What changed in this filing

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Item 1A. Risk Factors

2023-11-17 compared with 2022-11-18 · 66 added, 61 removed, 221 unchanged (36% of the section changed)

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nationally determined contribution to achieve a fifty to fifty-two percent reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030.

In addition to the federal reentry into the Paris

Agreement, state and local governments, non-governmental organizations, investment firms, and financial institutions have made, and will likely continue to make, more aggressive efforts to reduce emissions and advance the objectives of the Paris Agreement.

Executive orders from the federal administration, in addition to federal, state and local legislative and regulatory initiatives proposed or adopted in an attempt to limit the effects of climate change, including greenhouse gas emissions, could have significant impacts on the energy industry including government-imposed limitations, prohibitions or moratoriums on the use and/or production of gas, establishment of a carbon tax and/or methane fee, lack of support for system modernization, as well as accelerated depreciation of assets and/or stranded assets.

Federal and state legislatures have from time to time considered bills that would establish a cap-and-trade program, methane fee or carbon tax to incent the reduction of greenhouse gas emissions.

Executive orders from the federal administration, in

addition to federal, state and local legislative and regulatory initiatives proposed or adopted in an attempt to limit the effects of climate change, including greenhouse gas emissions, could have significant impacts on the energy industry including government-imposed limitations, prohibitions or moratoriums on the use and/or production of natural gas, establishment of a carbon tax and/or methane fee, lack of support for system modernization, as well as accelerated depreciation of assets and/or stranded assets.

Federal and state legislatures have from time to time considered bills that would establish a cap-and-trade program, cap-and-invest program, methane fee or carbon tax to incent the reduction of greenhouse gas emissions.

For example, in August 2022, the federal Inflation Reduction Act was signed into law, which includes a methane charge that is expected to be applicable to the reported annual methane emissions of certain oil and gas facilities, above specified methane intensity thresholds, starting in calendar year 2024.

In addition, the New York State legislature, in early 2021, proposed a bill known as the Climate and Community Investment Act, which proposed an escalating fee starting at $55 per short ton of carbon dioxide equivalent on any carbon-based fuels sold, used or brought into the state.

That bill did not pass, but similar legislation may be proposed in the future.

If the Company becomes subject to new or revised cap-and-trade programs, methane charges, fees for carbon-based fuels or other similar costs or charges, the Company may experience additional costs and incremental operating expenses, which would impact our future earnings and cash flows.

A number of states have also adopted energy strategies or plans with goals that include the reduction of greenhouse gas emissions.

For example, Pennsylvania has a methane reduction framework for the natural gas industry which has resulted in permitting changes with the stated goal of reducing methane emissions from well sites, compressor stations and pipelines.

In addition, the NYPSC initiated a proceeding to consider climate-related financial disclosures at the utility operating level, and in 2019, the New York State legislature passed the CLCPA, which created emission reduction and electric generation mandates, and could ultimately impact the Utility segment’s customer base and business.

Pursuant to the CLCPA, New York's Climate Action Council issued for comment a draft scoping plan that includes recommendations to decommission substantial portions of the natural gas system and curtail use of natural gas and natural gas appliances.

Legislation or regulation that aims to reduce greenhouse gas emissions could also include natural gas bans, greenhouse gas emissions limits and reporting requirements, carbon taxes and/or similar fees on carbon dioxide, methane or equivalent emissions, restrictive permitting, increased efficiency standards requiring system remediation and/or changes in operating practices, and incentives or mandates to conserve energy or use renewable energy sources.

NYDEC finalized its Part 203 Oil and Gas Sector Rule in March 2022, which significantly increases leak detection and repair inspections, recordkeeping, reporting, and notification requirements for multiple sources along city gates, transmission pipelines, compressor stations, storage facilities, and gathering lines.

Additionally, the trend toward increased energy conservation, change in consumer behaviors, competition from renewable energy sources, and technological advances to address climate change may reduce the demand for natural gas.

Furthermore, in 2019, the New York State legislature passed the CLCPA, which created emission reduction and electrification mandates, and could ultimately impact the Utility segment’s customer base and business.

Pursuant to the CLCPA, New York's Climate Action Council (“CAC”) approved a final scoping plan that includes recommendations to strategically downsize and decarbonize the natural gas system and curtail use of natural gas and natural gas appliances.

The final scoping plan was approved on December 19, 2022 and includes detailed recommendations to meet the CLCPA’s emissions reduction targets in the transportation, buildings, electricity, industry, agriculture & forestry and waste sectors.

