Conferencia de resultados de ONE Gas (OGS) del T3 de 2026: eleva sus previsiones de BPA

Puntos clave

• ONE Gas registró un BPA ajustado en el T3 de 2026 de $0,53, lo que representa un aumento del 13% con respecto a los $0,47 del mismo periodo del año anterior, impulsado por nuevas tarifas, el crecimiento de clientes, el proyecto de ley 4384 de la Cámara de Representantes de Texas y una mejora en el desempeño de los gastos operativos.
• La empresa elevó su previsión de BPA ajustado para 2026 a $4,95-$5,01 y su previsión de beneficio neto ajustado a 313-317 millones de dólares.
• Los gastos de operación y mantenimiento del T3 se mantuvieron prácticamente estables interanualmente, a pesar de un aumento del 7% en las solicitudes de localización de líneas, aproximadamente 1,5 millones de dólares adicionales en gastos de combustible de vehículos y mayores costes relacionados con los empleados.
• ONE Gas completó aproximadamente 229 millones de dólares en proyectos de capital durante el trimestre y 587 millones de dólares hasta septiembre. La dirección mantuvo su expectativa de inversión de capital para todo el año en aproximadamente 800 millones de dólares.
• Cuatro proyectos identificados de gran carga representan aproximadamente 22 millones de dólares en ingresos anuales adicionales y 200 millones de dólares en capital asociado. La cartera de proyectos en fase avanzada se ha ampliado a ocho proyectos que representan aproximadamente 3 GW de generación y hasta 1 Bcf diario de demanda potencial.
• El plan de financiación para 2026 está completo, y no se prevén necesidades adicionales de financiación mediante capital ni deuda a largo plazo para el resto del año.

Datos financieros clave

Desempeño comercial y operativo

Las nuevas tarifas y el crecimiento de clientes respaldaron el margen neto del tercer trimestre, mientras que la Ley 4384 de la Cámara de Representantes de Texas redujo el desfase regulatorio sobre el capital elegible puesto en servicio entre revisiones tarifarias. La dirección señaló que la legislación contribuyó menos en el T3 que en trimestres anteriores porque los beneficios varían con el gasto de capital y el ciclo anual GRIP.

La ejecución de costes mejoró sustancialmente con respecto al primer semestre, cuando los gastos de O&M aumentaron un 7,5% interanual. ONE Gas atribuyó el resultado del T3 a la internalización de servicios, una planificación del trabajo más ajustada y una disciplina en la gestión diaria de costes. Las solicitudes de localización aumentaron más del 7%, mientras que los daños por cada 1.000 solicitudes disminuyeron un 5%.

Las presentaciones regulatorias provisionales se han completado en los tres estados de la empresa. El recargo por fiabilidad del sistema de gas de Kansas entró en vigor en octubre y proporciona un aumento de ingresos anuales de 14,3 millones de dólares. La presentación GRIP de Texas entró en vigor en julio con un aumento anual de 36,9 millones de dólares, mientras que las tarifas provisionales de Oklahoma entraron en vigor en junio con un aumento anual de 28,7 millones de dólares.

El desarrollo de grandes cargas sigue siendo un eje central de crecimiento. La conexión del centro de datos de Oklahoma City está completada y se espera que el servicio comience en noviembre. Un proyecto de fabricación avanzada en El Paso también está finalizado y respaldará 100 MW de generación in situ.

Se prevé que la construcción de un proyecto relacionado con GNL en Texas comience en el T4 de 2026 y entre en servicio en el T1 de 2027. Western Farmers, el mayor proyecto en desarrollo, sigue programado para el T3 de 2028 e incluye un gasoducto de 24 pulgadas y 43 millas que abastecerá a una planta de generación a gas en el sur de Oklahoma.

La dirección afirmó que dos de los cuatro proyectos de gran carga identificados deberían entrar en servicio durante el T4 de 2026 y aportar un año completo de ingresos en 2027. Más allá de las ocho oportunidades en fase avanzada, ONE Gas está evaluando otros 20 proyectos en fase inicial que abarcan centros de datos, fabricación avanzada y tradicional, GNC, GNL y generación de energía.

Previsiones de la dirección

ONE Gas prevé ahora un beneficio neto ajustado para 2026 de 313-317 millones de dólares y un BPA ajustado de $4,95-$5,01. La dirección planea ofrecer las previsiones para 2027 y unas perspectivas actualizadas a largo plazo a principios de diciembre.

La empresa prevé un crecimiento moderado de O&M en el T4 y reafirmó su expectativa a largo plazo de un crecimiento anual de O&M del 3%-4%.

La dirección indicó que no se requiere financiación adicional para el resto de 2026. Las necesidades de capital social están cubiertas por los acuerdos de venta a plazo existentes a aproximadamente 82 dólares por acción, y el próximo vencimiento de deuda no se producirá hasta el T2 de 2029.

Para sus próximas perspectivas a largo plazo, ONE Gas tiene la intención de utilizar el punto medio de $4,98 de la previsión actual de BPA ajustado para 2026 como base, en lugar del punto medio inicial de la previsión de $4,89.

