NWN 2026年第3四半期決算説明会：EPSガイダンスを3.10〜3.20ドルに引き上げ

ノースウエスト・ナチュラル・ホールディング・カンパニー（NWN）は、年初来の業績好調、建設的な規制当局の決定、運用・保守（O&M）費用の削減を受け、2026年の通期業績ガイダンスを引き上げた。第3四半期決算では全事業で利ざや（マージン）が拡大した一方、減価償却費および資金調達費用の増加によって一部相殺された。

主なポイント

• NWNは年初来の業績、規制当局の決定、規律あるコスト管理を理由に、2026年のEPSガイダンスを3.10〜3.20ドルへ引き上げた。
• 2026年第3四半期の1株当たり損失は0.71ドルとなり、前年同期の0.73ドルから縮小した。ガス公益事業の収益には季節性があり、売上高および利益の大半は冬季の暖房シーズンに計上される。
• 9カ月累計のEPSは6.6%増の1.62ドルとなり、2025年同期の調整後EPS（1.52ドル）から増加した。
• SiEnergyの9カ月累計純利益は440万ドル（1株当たり0.10ドル）増加した。顧客数の増加とPines買収の通期寄与が追い風となった。
• NWNは5億〜5億5,000万ドルの設備投資計画を据え置いた。年初来の設備投資額は2025年同期から12%増加した。
• 年間配当予想は0.03ドル増の1株当たり2.00ドルに引き上げられ、同社にとって2012年以来最大の増配幅となるとともに、71年連続の増配を記録した。

主要財務データ

事業および営業業績

SiEnergy

2026年9月30日までの12カ月間におけるSiEnergyの顧客増加率は約13%であった。経営陣によると、住宅ローン金利の上昇によりテキサス州の住宅市場の動きは鈍化しているものの、顧客増加率は依然として2桁台を維持している。

開発バックログ（受注残）は四半期末時点で約26万5,000区画に達した。2年足らず前にSiEnergyを買収して以来、NWNはこのバックログに約11万区画を追加した。

9月、SiEnergyはNWN傘下となって初となる料金改定で合意に達した。この和解案には、860万ドルの所要総収入引き上げ、9.8%の認可自己資本利益率（ROE）、および60%近い自己資本比率が盛り込まれている。新料金は規制委員会の承認を前提として、11月に発効する見通しである。

この和解では、ガス信頼性インフラプログラム（GRIP）に必要な諸条件も策定された。経営陣は、最終命令の受領を前提として、SiEnergyによる最初のGRIP申請が2027年に行われると見込んでいる。

ノースウエスト・ナチュラル・ガス

ワシントン州の新料金は、承認された複数年料金計画の和解に基づき8月1日に発効した。オレゴン州では、代替料金メカニズム命令により、当初要請していた1,560万ドルに対し、1,300万ドルの所要総収入引き上げが認可された。これらの新料金は10月31日に発効した。

経営陣は、冬季ピーク時の信頼性を維持するためにミスト（Mist）貯蔵施設にコンプレッサーを2台増設するなど、暖房シーズンへの備えが整っていると述べた。

オレゴン州の現行の規制スケジュールでは、NWNは2028年に同州初となる複数年料金改定を申請し、2029年に新料金が発効すると見込んでいる。同社は複数年枠組みが開始されるまでの期間をつなぐため、一般料金改定申請を含む選択肢を検討している。

ノースウエスト・ナチュラル・ウォーター

9月30日までの12カ月間における水道公益事業の顧客増加率は2%をわずかに上回った。経営陣は住宅市場の動きに一定の減速が見られることを認めつつも、長期的な顧客増加率目標である2〜3%を維持した。

同社最大の水道事業であるフットヒルズ（Foothills）は、算定式に基づく料金制度（フォーミュラレート）の要請を含むアリゾナ州での料金改定手続きを継続して進めている。その他に4件の水道料金改定が進められており、2027年初頭に完了する見込みである。

NWNはまた、SiEnergyとノースウエスト・ナチュラル・ウォーターが天然ガス、上水道、下水道サービスを共同で提供するテキサス州初のコミュニティの建設に着手した。経営陣は、ガス事業と水道事業の事業領域が重複していることから、テキサス州がこの複合サービスモデルの主要市場であり続けると述べた。