The final scoping plan also recommends statewide and cross-sector policies relevant to gas system transition, economywide strategies, land use, local government and adaptation and resilience.

Additionally, the scoping plan recommends the implementation of a cap-and-invest program in New York.

In January 2023, New York’s Governor directed the NYDEC and the New York State Energy Research and Development Authority to advance an economywide cap-and-invest program that establishes a declining cap on greenhouse gas emissions, and invests in programs to drive emissions reductions.

If this proposed program or a similar program becomes effective and the Company becomes subject to new or revised cap-and-trade programs, cap-and-invest programs, methane charges, fees for carbon-based fuels or other similar costs or charges, the Company may experience additional costs and incremental operating expenses, which would impact our future earnings and cash flows, and may also experience decreased revenue in the event that implementation of these policies leads to reduced demand for natural gas.

In addition to the scoping plan, legislation or regulation that aims to reduce greenhouse gas emissions could also include natural gas bans, greenhouse gas emissions limits and reporting requirements, carbon taxes and/or similar fees on carbon dioxide, methane or equivalent emissions, restrictive permitting, increased efficiency standards requiring system remediation and/or changes in operating practices, and incentives or mandates to conserve energy or use renewable energy sources.

For example, in May 2023, New York State passed legislation that prohibits the installation of fossil fuel burning equipment and building systems in new buildings commencing on or after December 31, 2025, subject to various exemptions.

While the Company does not currently expect that this legislation will have a substantial impact on its financial results or operations, future legislation or regulation that aims to reduce natural gas demand or to impose additional operations requirements or restrictions on natural gas facilities, if effectuated, could impact our future earnings and cash flows.

For further discussion of the risks associated with environmental regulation to address climate change, refer to Item 2, MD&A under the heading “Environmental Matters.”

Further, recent trends directed toward a low-carbon economy could shift funding away from, or limit or restrict certain sources of funding for, companies focused on fossil fuel-related development or carbon-intensive investments.

To the extent financial markets view climate change and greenhouse gas emissions as a financial risk, the Company’s cost of and access to capital could be negatively impacted.

Organized opposition to the natural gas industry could have an adverse effect on Company operations.

Organized opposition to the natural gas industry, including exploration and production activity, pipeline expansion and replacement projects, and the extension and continued operation of natural gas distribution systems, may continue to increase as a result of, among other things, safety incidents involving natural gas facilities, and concerns raised by politicians, financial institutions and advocacy groups about greenhouse gas

emissions, hydraulic fracturing, or fossil fuels generally.

Organized opposition to the natural gas industry, including exploration and production activity, pipeline expansion and replacement projects, and the extension and continued operation of natural gas distribution systems, may continue to increase as a result of, among other things, safety incidents involving natural gas facilities, and concerns raised by policymakers, financial institutions and advocacy groups about greenhouse gas emissions, hydraulic fracturing, or fossil fuels generally.

This opposition may lead to increased regulatory and legislative initiatives that could place limitations, prohibitions or moratoriums on the use of natural gas, impose costs tied to carbon emissions, provide cost advantages to alternative energy sources, or impose mandates that increase operational costs associated with new natural gas infrastructure and technology.

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In turn, these factors could impact the competitive position of natural gas, ultimately affecting the Company’s results of operations and cash flows.

Delays or changes in plans or costs with respect to Company projects, including regulatory delays or denials with respect to necessary approvals, permits or orders, could delay or prevent anticipated project completion and may result in asset write-offs and reduced earnings.

Delays or changes in plans or costs with respect to Company projects, including regulatory delays or denials with respect to necessary approvals, permits or orders, could delay or prevent anticipated project completion, as well as the renewal or modification of key permits for ongoing operations, and may result in asset write-offs and reduced earnings.

Construction of planned distribution, gathering, and transmission pipeline and storage facilities, as well as the expansion and replacement of existing facilities, and the development of new natural gas wells, is subject to various regulatory, environmental, political, legal, economic and other development risks, including the ability to obtain necessary approvals and permits from regulatory agencies on a timely basis and on acceptable terms, or at all.

Existing or potential third-party opposition, such as opposition from landowner and environmental groups, which are beyond our control, could materially affect the anticipated construction of a project.

In addition, third parties could impede the Company’s acquisition, expansion or renewal of rights-of-way or land rights on a timely basis and on acceptable terms.

