Asset Retirement Obligations

12 Months Ended

Sep. 30, 2025

Asset Retirement Obligation [Abstract]

The Company accounts for asset retirement obligations in accordance with the authoritative guidance that requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. An asset retirement obligation is defined as a legal obligation associated with the retirement of a tangible long-lived asset in which the timing and/or method of settlement may or may not be conditional on a future event that may or may not be within the control of the Company. When the liability is initially recorded, the entity capitalizes the estimated cost of retiring the asset as part of the carrying amount of the related long-lived asset. Over time, the liability is adjusted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. The Company estimates the fair value of its asset retirement obligations based on the discounting of expected cash flows using various estimates, assumptions and judgments regarding certain factors such as the existence of a legal obligation for an asset retirement obligation; estimated amounts and timing of settlements; the credit-adjusted risk-free rate to be used; and inflation rates. Asset retirement obligations incurred in the current period were Level 3 fair value measurements as the inputs used to measure the fair value are unobservable.

The Company has recorded an asset retirement obligation representing plugging and abandonment costs associated with the Integrated Upstream and Gathering segment’s natural gas production wells and has capitalized such costs in property, plant and equipment (i.e. the full cost pool). Asset retirement obligation costs

have also been recorded in the Integrated Upstream and Gathering segment for certain costs connected with the retirement of the gathering lines and other components of the gathering system, including storage tanks. These costs are primarily related to the capping and purging of pipe, which are generally abandoned in place when retired.

In addition to the asset retirement obligation recorded in the Integrated Upstream and Gathering segment, the Company has recorded future asset retirement obligations associated with the plugging and abandonment of natural gas storage wells in the Pipeline and Storage segment and the removal of asbestos and asbestos-containing material in various facilities in the Utility and Pipeline and Storage segments. Asset retirement obligation costs related to storage tanks have been recorded in the Utility and Pipeline and Storage segments. The Company has also recorded asset retirement obligations for certain costs connected with the retirement of the distribution mains, services and other components of the pipeline system in the Utility segment and the transmission mains and other components in the pipeline system in the Pipeline and Storage segment. The retirement costs within the distribution and transmission systems are primarily for the capping and purging of pipe, which are generally abandoned in place when retired, as well as for the clean-up of PCB contamination associated with the removal of certain pipe.

During fiscal 2024 and fiscal 2025, the Company experienced an increase in plugging and abandonment costs associated with the Integrated Upstream and Gathering segment’s natural gas production wells and the Pipeline and Storage segment’s natural gas storage wells, which contributed to an increase in the asset retirement obligation in both years. The increase in plugging and abandonment costs is the primary component of the Revisions of Estimates amount for fiscal 2024 and fiscal 2025 shown in the table below.

The following is a reconciliation of the change in the Company’s asset retirement obligations:


	Year Ended September 30
	2025		2024		2023
	(Thousands)
Balance at Beginning of Year	$	203,006	$	165,492	$	161,545
Liabilities Incurred	5,210		2,367		3,313
Revisions of Estimates	56,570		51,967		6,728
Liabilities Settled	(38,862)		(25,556)		(14,448)
Accretion Expense	10,863		8,736		8,354
Balance at End of Year	$	236,787	$	203,006	$	165,492