in safety and reliability while adding new revenue, and we can do it while continuing to provide affordable natural gas service to 2.3 million customers.

Sid, I’ll turn it back to you.

Sid McAnnally (Chief Executive Officer)

Thanks Curtis. We have a strong core business supported by constructive regulatory frameworks and access to abundant natural gas supply. Our infrastructure is positioned near growing communities and emerging demand. Our teams continue to turn these advantages into growth and create value for customers and shareholders. I want to thank our coworkers for their focus and execution. I’m proud to work alongside them. We look forward to providing our annual guidance and long-term outlook in early December.

Operator, we’re now ready for questions.

OPERATOR

Thank you. If you would like to ask a question, please signal by pressing Star-1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press Star-1 to ask a question. We’ll pause for a moment to allow everyone an opportunity to signal for questions. Our first question will come from the line of Konstantin Lundy with Wells Fargo. Please go ahead.

Konstantin Lundy (Analyst at Wells Fargo)

Hi, good morning team. Congrats on a great quarter.

Sid McAnnally (Chief Executive Officer)

Thanks, Konstantin.

Konstantin Lundy (Analyst at Wells Fargo)

Maybe just starting off on the upcoming Oklahoma rate case, do you anticipate any unusual requests beyond reconciling invested capital, things like O&M, cost inflation or any opportunities to reconcile cost of capital with what we’re seeing with interest rates and tightness there.

Christopher Sighinolfi (Chief Financial Officer)

Hi Konstantin, it’s Chris. You know, our PBR mechanism, unlike the capital recovery mechanisms in the other states, does keep us fairly current with operating costs, expenses. You know, we get a cost of service true-up in that filing. So I think the things you focused on are the things we’ve been focused on. You know, cost of capital obviously has moved up pretty significantly on the credit side and on the equity side. And then there’s some provisions that have been introduced in some of other states that make discretionary capital allocations to those states more attractive.

And I think we’d seek to rectify that or balance that in Oklahoma.

Konstantin Lundy (Analyst at Wells Fargo)

Great. And maybe as a follow up, any thoughts around risks or opportunities with kind of the OCC turnover pending the election outcome?

Christopher Sighinolfi (Chief Financial Officer)

Not from our vantage point. You know, we have two commissioners that will remain on the commission; obviously today we’ll settle who their third counterpart is, but those are all folks known to us. I think they have a shared mindset and a track record that can be examined. That’s where we get to the view. So I think we feel comfortable going into that case.

Konstantin Lundy (Analyst at Wells Fargo)

And just one quick follow up, I guess for Curtis or maybe Sid, just in terms of the upside that you’re seeing from these large load opportunities and the positioning there, is there any way to frame CapEx sensitivity, timing and kind of reconciling with the longer term 5% to 7% EPS growth?

Curtis Dinan (President and Chief Operating Officer)

Hey, this is Curtis, Konstantin. Good to talk to you this morning. I think the way—it’s really hard to put it into a square box, so to speak, because each of these deals is a little bit different in terms of capital contributions, proximity to our system, which impacts the timing of how quickly they can come along. So if you think about the four projects I mentioned, two of those—Western Farmers, much longer lead time, it’s a much larger project, more capital intensive—versus the project that three months ago on this call wasn’t even on our radar at that point.

So that one came in and we’re going through the analysis and we expect to start construction this quarter and go into service next quarter. So they vary all over the board and that’s why I was trying to emphasize the need, number one, for our teams to stay agile in responding to the opportunities that are there. They do that by being in the market, working with the commerce departments, with different economic development arms so they have a good sense of what’s happening in our three service territories and then putting those through our funnel.

We can quickly analyze and respond to which of those we should be involved with and which of those really should go to someone else to work on. So what we’ll do for you is, as those become in greater light and better sensitivity around it, we’ll share that with you just as we’ve done on the past couple of calls. That will help you update your model through that period.

Sid McAnnally (Chief Executive Officer)

And Konstantin, I’ll take the second half of that question. To Curtis’s point, we’re seeing a good bit of diversity and the real advantage for us is where our system is relative to growth in our service territory. We’re just very fortunate to have a very dynamic service territory right now and opportunities that are across the spectrum, and we like that diversity. We think it de-risks the growth profile that we see. In terms of how CapEx impacts our growth CAGR, we really look forward to having the chance to visit with you about that in early December when we provide our forward guidance.

Konstantin Lundy (Analyst at Wells Fargo)

Excellent. Understood. I really appreciate the time today and congrats again.