MX3ガス貯蔵拡張プロジェクト

MX3は、3億ドル規模の連邦エネルギー規制委員会（FERC）規制対象プロジェクトであり、地域のガス貯蔵容量を40億〜50億立方フィート（Bcf）追加するよう設計されている。着工通知（NTP）の発効に伴い25年契約で全量が契約済みとなっており、12.5%の自己資本利益率（ROE）および50%の自己資本比率が設定されている。

経営陣は引き続き2027年末までの着工通知（NTP）発効を目標としている。土地利用不服審査委員会において同プロジェクトの条件付き利用許可に対する不服申し立て手続きが進行中であるが、会社側はこの申し立てはすでにスケジュールに織り込み済みであると述べている。

経営陣のガイダンス

NWNは2026年のEPSガイダンス範囲を3.10〜3.20ドルへ引き上げた。経営陣はこの引き上げの要因として、年初来の計画遂行が予想を上回ったこと、建設的な規制当局の決定、良好なO&M実績を挙げた。

同社は長期的なEPS成長率目標について、MX3を除いた場合は4〜6%、MX3を含めた場合は5〜7%とする方針を改めて表明した。2027年のガイダンスおよび最新の資本見通しは、2月の第4四半期決算発表時に公表する予定である。経営陣は、2030年までの長期資本計画に変更はないと述べた。

ガイダンスは、継続的な顧客基盤の拡大、平年並みの天候、ならびに規制方針、想定される規制上の決定、法改正または規制の大幅な変更がないことを前提としている。

NWNは、すでに発行済みの2,600万ドルを含め、2026年の株式発行総額を4,000万〜5,000万ドルと見込んでいる。経営陣は、ATM（アット・ザ・マーケット）プログラムによって予想される自己資本需要を十分に賄えるとの見解を示した。同社は2026年に計画していた負債による資金調達を完了しており、引き続き変動金利負債のエクスポージャーを10%以下に抑えることを目標としている。

リスクおよび注視事項

• 住宅ローン金利の上昇により、テキサス州および一部の水道事業市場で住宅市場の動きが鈍化している。SiEnergyの顧客増加率（13%）は、経営陣が当初想定していた通期の15〜20%を下回った。
• 第3四半期における利ざやの拡大やO&M実績の改善は、減価償却費および資金調達費用の増加によって一部相殺された。
• ノースウエスト・ナチュラル・ウォーターは、業務集約に伴うO&M費用の増加や、インフラプロジェクトに伴う減価償却費の増加を吸収している。
• オレゴン州の複数年料金枠組みは2029年まで発効しない見込みであり、投資回収のタイムラグが生じる可能性があるが、経営陣は一般料金改定申請を通じてこれに対処する可能性がある。
• MX3は依然として許認可および係争中の不服申し立て手続きの対象となっているが、経営陣は2027年末までの着工通知（NTP）目標を維持している。
• オレゴン州ではガス火力発電に対する規制が存在するものの、経営陣は地域のエネルギー需要がガス貯蔵に対する長期的な需要を引き続き支えるとみている。

アナリスト向け質疑応答の要点

経営陣は、オレゴン州の規制当局における最近の証言によって、複数年料金枠組みが開始される前に暫定申請が必要かどうかの判断が変わることはないと述べた。一般料金改定申請を含め、すべての選択肢が引き続き検討可能である。

テキサス州の住宅市場について、経営陣は金利上昇による減速はあるものの、SiEnergyの成長は依然として力強いと評した。また、金利環境が大きく変化しない限り、2〜3年前の成長のピークは過ぎた可能性が高いと述べた。

同社は、MX3の不服申し立て手続きは予定通りに進んでおり、2027年末までに着工通知（NTP）を受領するという見通しに変更はないことを確認した。

配当に関して、経営陣は55〜65%の目標配当性向を含め、方針の基本原則に変更はないと述べた。2月の更新情報には、年次増配の時期に関する検討が含まれる可能性がある。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

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.

質疑応答

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.