Riesgos y aspectos a vigilar

La exposición a los tipos de interés sigue concentrada en pagarés de empresa. Con los saldos medios previstos de pagarés de empresa, la dirección estimó que una hipotética variación de 100 puntos básicos durante todo el año en la tasa de fondos federales afectaría al BPA ajustado anual en aproximadamente $0,09.

Los costes de combustible para vehículos añadieron casi 1,5 millones de dólares a los gastos del T3, mientras que los gastos relacionados con los empleados también aumentaron. La dirección caracterizó los tipos de interés y los precios del combustible como factores adversos cíclicos.

Las condiciones meteorológicas siguieron siendo un factor adverso para los resultados de 2026, a pesar de los beneficios derivados de la liberación de capacidad. La empresa afirmó que sus mecanismos de normalización meteorológica funcionaron según lo previsto, pero la combinación de un invierno suave y un repunte significativo por una tormenta invernal hizo que el año fuera inusual.

La dirección también señaló que ya se esperaba que el crecimiento de los beneficios en 2027 se situara por debajo de su tendencia a más largo plazo, debido a que Oklahoma pasará de su proceso tarifario basado en el rendimiento a un caso de revisión general de tarifas, que requiere más tiempo.

Los requerimientos de capital para proyectos de gran carga siguen siendo inciertos. Las estructuras de financiación varían según el proyecto y pueden ir desde acuerdos financiados por el cliente hasta la financiación total por parte de la empresa. ONE Gas señaló que proporcionará detalles sobre ingresos y capital una vez que avancen las negociaciones comerciales, e incorporará los proyectos previstos en su plan quinquenal actualizado.

Puntos destacados del turno de preguntas y respuestas de analistas

• Factores determinantes de los beneficios para 2027: La dirección identificó los cambios legislativos en Texas y Kansas, la menor demora regulatoria, los beneficios de la internalización de servicios y las oportunidades de gran carga como factores estructurales positivos. Se prevé que estos compensen la presión cíclica derivada de los tipos de interés y los costes de combustible, aunque la previsión detallada para 2027 se pospuso hasta diciembre.
• Calendario de proyectos de gran carga: Se prevé que dos de los proyectos anunciados entren en servicio en el T4 de 2026, mientras que la oportunidad de GNL en Texas está prevista para el T1 de 2027. Se espera que los proyectos más grandes a escala de empresa de servicios públicos contribuyan a lo largo de un periodo más prolongado que se extenderá entre 2028 y 2030.
• Viabilidad económica de los proyectos: ONE Gas está priorizando los proyectos que puedan utilizar la infraestructura existente, cumplir con las condiciones para las tarifas máximas y distribuir los costes fijos del sistema entre un mayor uso. Cada proyecto sigue sujeto a la revisión de prudencia regulatoria en el estado correspondiente.
• Caso tarifario de Oklahoma: La dirección prevé que la solicitud de 2027 aborde los mayores costes de deuda y capital social, así como las disposiciones que afectan al atractivo de la asignación discrecional de capital. La empresa afirmó sentirse cómoda con el entorno regulatorio a pesar del cambio pendiente en la comisión.
• Cobertura de tipos de interés: ONE Gas evaluó permutas de tipos de interés (swaps) para la exposición a la deuda a corto plazo, pero las consideró poco atractivas bajo el marco actual y no ejecutó ninguna cobertura.
• Necesidades futuras de capital social: La dirección no realizó cambios en su marco anterior de necesidades de capital social para el periodo de planificación 2027-2030, señalando que el superior desempeño del negocio y las necesidades de efectivo de los nuevos proyectos de crecimiento se compensarán parcialmente entre sí.

Transcripción completa de la llamada de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

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. Bickers.

Unknown Executive

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 and 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; Chris Sighinolfi, Senior Vice President and Chief Financial Officer; and Curtis Dinan, President and Chief Operating Officer. And now I'll turn the call over to Sid.

Robert McAnnally

Thanks, Erik. 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 are 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

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 1 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 in-sourcing 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 9 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 and 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 3 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 Build 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

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. .

In-sourcing 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 support system integrity, safety and reliability, an increasing percentage supports growth projects, allowing us to respond to increasing customer demands. We view customer growth as 1 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 customers' needs. The project adds meaningful volume in 1 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 4 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 6 late-stage opportunities on prior calls and new opportunities have been added to the list. Today, we have 8 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 costs 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.

Robert McAnnally

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 are now ready for questions.

Operator

[Operator Instructions] Our first question will come from the line of Constantine Lenet with Wells Fargo.

Preguntas y respuestas

Constantine Lednev

Congrats on a great quarter. Maybe just starting off on the upcoming Oklahoma rate case. Do you anticipate any unusual requests kind of 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

Constantine, it's Chris. Our PBR mechanism, unlike the capital recovery mechanisms in the other states, does keep us fairly current with operating cost expenses. 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. Cost of capital, obviously, has moved up pretty significantly on the credit side and on the equity side. And then there are 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.