Sid McAnnally (Chief Executive Officer)

Thanks so much.

OPERATOR

Our next question will come from the line of Julien Dumoulin-Smith with Jefferies. Please go ahead.

Julien Dumoulin-Smith (Analyst at Jefferies)

Hey, good morning team. Thank you guys very much for the opportunity here. Appreciate it. Good morning. You guys hear me, okay?

Sid McAnnally (Chief Executive Officer)

We can. Good morning.

Julien Dumoulin-Smith (Analyst at Jefferies)

Excellent. So look, without getting ahead of, you know, the forthcoming guidance here, how should we think about the key puts and takes for ’27, right? I mean just as you think about the baseline here, can you talk to the weather advantages that you have in ’26 and just the year-over-year comps in terms of being or executing within your CAGR targets from a ’26 to ’27 perspective. You’ve got so much of a tailwind in ’26 already. Just wanted to make sure we are calibrating appropriately maybe is the turn of arc.

Christopher Sighinolfi (Chief Financial Officer)

Hey Julian, this is Chris. It’s a great question. I would characterize it this way: there have emerged over the course of the past year a number of structural benefits. We’ve talked about the legislative yield of what the state passed in Texas last year. We had originally expected about a 35 cent adjusted EPS impact from that. Today I’d see it more along the lines of 45 cents in this year’s number. And that really has to do with processes that we’ve improved upon internally, whether that be field process or back-office process that can get things closed and into service more rapidly.

I think those are structural in nature and those will carry forward—the legislative change in Kansas which broadened the capital applicable for the GSRS mechanism. You see in my prepared remarks today, our $14‑ish million GSRS outcome this year versus $7 million in the year-ago period. That really just reflects the broadening of capital that I would see as a structural benefit. The improvements that Curtis has talked about for a number of quarters about insourcing and the bending of the cost curve on O&M, but at the same time yielding operational benefits that I see as structural and something that can continue.

And then the emergent large load opportunities, those continue to spool up and our processes I think are far more mature now in terms of how to swiftly evaluate those and commercialize those and bring those into execution. So those are sort of all structural beneficial items that I think you should take into account as you think about the future. Then you offset that maybe with some cyclical headwinds. You know, you have written about, others have written about the fact that, you know, the Fed raised rates in September and if you look at the dot plot has pegged another interest rate hike for the end of the year. Looks like their dot plot is stable in 27 off of the end of 26. But that would be higher than where we had assumed it to be. Fuel prices, I have noted those are also I would characterize as cyclical headwinds.

So there are structural benefits, there are cyclical headwinds. The structural benefits greatly outweigh in my mind the cyclical headwinds, particularly when those cyclical headwinds start to alleviate. And then the final thing, just because you raised it, is weather. You know, weather was still a headwind on 2026’s results despite the capacity release benefits that we were able to take into account. And then you’ve seen from our IR materials for several years now, the mechanical nature of the LNG rate case timing and the fact that we were already expecting 2027 earnings growth to be below trend just given the absence of the PBR and the more lengthy process associated with prosecuting a full general rate case.

Sid McAnnally (Chief Executive Officer)

So Julian, a couple of other ideas, just pulling up another 10,000 feet or so. I think the fact that we have demonstrated a level of performance through 2026 gives us a good bit of momentum as we go into 27 and we think about the forward plan. We’ve had the opportunity to see the yield of the insourcing that we’ve been talking about for years. As Curtis pointed out, we have continued to make conservative assumptions and those have served us well.

I think we’re starting to see the virtue of increased internal funding. So equity overhangs are lessened and you see us able to satisfy our equity for 2026 in a way that was very efficient. And finally, Chris mentioned large load projects. I think if you go back and look at our move into larger projects with the Austin System Reinforcement project, it allowed us to build a muscle around responding to growth opportunities. That was flexed with the Western Farmers project, a much larger project in terms of scale and throughput, and with a commercial counterparty. And the development of that commercial flexibility has allowed us to pursue the opportunities that Curtis is talking about, whether they’re very short term because they’re proximate to our system, or they’re longer term and we’re working with folks across our region.

So one of the things that we’re excited about as we look toward guidance in 2027 is a level of confidence in our ability to execute around this and the virtuous outcome that’s come from the work that we’ve done over the past three years to prepare for these opportunities.

