Conferencia de resultados del 3T 2026 de NWN: la previsión de BPA se eleva a $3.10-$3.20

Northwest Natural Holding Company (NWN) elevó sus previsiones de beneficios para 2026 tras registrar un sólido desempeño en lo que va de año, resoluciones regulatorias constructivas y menores costes operativos y de mantenimiento. Los resultados del tercer trimestre también reflejaron mayores márgenes en todas sus líneas de negocio, contrarrestados en parte por el aumento de los costes de amortización y financiación.

Aspectos clave

• NWN elevó sus previsiones de BPA para 2026 a $3,10-$3,20, citando el desempeño en lo que va de año, las resoluciones regulatorias y una disciplinada gestión de costes.
• Las pérdidas por acción del tercer trimestre de 2026 se redujeron a $0,71 frente a los $0,73 del año anterior. Los beneficios de las empresas de distribución de gas son estacionales, y la mayor parte de los ingresos y beneficios se generan durante los meses de invierno por el uso de la calefacción.
• El BPA de los primeros nueve meses aumentó un 6,6%, hasta $1,62, en comparación con el BPA ajustado de $1,52 del mismo periodo de 2025.
• El beneficio neto de SiEnergy en los primeros nueve meses aumentó en 4,4 millones de dólares, o $0,10 por acción, respaldado por el crecimiento de clientes y la contribución de todo el periodo tras la adquisición de Pines.
• NWN reiteró su plan de gastos de capital de 500-550 millones de dólares. El gasto de capital acumulado en lo que va de año aumentó un 12% respecto a 2025.
• El dividendo anual previsto aumentó en $0,03, hasta $2,00 por acción, lo que representa el mayor incremento de la empresa desde 2012 y su 71.º año consecutivo de crecimiento del dividendo.

Datos financieros clave

Evolución operativa y del negocio

SiEnergy

El crecimiento de clientes de SiEnergy fue de aproximadamente el 13% en los 12 meses finalizados el 30 de septiembre de 2026. La dirección señaló que los mayores tipos hipotecarios han moderado la actividad inmobiliaria en Texas, pero el crecimiento de clientes se mantiene en los dos dígitos.

La cartera de desarrollo alcanzó casi 265.000 parcelas al cierre del trimestre. Desde la adquisición de SiEnergy hace menos de dos años, NWN ha sumado aproximadamente 110.000 parcelas a dicha cartera.

En septiembre, SiEnergy resolvió su primer proceso tarifario bajo la propiedad de NWN. El acuerdo contempla un aumento del requisito de ingresos de 8,6 millones de dólares, una rentabilidad sobre recursos propios autorizada del 9,8% y una ratio de capital propio de casi el 60%. Se esperaba que las nuevas tarifas entraran en vigor en noviembre, sujetas a la aprobación de la comisión.

El acuerdo también fijó los factores necesarios para el Programa de Infraestructura de Confiabilidad del Gas (GRIP, por sus siglas en inglés). La dirección prevé la primera solicitud del GRIP de SiEnergy en 2027, asumiendo la recepción de una orden definitiva.

Northwest Natural Gas

Las nuevas tarifas de Washington entraron en vigor el 1 de agosto en virtud de un acuerdo aprobado para un plan tarifario plurianual. En Oregón, la orden del Mecanismo Alternativo de Tarifas autorizó un aumento del requisito de ingresos de 13 millones de dólares, frente a la solicitud inicial de 15,6 millones de dólares. Dichas tarifas entraron en vigor el 31 de octubre.

La dirección afirmó que la compañía está preparada para la temporada de calefacción, incluyendo la incorporación de dos compresores en las instalaciones de almacenamiento de Mist para reforzar la fiabilidad durante los picos de invierno.

Conforme al calendario regulatorio actual de Oregón, NWN prevé presentar su primer proceso de tarifas plurianuales en 2028, y que las nuevas tarifas entren en vigor en 2029. La compañía está evaluando diversas opciones, entre ellas un proceso tarifario general, para cubrir el periodo previo al inicio del marco plurianual.

Northwest Natural Water

El crecimiento de clientes de servicios de agua se situó ligeramente por encima del 2% en los 12 meses finalizados el 30 de septiembre. La dirección mantuvo su objetivo de crecimiento de clientes a largo plazo del 2%-3%, al tiempo que reconoció cierta moderación en la actividad inmobiliaria.