Any delay in project development or construction may prevent a planned project from going into service when anticipated, which could cause a delay in the receipt of revenues from those facilities, result in asset write-offs and materially impact operating results or anticipated results.

Any delay in project development or construction may prevent a planned project from going into service when anticipated, which could cause a delay in the receipt of revenues from those facilities, result in increased project costs due to extended construction timeframes, asset write-offs and materially impact operating results or anticipated results.

Additionally, delays in pipeline construction projects or gathering facility completion could impede the Exploration and Production segment's ability to transport its production to premium markets, or to fulfill obligations to sell at contracted delivery points.

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Additionally, supply chain disruptions, and the associated costs and inflation related thereto, could have an impact on the Company's operations.

Economic conditions in the Company’s utility service territories, along with legislative and regulatory prohibitions and/or limitations on terminations of service, also impact its collections of accounts receivable.

Economic conditions in the Company’s utility service

territories, along with legislative and regulatory prohibitions and/or limitations on terminations of service, also impact its collections of accounts receivable.

Customers of the Company’s Utility segment may have particular trouble paying their bills during periods of declining economic activity, high inflation, or high commodity prices, potentially resulting in increased bad debt expense and reduced earnings.

Similarly, if reductions were to occur in funding of the federal Low Income Home Energy Assistance Program, bad debt expense could increase and earnings could decrease.

In addition, oil and natural gas exploration and production companies that are customers of the Company’s Pipeline and Storage segment may decide not to renew contracts for the same transportation capacity.

Certain customers of the Company's Exploration and Production segment can represent a concentrated risk during times of high commodity prices and high hedge losses.

Any of these events

or circumstances could have or contribute to a material adverse effect on the Company’s results of operations, financial condition and cash flows.

In addition, exploration and production companies that are customers of the Company’s Pipeline and Storage segment may decide not to renew contracts for the same transportation capacity.

Certain customers of the Company's Exploration and Production segment can represent a concentrated risk during times of high commodity prices and high hedging losses.

Any of these events or circumstances could have or contribute to a material adverse effect on the Company’s results of operations, financial condition and cash flows.

Changes in interest rates may affect the Company’s financing and its regulated businesses’ rates of return.

Rising interest rates may impair the Company’s ability to cost-effectively finance capital expenditures and to refinance maturing debt.

Rising interest rates may impair the Company’s ability to cost-effectively finance capital expenditures and may increase the rates at which the Company can refinance maturing debt.

In addition, the Company’s authorized rate of return in its regulated businesses is based upon certain assumptions regarding interest rates.

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If interest rates are higher than assumed rates, the Company’s ability to earn its authorized rate of return may be adversely impacted.

Loans to the Company under its committed credit facilities may be alternate base rate loans or term SOFR loans.

SOFR is a reference rate (the Secured Overnight Financing Rate) published by the Federal Reserve Bank of New York.

SOFR is one available replacement for LIBOR (the London Interbank Offered Rate), which the U.K.’s Financial Conduct Authority is phasing out as a benchmark.

The change from LIBOR to SOFR could expose the Company’s borrowings to less favorable rates.

If the change to SOFR results in increased interest rates or if the Company's lenders have increased costs due to the change, then the Company's debt that uses benchmark rates could be affected and, in turn, the Company's cash flows and interest expense could be adversely impacted.

Fluctuations in natural gas prices could adversely affect revenues, cash flows and profitability.

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Both short-term and long-term price trends affect the economics of exploring for, developing, producing, and gathering natural gas.

Natural gas prices can be volatile and can be affected by various factors, including weather conditions, natural disasters, the level of consumer product demand, national and worldwide economic conditions, economic disruptions caused by terrorist activities, acts of war or major accidents, political conditions in foreign countries, the price and availability of alternative fuels, the proximity to, and availability of, sufficient capacity on transportation and liquefaction facilities, regional and global levels of supply and demand, energy conservation measures, and government regulations.

Natural gas prices can be volatile and can be affected by various factors, including weather conditions, natural disasters, consumer demand, national and worldwide economic conditions, economic disruptions caused by terrorist activities, acts of war or major accidents, domestic and foreign political conditions and events, the price and availability of alternative fuels, the proximity to, and availability of, sufficient capacity on transportation and liquefaction facilities, regional and global levels of supply and demand, energy conservation measures, and government regulations.

The Company sells the natural gas that it produces at a combination of current market prices, indexed prices or through fixed-price contracts.

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The prices the Company receives depend upon factors beyond the Company’s control, including the factors affecting price mentioned above.