Julien Dumoulin-Smith (Analyst at Jefferies)

Got it. So it sounds like, look, you obviously had an incredible 26 on a variety of different factors, but it sounds like you still hope to be able to maintain the trajectory into 27. And then maybe to nitpick a little bit, how do you think about those large loads? I mean, you even speak here about some of the CNG and LNG opportunities. Are those timely for 27? Or how do you think about the funnel of opportunities translating into more tangible revenue uplifts, if you will?

Curtis Dinan (President and Chief Operating Officer)

Julian, this is Curtis. Let me just kind of walk through a couple of those buckets—one of the four that I mentioned in my comments. Two of those, we expect to be in service here in the fourth quarter and contribute a full year of revenues next year. One of those, the LNG opportunity that I referenced, we do expect that to come online in the first quarter of next year. And then of the eight late stage, I would expect over the next one to two quarters that we’ll have more to share around those, the nature of those projects and the timing of it.

But as the point that Sid was making, these vary across all three of our service territories. There’s opportunities in each, and it ranges from the data centers that everybody talks about, but it’s also importantly advanced manufacturing, it’s traditional manufacturing, it’s CNG, LNG, and electric generation—utility-scale generation. So obviously there’s the Western Farmers, and there’s other opportunities with folks that we’re talking to about possibilities down the line.

Those larger projects like utility scale obviously take a bit longer, but not only for perhaps the natural gas assets, but the construction that the generation takes to get put into place. So there’s a combination of some that are very near-term hits and then some that we’re building for the future that will fill in buckets in the 28, 29, and 30.

Julien Dumoulin-Smith (Analyst at Jefferies)

Got it. And just a quick one more thematic to the moment. The strong El Niño has got folks across the natural gas market very much focused on the prospects here this winter. How do you think about your planning and latitude within your own outlook? Again, I know that this is more of myopic 26, but also 27 here. How do you think about, again, the latitude, whether it’s cost flexibility or capacity release or otherwise to adapt to another warm winter and stay on schedule?

Again, I get that you have to plan against a normal weather scenario, but again, just for the purpose of what we see coming here, if you have any comments or thoughts.

Sid McAnnally (Chief Executive Officer)

Sure, Julian, I think you can look back at the operation of our weather norms and see good performance. They functioned as they were designed to function. 2026 was an interesting year because we had, as you point out, a very mild winter. But it’s easy to forget that we had a significant winter storm spike right in the middle of no winter. So to a degree it was an anomaly when you think about the way that weather normalization works and the way that it’s intended to work, so we don’t have concerns about the function of our weather norm.

When you think about the challenges that systems face, I’d pull back and even go broader than your question and say you look at what’s happened since Winter Storm Uri and the way that we were able to adapt our system to that storm. We had very few outages, as you know, but we also learned how to harden the system in a way that prepares us whether we have a very harsh winter or we have a very mild winter. The capacity release that Chris mentioned and you repeat, I think, is just an example of the flexibility of our mechanisms and the way that our folks are able to sort of shift into whatever is required to best serve our stakeholders.

So we feel pretty good about the way that we go into 27, both from an operational perspective and a regulatory perspective.

Julien Dumoulin-Smith (Analyst at Jefferies)

Excellent guys. Thank you. See you soon.

Sid McAnnally (Chief Executive Officer)

Okay, thank you, Julian.

OPERATOR

Our next question will come from the line of Dylan Lipner with Mizuho. Please go ahead.

Dylan Lipner (Analyst at Mizuho)

Hey everyone, congrats on a good quarter. Just wanted to kind of touch more on this new Texas LNG project that you mentioned—kind of give size and scope of it and, you know, if you’re seeing any more projects that are in that, you know, eight late-stage or that 20 early-stage opportunity set you mentioned?

Curtis Dinan (President and Chief Operating Officer)

Dylan, this is Curtis, and I don’t have a lot of details to share because our customer hasn’t announced those details. So we would wait for them to do that. But to your broader question, there are other opportunities like that in Texas that folks are pursuing, and we’re in one of them very late-stage discussions to do both CNG as well as electric generation for the grid. So I think those projects both demonstrate changing interest in where our product can be utilized and how other companies are looking to take advantage of that.

So again, we’ll continue to provide more detail as our customers do that and as those advance along in the commercialization of those projects.

Dylan Lipner (Analyst at Mizuho)

Understood. And then the capital that was going to that project, that part included in the 100 million for 2026,

Christopher Sighinolfi (Chief Financial Officer)

That project is being funded by us. Yes.

Dylan Lipner (Analyst at Mizuho)

Okay, great. That’s all I got. I appreciate the color there. Congrats to the quarter again.