Foothills, la mayor empresa de servicios de agua de la compañía, sigue avanzando en su procedimiento tarifario en Arizona, que incluye una solicitud de tarifas por fórmula. Otros cuatro procesos de tarifas de agua están en marcha y se prevé que concluyan a principios de 2027.

NWN también inició la construcción de su primera comunidad en Texas, donde SiEnergy y Northwest Natural Water prestarán conjuntamente servicios de gas natural, agua y tratamiento de aguas residuales. La dirección señaló que Texas sigue siendo el mercado principal para este modelo de servicios combinados debido a la coincidencia territorial entre sus operaciones de gas y de agua.

Ampliación del almacenamiento de gas MX3

MX3 es un proyecto de 300 millones de dólares regulado por la FERC y diseñado para añadir entre 4 y 5 Bcf de capacidad regional de almacenamiento de gas. Está totalmente contratado mediante acuerdos a 25 años tras la orden de proceder, con una rentabilidad sobre recursos propios del 12,5% y una proporción de fondos propios del 50%.

La dirección sigue teniendo como objetivo recibir la orden de proceder para finales de 2027. La apelación del permiso de uso condicional del proyecto continúa su curso ante la Junta de Apelaciones de Uso del Suelo (Land Use Board of Appeals), pero la empresa señaló que dicha apelación ya está contemplada en su cronograma.

Previsiones de la dirección

NWN elevó su rango de previsión de BPA para 2026 a $3,10-$3,20. La dirección atribuyó el incremento a una ejecución en lo que va de año mejor de lo previsto, resoluciones regulatorias constructivas y un desempeño favorable de O&M.

La compañía reiteró su objetivo de crecimiento del BPA a largo plazo del 4%-6% sin MX3 y del 5%-7% con MX3. Tiene previsto presentar sus previsiones para 2027 y una perspectiva de capital actualizada con los resultados del cuarto trimestre en febrero. La dirección afirmó que no hubo cambios en el plan de capital a largo plazo hasta 2030.

Las previsiones asumen un crecimiento continuado de clientes, condiciones meteorológicas medias y la ausencia de cambios significativos en las políticas regulatorias, en las resoluciones regulatorias previstas, en la legislación o en la normativa.

NWN prevé una emisión total de acciones en 2026 de 40-50 millones de dólares, incluidos los 26 millones de dólares ya emitidos. La dirección afirmó que su programa 'at-the-market' debería ser suficiente para satisfacer las necesidades previstas de capital propio. La compañía ha completado la financiación de deuda planeada para 2026 y continúa fijando como objetivo una exposición a deuda a tipo variable no superior al 10%.

Riesgos y aspectos a vigilar

• Los mayores tipos hipotecarios han moderado la actividad inmobiliaria en Texas y en algunos mercados de servicios de agua. El crecimiento de clientes del 13% de SiEnergy se situó por debajo de la previsión inicial de la dirección del 15%-20% para el año.
• El aumento de los costes de amortización y financiación compensó en parte la mejora de los márgenes y el desempeño de O&M en el tercer trimestre.
• Northwest Natural Water está absorbiendo mayores costes de O&M derivados de la centralización operativa y una mayor amortización procedente de proyectos de infraestructura.
• No se espera que el marco tarifario plurianual de Oregón entre en vigor hasta 2029, lo que crea un posible desfase en la recuperación de inversiones que la dirección podría abordar mediante un proceso tarifario general.
• MX3 sigue sujeto a la obtención de permisos y a un proceso de apelación en curso, aunque la dirección mantuvo su objetivo de recibir la orden de proceder para finales de 2027.
• La generación eléctrica a partir de gas afronta restricciones en Oregón, aunque la dirección confía en que las necesidades energéticas regionales sigan respaldando la demanda a largo plazo de almacenamiento de gas.

Puntos destacados de la sesión de preguntas y respuestas con analistas

La dirección afirmó que las recientes declaraciones regulatorias en Oregón no modificaron su evaluación sobre la necesidad de presentar una solicitud provisional antes de que comience el marco tarifario plurianual. Todas las opciones siguen abiertas, incluido un proceso tarifario general.

Respecto al sector inmobiliario de Texas, la dirección calificó el crecimiento de SiEnergy de aún sólido a pesar de la moderación derivada de los mayores tipos de interés. Señaló que es probable que el pico de crecimiento del mercado de hace dos o tres años haya quedado atrás, a menos que el entorno de tipos de interés cambie de forma significativa.