Constantine Lednev

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

Not from our vantage point. We have 2 commissioners that will remain on the commission. Obviously, today, we'll settle through 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.

Constantine Lednev

And just 1 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

This is Curtis, Constantine. 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 4 projects I mentioned 2 of those Western Farmers, much longer lead time. It's a much larger project more capital intensive versus the project that 3 months ago on this call wasn't even on our radar at that point.

So that 1 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 department with different economic development arm. So they have a good sense of what's happening in our 3 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.

Robert McAnnally

And Constantine, I'll take the second half of that question. To Curtis' 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 derisks 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.

Operator

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

Julien Dumoulin-Smith

Thank you very much for the opportunity here. I appreciate it. You guys hear me okay?

Robert McAnnally

We can.

Julien Dumoulin-Smith

Excellent. So look, without getting ahead of 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 term of art.

Christopher Sighinolfi

Julien, this is Chris. It's a great question. I would characterize it this way, that there are -- they 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 $0.35 adjusted EPS impact from that. Today, I'd see it more along the lines of $0.45 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 a 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 in-sourcing and the bending of the cost curve on O&M, but at the same time yielding operational benefits that I see a 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 have written about, others have written about the fact that 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. Weather was still a headwind on 2026 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 PVR and a more lengthy process associated with prosecuting a full general rate case.

Robert McAnnally

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 is -- 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 in-sourcing that we've been talking about for years, as Curtis has 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 the -- 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 the 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 approximate to our system, are there longer term, and we are 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 3 years to prepare for these opportunities.

Julien Dumoulin-Smith

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 uplift, if you will.

Curtis Dinan

Julien, 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, 2 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 8 late stage, I would expect over the next 1 to 2 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 3 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, 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

Got it. And just a quick one, more thematic or to the moment. The strong El Nino has got folks across the natural gas market, very much focused on the prospects of 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 the -- again, the latitude, whether it's cost flexibility or capacity release or otherwise to adapt to another warm winter and stay on schedule. 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?

Robert McAnnally

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 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 Winterstorm ore 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 it's 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.

Operator

Our next question will come from the line of Dylan Libner with Mizuho.

Unknown Analyst

I just wanted to kind of touch more on this new Texas LNG project that you mentioned, kind of get like size and the scope of it. And if you're seeing any more projects that are in the 8 late stage or the 20 early-stage opportunities that you mentioned.

Curtis Dinan

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 that 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.

Unknown Analyst

Understood. And then the capital that was going into that project a part included in the $100 million for 2026.

Curtis Dinan

That project is being funded by us, yes. .

Unknown Analyst

Congrats to quarter again.

Operator

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

Paul Fremont

Congratulations on a good quarter. I guess my first question -- have you guys considered using interest rate swaps to hedge some of the exposure on your short-term debt?

Christopher Sighinolfi

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

Got it. And then second question on the 8 projects that are in late stage. Can you give us any quantification of the capital spending that opportunity that goes with those 8 projects?

Curtis Dinan

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 product 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 we -- every project also goes through a prudency review. So we have to meet our prudency requirements in each of our 3 states, which serves to protect our existing customer base. So each 1 of those will vary a little bit. And like I did on the 4 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 of this number of projects because it can be the project like the LNG project I described that is very close to our system, we'll take minimal time to connect or a longer-term full or much larger development like the Western Farmers project. It takes a number of years to execute. It's across that whole spectrum that we see in that next 8 projects that I mentioned.

Robert McAnnally

And Paul, 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 performed very well from an affordability perspective.

Paul Fremont

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 $100 million plus? Or 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 $50 million, $100 million, 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.

Curtis Dinan

Yes. 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 I 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 5-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 5-year plan. .

Operator

Our next question will come from the line of David Paz with Wolfe Research.

David Paz

Thank you for the helpful color on the '27 drivers, Chris. I 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

David, it's Chris. Yes. 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 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 Paz

Great. And I know you subsequently rebased off '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 keep around that $6 or even better?

Christopher Sighinolfi

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? 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 economists forecast at Wolfram. And I don't know what your process is versus another analyst, it has been our practice to use -- to be -- 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 Paz

Fair enough. That's why I did say the current interest rate curve, but fair enough. So maybe 1 last question. Just within the '27, '30 planning period, as you stand today, 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 to $30 million the same amount of total equity needs that you identified earlier this year? .

Christopher Sighinolfi

Yes. We've made no change in that comment. You have 2 things sort of counteracting. One is outperformance of the business, and 2 is the opportunities Curtis is talking about that will be consumptions of cash. And so how those 2 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.

Operator

Our next question will come from the line of David Rold with Bank of America.

Unknown Analyst

Within large load, the CNG and the LNG opportunities. Just wondering if you could compare and contrast those versus the traditional data center, large load, that bring with it any kind of additional time line risk differences in economics, new challenges, how much existing infrastructure versus new is needed? Any color there would be helpful.

Curtis Dinan

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 it 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 1 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.

Operator

That concludes the question-and-answer session. I'd now like to hand it back to the ONE Gas team for closing remarks.

Robert McAnnally

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.