Christopher Sighinolfi (Chief Financial Officer)

Thanks so much. And thanks for the question.

OPERATOR

Our next question will come from the line of Paul Fremont with Ladenburg. Please go ahead.

Paul Fremont (Analyst at Ladenburg Thalmann)

Thanks, and congratulations on a good quarter. I guess my first question: good morning. Have you guys considered using interest rate swaps to hedge some of the exposure on your short-term debt?

Christopher Sighinolfi (Chief Financial Officer)

Hey Paul, this is Chris. Yes, we have. We’ve studied that extensively over the course of the past year. We spoke to it a little bit in response to a question on the second quarter call. We studied it and we know how the mechanism works, we know how we would implement it, but it wasn’t attractive to us and we did not take action on it. And I don’t expect, given the current framework, that we would. But we have explored it and we know what that looks like.

Paul Fremont (Analyst at Ladenburg Thalmann)

Got it. And then second question: on the eight projects that are in late stage, can you give us any quantification of the capital spending opportunity that goes with those eight projects?

Curtis Dinan (President and Chief Operating Officer)

Paul, this is Curtis. And at this point where the stages that those are, we’re also negotiating what that funding would look like. So in some of these cases it will be more customer funded or fully customer funded, and some of these will be funded entirely by the company. So it depends on the nature of the project that we’re putting into place, what other uses for that expansion we may be able to utilize, as well as what the revenue is that it’s generating.

Keep in mind that every project also goes through a prudency review. So we have to meet our prudency requirements in each of our three states, which serves to protect our existing customer base. So each one of those will vary a little bit. And like I did on the four projects we talked about, we’ll continue to provide that additional guidance both in terms of revenue and capital once they get to that point. So again, as I mentioned on a comment earlier, it’s a little hard to put them in a square box to say—I’ll think about it this way—if you have this volume or this number of projects, because it can be the project like the LNG project I described that is very close to our system and will take minimal time to connect, or a longer-term, fuller, much larger development like the Western Farmers project that takes a number of years to execute. It’s across that whole spectrum that we see in that next eight projects that I mentioned.

And Paul, as you know, this is all done in a regulated environment. So we’re also mindful of the affordability implications for all of these and really pleased that we’re able to have the kind of performance that we’ve had in 2026 and still perform very well from an affordability perspective.

Paul Fremont (Analyst at Ladenburg Thalmann)

No, and I think I get it. But first of all, I think investors are mostly focused on the capital that you would be putting up in projects as opposed to the portion that potentially would be funded by the customer. Is there sort of like a, maybe a general type number? Are we talking, you know, $100 million plus? Are we talking, in other words, without giving sort of a specific project-by-project breakout, I think investors just want to know order of magnitude.

Are we talking, you know, $50 million, $100 million, you know, what general neighborhood does that opportunity represent? And that would just be for your portion of the spend, not for anything that’s funded by the customer.

Christopher Sighinolfi (Chief Financial Officer)

Yeah. Again, Paul, I appreciate the desire to have the greater breadth and depth into those numbers, but it really is, I know the total estimates of those projects, but until commercial negotiations complete, I really can’t get more specific around what those dollars may look like across those projects. But we will make, when we put out our updated five year guidance, the projects that we expect and the capital we’re expecting, we’ll have that included in, as part of that guidance, both in terms of revenue and in terms of the capital that we project needing over the five year plan.

Paul Fremont (Analyst at Ladenburg Thalmann)

Great. Thank you very much.

OPERATOR

Thank you, Paul. Our next question will come from the line of David Pass with Wolfe Research. Please go ahead.

David Pass (Analyst at Wolfe Research)

Good morning.

Christopher Sighinolfi (Chief Financial Officer)

Good morning, David.

David Pass (Analyst at Wolfe Research)

Thank you for the helpful color on the ’27 drivers, Chris. Appreciate that. One maybe related mechanical question. Next month are you planning to rebase the new CAGR off the original ’26 guide or today’s revised guide?

Christopher Sighinolfi (Chief Financial Officer)

Hi David, it’s Chris. Yeah, thanks for the earlier appreciation of my comments. In terms of rebasing, it has always been our practice to use the current, the midpoint of the current guidance as the anchor point. So we would not use, you know, an adjusted EPS of 4.89. We would instead use the 4.98 midpoint of what we’ve released today. That would be consistent with past action. That’s our intention.