La compañía confirmó que el proceso de apelación de MX3 sigue según el calendario previsto y no altera su expectativa de recibir la orden de proceder para finales de 2027.

En cuanto a los dividendos, la dirección señaló que los fundamentos de su política se mantienen sin cambios, incluido el objetivo de ratio de 'payout' del 55%-65%. Las posibles actualizaciones en febrero podrían incluir el calendario del incremento anual del dividendo.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Hello, everyone. Thank you for joining us, and welcome to the Northwest Natural Holding Company Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Nikki Sparley, Director of Investor Relations. Please go ahead.

Nikki Sparley

Thank you. Good morning, and welcome to our third quarter 2026 earnings call. In addition to the press release, a supplemental presentation is available on our Investor Relations website at ir.nwnaturalholdings.com. And following this call, a recording will also be available on our website.

As a reminder, some things that will be said this morning contain forward-looking statements. They are based on management's assumptions, which may or may not occur. For a complete list of cautionary statements, refer to the language in our press release.

Additionally, our risk factors are provided in our 10-Q and 10-K filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see our press release and the slides that accompany today's call, which are available on the Investor Relations page of our website.

Please note, our guidance assumes continued customer growth, average weather conditions and no significant changes in prevailing regulatory policies, mechanisms or assumed outcomes or significant changes in local, state or federal laws, legislation or regulations. We expect to file our 10-Q later today.

With us today are Justin Palfreyman, President and Chief Executive Officer; and Ray Kaszuba, Senior Vice President and Chief Financial Officer. Justin will provide highlights from the quarter, a regulatory update and a look forward. Ray will walk through our financial results and guidance. After Justin and Ray's prepared remarks, we will host a question-and-answer session. With that, I will turn the call over to Justin.

Justin Palfreyman

Thanks, Nikki. Good morning, and welcome, everyone. I'm pleased to report another quarter of strong financial results. Earnings per share for both the quarter and year-to-date exceeded our expectations, driven by disciplined cost management, solid operational execution and continued customer growth. Given the strength of our business through the first 9 months and our visibility into the remainder of 2026, we are raising our annual earnings guidance. With the heating season still ahead, we are confident in our position today and the momentum we are building into 2027.

Importantly, we achieved these results while prioritizing customer affordability. At a time when inflation and energy costs are top of mind, our objective is to invest prudently in growth, reliability and the safety of our systems while carefully managing costs on behalf of our customers. That mindset is embedded across our organization. A central tenet of our long-term strategy is collaborating with regulators to align customer needs with utility investment requirements. Across our service territories, we continue to find that timely recovery of investments is important for both customers and utilities. We have long been proponents of multiyear ratemaking and its benefits. Customers benefit from more gradual and predictable rate adjustments and utilities gain greater visibility and certainty to invest in critical infrastructure.

With this in mind, let me provide an update on our regulatory dockets. Starting in Texas, we settled our SiEnergy rate case in September, the first under our ownership. The settlement provides an $8.6 million revenue requirement increase, a 9.8% authorized ROE and a nearly 60% equity ratio. We also received the factors necessary to file for the Gas Reliability Infrastructure Program, or GRIP, which provides accelerated recovery of CapEx between rate cases. We expect new rates to take effect in November, subject to commission approval.

Even after the rate changes, we still expect SiEnergy's customer bills to remain competitive with other Texas gas utilities. SiEnergy is laying the foundation for future investment recovery through both GRIP and the established benefits provided under HB 4384. Together, these mechanisms help reduce regulatory lag, support ongoing infrastructure investment and contribute to more gradual customer bill impacts over time.

Turning to Northwest Natural Water. Foothills, our largest water utility, continues to make progress on its Arizona rate proceeding, including its request for formula rates. We believe formula rate structures can provide a more efficient path for recovering investments while maintaining transparency and regulatory oversight. We have 4 additional water rate cases underway, which we expect to conclude in early 2027. We also continue to advance our rate consolidation strategy across our water utilities. We've made progress in Idaho and Washington and are pursuing further consolidation in Oregon, Arizona and Texas with the goal of simplifying regulatory administration and reducing costs for stakeholders.

Turning to Northwest Natural's regulatory updates. As we mentioned last quarter, new rates in Washington became effective August 1, following approval of our multiyear rate plan settlement. In October, we received the final order for our Alternative Rate Mechanism, or ARM, in Oregon and are pleased with the outcome. The order provides for a $13 million increase in revenue requirement compared to the original ask of $15.6 million. New rates were effective on October 31.

