Chesapeake Utilities Corp (NYSE: CPK)

Chesapeake Utilities Corporation (CPK), a Delaware corporation, operates primarily in the Mid-Atlantic region, North Carolina, South Carolina, Florida, and Ohio. It is an energy delivery corporation involved in the distribution of natural gas, electricity, and propane, as well as the transmission of natural gas and the generation of electricity and steam. CPK's strategy focuses on growing earnings from a stable regulated energy delivery foundation and investing in related businesses and services that offer opportunities for returns greater than traditional utility returns.

CPK's main business activities revolve around energy delivery. It operates in two segments: Regulated Energy and Unregulated Energy. The Regulated Energy segment is comprised of natural gas and electric distribution operations, as well as natural gas transmission services. This segment serves approximately 120,000 residential and commercial customers in Delaware, Maryland, Virginia, Pennsylvania, North Carolina, South Carolina, and Florida for natural gas distribution, and around 25,000 residential and commercial customers in Florida for electric distribution.

The Unregulated Energy segment is comprised of propane operations, energy transmission, energy generation, and sustainable investments. Propane operations sell propane to residential, commercial, industrial, wholesale, and AutoGas customers in the Mid-Atlantic region, North Carolina, South Carolina, and Florida. Energy transmission operations transmit natural gas and propane to customers in Ohio. Energy generation operations generate electricity and steam for customers in Florida. Sustainable investments include renewable natural gas projects at various stages of development.

CPK competes with other energy companies in the Mid-Atlantic region, including national and local independent companies. Its propane operations primarily compete on price and service, while natural gas and electric distribution operations compete on price, service, and reliability. The Unregulated Energy Transmission and Supply segment, Aspire Energy, owns approximately 2,800 miles of natural gas pipeline systems in 40 counties in Ohio, with the majority of revenues derived from long-term supply agreements with Columbia Gas of Ohio and Consumers Gas Cooperative.

CPK's Energy Generation segment, Eight Flags, generates electricity and steam at its CHP plant located on Amelia Island, Florida, selling the electricity generated to its Florida electric distribution operation and the steam to the customer who owns the site on which the plant is located, both under separate 20-year contracts. The Marlin Gas Services segment provides mobile CNG and virtual pipeline solutions, primarily to utilities and pipelines.

CPK's Sustainable Investments segment includes renewable natural gas projects. The company acquired the assets and intellectual property of Planet Found during the fourth quarter of 2022, whose farm-scale anaerobic digestion pilot system and technology produce biogas from poultry litter. It is also constructing a dairy manure RNG facility in Madison County, Florida, with capital expenditures totaling $19.3 million through December 31, 2023.

In terms of supplies, transportation, and storage, CPK purchases propane from major oil companies and independent natural gas liquids producers, transporting it by truck and rail to its bulk storage facilities, and delivering it to customers by truck from these facilities. The company's weather-sensitive business is affected by seasonal variations in temperature and weather conditions, with propane revenues typically highest during the winter months when propane is used for heating.

CPK's brand names and/or trade names of its products and services include Chesapeake Utilities, Aspire Energy, Eight Flags, and Marlin Gas Services. Its sustainable investments segment includes renewable natural gas projects, with the assets and intellectual property of Planet Found and a dairy manure RNG facility in Madison County, Florida.