David Pass (Analyst at Wolfe Research)

Great, thank you. And I know you subsequently revised or rebased off the ’25 actuals earlier this year and I think at the time you pointed to 2030 of about $6. Just given the drivers that you noted earlier today and maybe using the current interest rate curve, is there any indication that you will not be around that $6 or even better,

Christopher Sighinolfi (Chief Financial Officer)

You know, we’ll have a full refresh in December. I think if you go back to the conversation I was having with Julian about structural elements versus cyclical elements, you know, there are elements that have emerged in our story that were not present a year ago that I would say is structural in nature and beneficial. It’s a matter I think for you to determine amongst the cyclical headwinds, are they, have they abated by that point? For example, if you were to look at what the FOMC says about itself, at least in its latest dot plot by 2030, it is very much on a path towards neutrality. Neutrality as they’ve identified it at 3%. Does that hold or do you use that? Do you have to use some economist forecast at Wolfe? I mean, I don’t know what your process is versus another analyst.

It has been our practice to use to have a view that’s informed by what those actors say about their own actions. And so that’s probably as much as I’m comfortable saying today.

David Pass (Analyst at Wolfe Research)

Fair enough. That’s why I did say the current interest rate curve. But fair enough. So maybe one last question, just you’re within the ’27–’30 planning period as you stand today, and I know you’re going to give us an update, but I think you said you’re all done with equity for this year, but should we still assume, again, just through ’30, the same amount of total equity needs that you identified earlier this year?

Christopher Sighinolfi (Chief Financial Officer)

Yeah, we’ve made no change in that comment. You have two things sort of counteracting. One is outperformance of the business and two is the opportunities Curtis is talking about that will be consumptions of cash. And so how those two things net each other out in the revised plan you will see in a matter of a couple of weeks. But at this point I think it’s safe to assume the same range we had provided to you before.

David Pass (Analyst at Wolfe Research)

Great, thank you.

OPERATOR

Thank you David. Again, press star one to ask a question and our next question will come from the line of David Rolled with Bank of America. Please go ahead.

David (Analyst at Bank of America)

Hey guys, thanks for the time. Within large load, the CNG and the LNG opportunities, just wondering if you could compare and contrast those versus a traditional data center large load, separating with it any kind of additional timeline, risk differences in economics, new challenges, how much existing infrastructure versus new is needed. Any color there would be helpful.

Curtis Dinan (President and Chief Operating Officer)

David, this is Curtis. Let me just use a couple of the examples that I was referencing earlier in terms of your question around the ability to respond. It really depends on where each of those customers decides to locate their facilities and what type of facilities those are. In the case of the LNG opportunity, that is not construction of a large facility. They bring those trains in on semi trailers, effectively, and so they can go into service very quickly.

For us to expect to start construction this quarter and it to be in service next quarter, that tells you it’s pretty proximate to our location where we already have assets and our ability to respond pretty quickly and the customer’s ability to be on site and up and running very quickly. In the case of data centers, as you know, those take quite a while to construct physically, the buildings themselves, as well as all the internal components and everything. So those take a little bit longer to develop and for us to begin service to those. Most of the projects that we’re talking about and those that we focus on are those where we’re going to be really the opportunity for that customer to get gas service. And so we’re able to collect our tariff to do that.

And if we’re going to use up capacity of our system in this environment, we’re going to be looking to do that where we get our max tariff rates to be able to do it. So that protects the economics of the project and, equally important, it protects affordability for all of our customers because it pays its share, it absorbs part of those fixed costs. And so that’s one of the ways we look to high grade these projects. We’re not chasing every opportunity that comes along and we’re not going to chase projects down to a lower and lower economic point.

We’re going to stay focused on how do we best utilize our system to serve that customer as well as protect our existing customers. So I recognize that the boundaries of that answer were pretty wide, but that’s the reality of the environment that we’re operating in.

David (Analyst at Bank of America)

Yep. Fair enough. Okay, good. Thank you.

OPERATOR

Thank you, David. And that concludes the question and answer session. I’d now like to hand it back to the ONE Gas team for closing remarks.

Sid McAnnally (Chief Executive Officer)

Thank you again to everyone for your interest in ONE Gas. We look forward to seeing many of you at conferences in New York the second week of December. Our quiet period for the fourth quarter starts when we close our books in early January and extends until we release earnings in mid to late February. We’ll provide details about the conference call at a later date. Have a great day.

OPERATOR

This concludes the ONE Gas third quarter earnings conference call and webcast. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.