We also received approval for our annual Purchase Gas Adjustments, or PGAs, in both Oregon and Washington. Even after taking into account the ARM in Oregon, the recent Washington rate case and gas costs from the PGA, the average Northwest Natural residential customer continues to pay about the same today for their natural gas service as they did 20 years ago. Over that same period, comparable electricity rates have more than doubled in our region.

Entering the heating season, our gas supply and system readiness position us well to meet customer demand. This includes the addition of 2 new compressors at our Mist storage facility, helping to support reliability during peak winter conditions. In Oregon, we continue to engage constructively with stakeholders as the state advances the framework for multiyear ratemaking. Phase 2 is now underway with conversations occurring across several work streams. While these discussions progress, our priority remains the same, finding solutions that support customer affordability while ensuring utilities can continue to make the investments necessary to maintain safe and reliable service.

Under the Oregon Commission's current schedule, we expect to file our first multiyear rate case in 2028 with new rates effective in 2029. Before our first multiyear rates go into effect, we are closely examining additional options such as a general rate case to ensure timely recovery of our investments and costs. By 2029, once multiyear rates are in place in Oregon, we expect over 95% of our overall rate base to have some form of forward-looking rate plan or mechanism. These mechanisms support more timely recovery of investments help to smooth out customer rate impacts and provide longer-term visibility into our financial results.

With that, let me spend a few minutes on our major growth initiatives, starting with SiEnergy. Customer growth remains strong, up approximately 13% for the 12 months ended September 30, 2026. Elevated mortgage rates have begun to moderate housing activity from peak levels in Texas. While SiEnergy is not immune to these trends, we are still bullish on the Texas housing market long term and are still seeing healthy double-digit customer growth and a robust development pipeline. Underscoring our confidence in the future, our backlog continues to grow and sits at nearly 265,000 lots as of quarter end.

Since acquiring SiEnergy less than 2 years ago, we have added approximately 110,000 new lots to the backlog, which is quite a testament to the strength of SiEnergy's reputation and development team. SiEnergy continues to be one of the fastest-growing gas LDCs in the country and the combination of continued customer growth, a constructive regulatory framework and recovery mechanisms in Texas support our confidence in SiEnergy's long-term EPS growth.

For our water utilities, we are making great progress on centralizing and consolidating the business. Our objective is to build a platform designed to scale efficiently over time. Customer growth at Northwest Natural Water was just over 2% for the 12 months ended September 30. Similar to SiEnergy, we are seeing a modest slowdown in housing activity in some of our markets due to higher mortgage rates.

Over the coming years, we are still confident in our long-term 2% to 3% customer growth target. Our teams are making significant progress on capital projects at our Foothills utilities, including tank projects that support anticipated customer growth and reliability of our water storage and distribution systems. Longer term, greenfield development remains an important incremental growth driver for our water utilities. I'm excited to highlight that we recently began construction on the first community in Texas, where we are serving gas, water and wastewater through both SiEnergy and Northwest Natural Water. The ability to offer multiple utility services through a single company is a differentiated value proposition for developers, and we see opportunities to expand this model in the years ahead.

Finally, moving to MX3. As a reminder, MX3 is a $300 million FERC-regulated gas storage expansion project that will add 4 to 5 Bcf of capacity in our region. The project is fully contracted with 25-year agreements upon notice to proceed, a 12.5% ROE and a 50% equity layer. We continue to work through the permitting process and remain on track to receive notice to proceed by the end of 2027.

As discussed last quarter, we received unanimous approval of our conditional use permit from the Columbia County Board of Commissioners. As expected, an appeal was filed with the Land Use Board of Appeals, or LUBA. That process is underway, and our time line for notice to proceed remains unchanged. MX3 represents an important opportunity to enhance energy reliability across the Pacific Northwest and upon receiving notice to proceed, would support increasing our long-term earnings growth target to 5% to 7%.

In summary, the strategic work we have done over the past few years is starting to produce tangible results. We serve growing service territories, are advancing key regulatory initiatives and investing in critical infrastructure, all while controlling costs and maintaining financial strength. Given our year-to-date results and expectations for the balance of the year, we are raising our 2026 earnings guidance and remain confident in our long-term growth.

