Regulatory Matters

12 Months Ended

Sep. 30, 2025

Regulatory Assets and Liabilities, Other Disclosure [Abstract]

Regulatory Assets and Liabilities

The Company has recorded the following regulatory assets and liabilities:


	At September 30
	2025		2024
	(Thousands)
Regulatory Assets:
Recoverable Future Taxes (Note G)	$	89,247	$	80,084
Unamortized Debt Expense (Note A)	6,236		5,604
Other Regulatory Assets:
Pension Costs (Note K)	42,602		30,259
NY Rate Case Levelization and Tracking Mechanisms(1)	28,688		—
Asset Retirement Obligations (Note E)	24,634		21,951
Post-Retirement Benefit Costs (Note K)	13,306		7,932
System Modernization / Improvement Tracker (See Regulatory Mechanisms in Note A)	12,625		31,362
Other	13,631		16,518
Total Long-Term Regulatory Assets	$	230,969	$	193,710
Current Regulatory Assets:
Unrecovered Purchased Gas Costs (See Regulatory Mechanisms in Note A)	5,769		—
Other Current Assets:
System Modernization / Improvement Tracker (See Regulatory Mechanisms in Note A)	14,481		15,681
Other	20,881		22,583
Total Regulatory Assets	$	272,100	$	231,974

(1)New York Rate Case Levelization and Tracking Mechanisms were approved in accordance with Distribution Corporation’s New York rate settlement on December 19, 2024, as discussed below. The mechanisms include: (a) levelization deferral of $17.8 million which relates to a volumetric surcredit within the Company’s delivery adjustment charge that minimizes customer bill impacts, (b) uncollectible expense tracker of $9.8 million, which tracks and reconciles the actual uncollectible expense to the amounts recovered in base rates and, (c) property tax tracker of $1.1 million, which represents the amount deferred between actual property taxes incurred and the level included in customer rates.


	At September 30
	2025		2024
	(Thousands)
Regulatory Liabilities:
Taxes Refundable to Customers (Note G)	$	306,335	$	305,645
Cost of Removal Regulatory Liability	307,659		292,477
Other Regulatory Liabilities:
Post-Retirement Benefit Costs (Note K)	108,714		135,399
Environmental Site Remediation Costs (Note L)	1,800		5,390
Other	11,430		10,663
Total Long-Term Regulatory Liabilities	$	735,938	$	749,574
Current Regulatory Liabilities:
Amounts Payable to Customers (See Regulatory Mechanisms in Note A)	968		42,720
Other Current and Accrued Liabilities:
Post-Retirement Benefit Costs (Note K)	5,800		5,800
Other	14,824		23,552
Total Regulatory Liabilities	$	757,530	$	821,646

If for any reason the Company ceases to meet the criteria for application of regulatory accounting treatment for all or part of its operations, the regulatory assets and liabilities related to those portions ceasing to meet such criteria would be eliminated from the Consolidated Balance Sheets and included in income of the period in which the discontinuance of regulatory accounting treatment occurs.

Cost of Removal Regulatory Liability

In the Company’s Utility and Pipeline and Storage segments, costs of removing assets (i.e. asset retirement costs) are collected from customers through depreciation expense. These amounts are not a legal retirement obligation as discussed in Note E — Asset Retirement Obligations. Rather, they are classified as a regulatory liability in recognition of the fact that the Company has collected dollars from customers that will be used in the future to fund asset retirement costs.

New York Jurisdiction

Distribution Corporation’s current delivery rates in its New York jurisdiction were approved by the NYPSC in an order issued on December 19, 2024 with rates effective January 1, 2025 (“2024 Rate Order”). The 2024 Rate Order authorizes a three-year rate plan effective October 1, 2024, with a make-whole provision allowing full recovery of revenues that would have been billed at the new rates between October 1, 2024 and December 31, 2024. It also reflects a return on equity of 9.7% and authorizes a revenue requirement increase of $57.3 million in fiscal 2025, an additional revenue requirement increase of $15.8 million in fiscal 2026, and an additional revenue requirement increase of $12.7 million in fiscal 2027. These revenue requirement increases are being reflected in customer bills on a levelized basis over the three-year rate plan. The revenue requirement for each year of the three-year plan has been reduced by $14 million for actuarial projections of income that is expected to be recognized for qualified pension and other post-retirement benefits. Qualified pension and other post-retirement benefit income or costs are matched with amounts included in revenue resulting in zero impact to earnings. The 2024 Rate Order approves the continuation of several ratemaking mechanisms, including revenue decoupling and WNA, and establishes a number of new cost trackers and regulatory deferrals. It also includes an earnings sharing mechanism, gas safety and customer service performance metrics (including maintaining the Company’s leak prone pipe replacement program), and provisions that will facilitate achievement of the emissions reduction goals of the CLCPA.

Pennsylvania Jurisdiction

Distribution Corporation’s current delivery rates in its Pennsylvania jurisdiction were approved by the PaPUC in an order issued on June 15, 2023 with rates effective August 1, 2023 (“2023 Rate Order”). The 2023 Rate Order provided for, among other things, an increase in Distribution Corporation’s annual base rate operating revenues of $23 million and authorized a new weather normalization adjustment mechanism.

On April 10, 2024, Distribution Corporation filed with the PaPUC a petition for approval of a distribution system improvement charge (“DSIC”) to recover, between base rate cases, capital expenses related to eligible property constructed or installed to rehabilitate, improve and replace portions of the Company’s natural gas distribution system. The DSIC petition was approved by the PaPUC on December 5, 2024, and on January 1, 2025, the Company initiated recovery of eligible costs on incremental rate base added after September 30, 2024. During the year ended September 30, 2025, Distribution Corporation recovered $0.9 million from customers.

FERC Jurisdiction

Supply Corporation’s rate settlement was approved June 11, 2024 with rates effective February 1, 2024, and provides that Supply Corporation may make a rate filing for new rates to be effective at any time. As well, any party can make a filing under NGA Section 5. Supply Corporation has no rate case currently on file.

On March 17, 2025, FERC approved an amendment to Empire’s 2019 rate case settlement, which provides for a modest reduction in Empire’s transportation unit rates, effective November 1, 2025. This settlement amendment is estimated to decrease Empire’s revenues on a yearly basis by approximately $0.5 million. Empire will not be able to file a new Section 4 rate case before April 30, 2027 and is required to file a Section 4 rate case by May 31, 2031.