ONE Gas, Inc.'s 2024 Q4: Contradictions in Data Center Timing and Expense Growth

These are the key contradictions discussed in ONE Gas, Inc.'s latest 2024Q4 earnings call, specifically including: Data Center Opportunities and Timing, O&M Expense Expectations, and O&M Growth Expectations:



Financial Performance and Guidance:
- ONE Gas reported full year earnings per diluted share of $3.91, exceeding the revised midpoint of their EPS guidance of $3.90.
- This was driven by fiscal conservatism, strong execution, and favorable interest rate developments.

Customer Growth and Economic Development:
- The company set 23,000 new meters across its service territory in 2024, with growth occurring in major metro areas across Kansas, Oklahoma, and Texas.
- This growth was supported by strong demand for natural gas due to new housing and focused economic development.

Capital Expenditures and System Modernization:
- ONE Gas invested $762 million in capital expenditures and asset removal costs in 2024, up from $729 million in 2023.
- Investments were primarily allocated to system integrity projects and expanding service areas to support customer growth and modernize infrastructure.

Weather Normalization and Earnings Impact:
- Despite weather in the fourth quarter being approximately 24% warmer than normal, it did not materially impact earnings due to effective weather normalization mechanisms in each state.
- This demonstrates the company's ability to manage weather-related risks, which could have otherwise affected financial performance.

Regulatory and Commercial Activity:
- ONE Gas continues to pursue regulatory initiatives to recover system investments and cost increases, with filings made in Texas and Oklahoma.
- The company is also expanding its commercial activity, securing new business and investing in customer growth, supported by a solid pipeline of future meter sets.