Additionally, we recently announced our largest dividend increase since 2012, which reflects that same confidence. The dividend remains an important component of our shareholder value proposition, and the increase highlights both the strength of our underlying business and our expectation that we will continue to drive sustainable earnings and dividend growth over time. That confidence is grounded in our well-established track record. For more than 167 years, Northwest Natural has successfully navigated a variety of economic environments, including periods of elevated inflation and higher interest rates. Throughout our history, we have consistently adapted to those conditions and delivered value to shareholders while staying committed to affordability and serving customers safely.

With that, I'll turn it over to Ray for a more detailed financial update.

Raymond Kaszuba

Thank you, and good morning, everyone. As Justin mentioned, we are raising our EPS guidance range to $3.10 to $3.20, driven by our better-than-expected year-to-date performance, constructive regulatory outcomes and the strong execution we're seeing across the company. A meaningful contributor has been our continued focus on cost management. We're seeing favorable O&M performance across several parts of the organization, reflecting both productivity improvements and disciplined spending decisions. We are also reaffirming our capital expenditure plan of $500 million to $550 million. Year-to-date CapEx is up 12% over last year as we continue to invest in growth and reliability across our utility systems.

Turning to a more detailed review of our financial results. As a reminder, our gas utility earnings are seasonal with the majority of revenues and earnings generated in the first and fourth quarters during the winter heating months. For the third quarter of 2026, we reported a loss of $0.71 per share compared to a loss of $0.73 per share for the same period in 2025. Results were modestly improved year-over-year due to higher margin across all businesses and O&M expense management that was partially offset by higher depreciation and financing costs. For the first 9 months, we reported earnings per share of $1.62 in 2026, up 6.6% compared to adjusted EPS of $1.52 for the same period in 2025.

The year-to-date increase in earnings per share reflected a higher contribution from SiEnergy as well as new rates across our gas utilities in Oregon and Washington. These items were partially offset by higher O&M expenses at Northwest Natural Water. At Northwest Natural Gas, year-to-date net income was up $1.6 million, but EPS was down roughly $0.02. Results were driven by new rates and continued cost discipline. At SiEnergy, year-to-date net income was up $4.4 million or $0.10 per share, reflecting customer growth and a full period of contribution from the Pines acquisition.

At Northwest Natural Water, year-to-date net income was down $1.7 million or $0.04 per share, reflecting higher O&M from continued operational centralization and higher depreciation from several key infrastructure projects. Finally, our other segment's year-to-date net loss improved by $8.5 million, driven by lower O&M, partially offset by higher financing costs. Overall, we are pleased with our operational execution and believe the guidance increase appropriately reflects the strength of our year-to-date performance while maintaining a prudent outlook as we start the 2026 to 2027 heating season.

Turning now to shareholder returns. Last month, we announced an increase in our indicated annual dividend of $0.03, bringing it to $2 per share. This marks our largest dividend increase since 2012 and extends our track record to 71 consecutive years of dividend growth. I am very pleased with the significant progress we've made over the past 2 years to bring the payout ratio down to our long-term target range of 55% to 65%. Our dividend increase reflects the strength and stability of our underlying business. We continue to have strong organic growth opportunities across our regulated businesses and remain committed to investing in essential utility infrastructure and driving sustainable earnings growth while maintaining a solid balance sheet and returning capital to shareholders.

As we have said previously, we expect dividend growth to be higher than it has been historically and supported by continued earnings growth. Beginning in 2027, we will announce updates to our dividend approach in connection with our annual guidance updates on our fourth quarter earnings call in February.

Before turning to questions, I wanted to briefly discuss how we are thinking about financing in the current environment. Given the recent interest rate volatility and broader inflation, we remain focused on a financing strategy that preserves flexibility and supports long-term value creation. On the debt side, we've intentionally maintained a diversified maturity profile and avoided concentrations of refinancing risk. Approximately 75% of our debt is at our regulated businesses, where financing costs are generally recovered through rates. Northwest Natural Gas, which represents the largest portion of our financing needs, benefits from a predictable capital program that generally requires only modest debt financing each year. That allows us to remain flexible and opportunistic as we access capital markets.

Across the company, we have maintained very limited exposure to floating rate debt. Our target remains 10% or less, which helps reduce earnings volatility and provides greater predictability for customers and shareholders. For 2026, we have completed debt financings for the year. On the equity side, we believe the ATM provides sufficient flexibilities to support our anticipated equity needs. We continue to expect to need $40 million to $50 million in total for the whole year, and we've already issued $26 million. While equity needs may vary from year-to-year depending on our CapEx profile, we believe our current plan can be supported by our ATM.

Stepping back, I want to emphasize the flexibility of our financing plan. We have multiple levers to execute our capital program and navigate changing market conditions. Combined with our regulatory strategy and disciplined approach to capital allocation, we believe we are well positioned to continue delivering value for both customers and shareholders across a wide range of economic environments. With that, we'll open up the call for questions.

Operator

[Operator Instructions] Your first question comes from Constantine Lednev with Wells Fargo.

Preguntas y respuestas

Constantine Lednev

Congrats on a great quarter.

Justin Palfreyman

Thanks, Constantine.

Constantine Lednev

Maybe just starting off on the Oregon multiyear plan process. The draft has been absorbing some pretty meaningful lag. Does the draft change your view around interim support filing? I guess what's embedded in your current plan? And what are the options for a smoother kind of path into a multiyear framework in '28?

Justin Palfreyman

Yes. I appreciate the question. We are evaluating options for bridging the period between 2026 and when we will file our first multiyear rate case in 2028. We have all options available to us, including a general rate case. So we are actively evaluating that.

Constantine Lednev

And does some of the recent testimony kind of change any of your views around the need for some of these interim filings just in terms of timing or maybe accelerating some of that?

Justin Palfreyman

No, I don't think so, Constantine.

Constantine Lednev

Okay. And just with the -- I guess, with the Oregon election behind us, some of the policy shifts in Oregon enable any further gas generation to back up renewables or coal retirements? Or does the data center uncertainty kind of complicate some of these incremental gas demand needs just as we think in the context of MX3 and any further kind of Mist expansions?

Justin Palfreyman

Yes. It's a great question. The gas-fired generation is difficult in Oregon. We would expect that you would see more of that happening in surrounding states just because of some of the restrictions in the state of Oregon. All of that, though, and the dynamics that you are referring to bode well for future gas storage expansion because there is a very significant need, especially on peak during the winter for additional energy resources, whether that's generation on the electric side or even on the gas grid itself. And so we still see strong long-term demand beyond even MX3 for gas storage in our region.

Constantine Lednev

Okay. Got it. And then just maybe a quick regulatory follow-up on the SiEnergy of settlement. Just in terms of what's embedded in the current plan and just going forward, assuming approval, what would you look for in terms of timing the GRIP filings going forward on a more cyclical basis?

Justin Palfreyman

Yes. Having the factors in place now for GRIP and assuming we get the final order here in the next few weeks, we would expect that our first GRIP filing would be in 2027. So -- and similar to other utilities who've leveraged this mechanism, we have up to 5 years of leveraging GRIP before a general rate case will be required again.

Operator

Your next question comes from Richard Sunderland with Truist Securities.

Richard Sunderland

Great. I wanted to follow up on that last question around kind of the SiEnergy outlook. You spoke a little bit to the housing starts angle. And I guess maybe this is even more broadly touching water as well. Could you just parse a little bit more around what you're seeing on the ground on the housing front, how that compares to plan and kind of outlook assumptions? And I guess, ultimately, do you expect the earnings impact from this over the next year or 2 versus what you budgeted for? Just trying to contextualize all this.

Justin Palfreyman

Yes. I appreciate that. What we're seeing on the ground in Texas is still very strong growth. So if I think about what we thought at the beginning of the year, sort of 15% to 20% customer growth year-over-year. If you look at the last 12 months, we're tracking just below that, around 13%. That's still a significant amount of new meters being set in our markets in Texas for SiEnergy. So we're seeing a moderation because of interest rates and other macro factors, which would be, I think, very, very intuitive and logical, but we are still seeing very strong growth. And I think that's evident in terms of how that translates into earnings. I think that's evident with the results you've seen here in Q3. And we continue to be bullish on our outlook in terms of housing growth in Texas, but I think that the peak from maybe 2 or 3 years ago is probably behind us unless we see some meaningful change in the interest rate environment.

Richard Sunderland

Understood. That's helpful to run through. And then turning to MX3, I know you briefly touched on the LUBA appeal process. Has there been any movement on that since last quarter? Just any kind of state of the state, so to speak, on MX3 that we may not be appreciating? And I guess, separate but related, what do you have in focus on MX3 on kind of the next 3- to 6-month basis as you progress towards NTP in '27?

Justin Palfreyman

Yes. We just continue to work through that appeal process, which works on its -- the court appointed time line. We had a recent hearing on that. And so we'll expect to hear more over the coming months. And none of this really changes our expectation on when we expect notice to proceed, which continues to be by the end of next year. That time line contemplates this appeal process and has always contemplated that.

Operator

Your next question comes from Dylan Lipner with Mizuho.

Dylan Lipner

Congrats on a good quarter. Just kind of want to get on the guidance range update here. So with this $3.10 to $3.20 at the midpoint, it's about 7.5% above 2025 adjusted EPS versus the 4% to 6% long-term target. How much of the raise is timing or onetime or a higher base? And how should we think about 2027 growth maybe going off the $3.15 midpoint?

Justin Palfreyman

Appreciate the question. I'm going to hand that over to Ray to answer.

Raymond Kaszuba

Dylan, thanks for the question. So I think you noticed in our release and on the call today that we also reaffirmed our long-term growth rate without MX3 of 4% to 6% and with MX3 of 5% to 7%. We typically provide guidance for the prompt year in February. So you'll hear more about 2027 then from us. But I think reaffirming that long-term growth rate from the higher guidance that we gave today gives you some direction in terms of how we're thinking about things long term.

Dylan Lipner

Got you. And we'll have a capital read through the long-term plan in 2027.

Raymond Kaszuba

Sorry, can you repeat the question?

Dylan Lipner

We'll have a full capital update in 2027 as well.

Raymond Kaszuba

Yes. We'll provide that in February.

Justin Palfreyman

And I think you also saw there's no change to our long-term capital plan through 2030 either.

Operator

Your next question comes from Alex Kania with U.S. Bancorp BTIG.

Alexis Kania

Justin, I think you talked a little bit about this opportunity in the prepared remarks, just about, I guess, lack of a better term, the kind of combined platform of water and gas services maybe in Texas. I was just wondering where else you see those opportunities over time as you kind of hinted that on the prepared remarks.

Justin Palfreyman

Yes. Thanks for the question, Alex. What we did after we acquired SiEnergy is we consolidated business development efforts around gas and water in Texas because we saw very strong relationships with the developers and homebuilders there that the SiEnergy team had and had a long-standing relationship there in those communities, and there was overlap with our water utilities, particularly in the broader Houston market. So over the course of 2026, we've been very focused on trying to leverage that and really make sure new communities that are getting built understand that we can deliver both water, wastewater and natural gas service to those communities.

And we're starting to see some signs of success there, and that's why I highlighted that in my prepared remarks. It's super exciting to think about new communities going in where we're providing all 3 of those services. We will continue to focus on that in Texas. There may be opportunities for us to look at that in other states, but our gas and water overlap is not quite the same as it is in Texas and the growth opportunity in some of our other markets isn't quite the same as what it is in Texas, which is why you're hearing the focus there.

Alexis Kania

Great. That makes sense. And maybe a question for Ray. Just thinking about the discussion you were mentioning about the dividend, and I guess we'll get a little bit more clarity on this in the next year-end earnings call. But just again, thinking about where are the areas where you feel like you could update some of that dividend policy? Is this just kind of a refresh of what you're looking at on ongoing cash flow? Is it a potential change or thoughts on where the payout ratio needs to be in context of where the capital plan looks? I'm just kind of curious about what are the levers actually that you're looking for as you kind of make that determination going into the year-end call.

Raymond Kaszuba

Yes. I don't think there's going to be any changes in the fundamentals in terms of our payout ratio, et cetera. We just recently gave the payout ratio target of 55% to 65% and combined with earnings, we think that gives good direction in terms of how we're thinking about our dividend profile going forward. We will provide more information in February, but some of the things that we're considering is timing of our annual increase, for example, but we'll provide more color in February.

Operator

There are no further questions at this time. I will now turn the call back to Justin Palfreyman, CEO, for closing remarks.

Justin Palfreyman

Well, thanks, everyone, for joining us this morning. We appreciate all the questions and your interest in Northwest Natural Holdings. We are pleased with our year-to-date 2026 performance and our raised guidance range of $3.10 to $3.20 per share. This reflects the confidence we have in the rest of the year and our ability to execute on our growth strategy. As always, please don't hesitate to reach out to Nikki with any further questions. Thank you.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.