The Company believes that any prolonged reduction in natural gas prices could restrict its ability to continue the level of exploration and production activity the Company otherwise would pursue, which could have a material adverse effect on its future revenues, cash flows and results of operations.

Any prolonged reduction in natural gas prices could result in the Company reducing the level of exploration and production activity the Company otherwise would pursue, which could have a material adverse effect on its future revenues, cash flows and results of operations.

In the Company’s Pipeline and Storage segment, significant changes in the price differential between equivalent quantities of natural gas at different geographic locations could adversely impact the Company.

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Significant changes in the price differential between futures contracts for gas having different delivery dates could also adversely impact the Company.

For example, if the prices of natural gas futures contracts for winter deliveries to locations served by the Pipeline and Storage segment decline relative to the prices of such contracts for summer deliveries (as a result, for instance, of increased production of gas within the segment’s geographic area or other

factors), then demand for the Company’s natural gas storage services driven by that price differential could decrease.

For example, if the prices of natural gas futures contracts for winter deliveries to locations served by the Pipeline and Storage segment decline relative to the prices of such contracts for summer

deliveries (as a result, for instance, of increased production of gas within the segment’s geographic area or other factors), then demand for the Company’s natural gas storage services driven by that price differential could decrease.

These changes could adversely affect future revenues, cash flows and results of operations.

In the Company’s Utility segment, during periods when natural gas prices are significantly higher than historical levels, customers may have trouble paying the resulting higher bills, which could increase bad debt expenses and ultimately reduce earnings.

In the Company’s Utility segment, during periods when natural gas prices are significantly higher than historical levels, customer demand could be reduced, thereby decreasing revenue.

Customers may also have trouble paying the resulting higher bills when gas prices are higher or in periods of economic uncertainty, which could increase bad debt expenses and could ultimately reduce earnings.

Additionally, increases in the cost of purchased gas affect cash flows and can therefore impact the amount or availability of the Company’s capital resources.

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To protect itself to some extent against price volatility and to lock in fixed pricing on natural gas production for certain periods of time, the Company’s Exploration and Production segment regularly enters into commodity price derivatives contracts (hedging arrangements) with respect to a portion of its expected production.

These contracts may extend over multiple years, covering a substantial majority of the Company’s expected energy production over the course of the current fiscal year, and lesser percentages of subsequent years' expected production.

These contracts may extend over multiple years, covering a substantial majority of the Company’s expected natural gas production over the course of the current fiscal year, and lesser percentages of subsequent years' expected production.

These contracts reduce exposure to subsequent price drops but can also limit the Company’s ability to benefit from increases in commodity prices.

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However, unauthorized speculative trades, if they were to occur, could expose the Company to substantial losses to cover positions in its derivatives contracts.

In addition, in the event the Company’s actual production of natural gas falls short of hedged forecast production, the Company may incur substantial losses to cover its hedges.

In addition, in the event the Company’s actual production of natural gas falls short of hedged volumes, the Company may incur substantial losses to cover its hedges to the extent the hedges are in a loss position.

The Dodd-Frank Act increased federal oversight and regulation of the over-the-counter derivatives markets and certain entities that participate in those markets.

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the assumed effect of governmental regulation;

and assumptions

concerning natural gas prices, production and development costs, severance and excise taxes, and capital expenditures.

and assumptions concerning natural gas prices, production and development costs, severance and excise taxes, and capital expenditures.

Changes in natural gas prices impact the quantity of economic natural gas reserves.

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Depending on the magnitude of any decrease in average prices, that charge could be material.

Under the Company's existing indenture covenants, an impairment could restrict the Company's ability to issue incremental long-term unsecured indebtedness for a period of time, beginning with the fourth calendar month following the impairment.

Under the Company's existing indenture covenants, an impairment could restrict the Company's ability to issue

incremental long-term unsecured indebtedness for a period of time, beginning with the fourth calendar month following the impairment.

In addition, because an impairment results in a charge to retained earnings, it lowers the Company's total capitalization, all other things being equal, and increases the Company's debt to capitalization ratio.

As a result, an impairment can impact the Company's ability to maintain compliance with the debt to capitalization covenant set forth in its credit facilities.

For example, for the fiscal year ended September 30, 2020 and the quarter ended December 31, 2020, the Company recognized non-cash, pre-tax impairment charges on its oil and natural gas properties of $449.4 million and $76.2 million, respectively.

As a result, an impairment can impact the Company's ability to maintain compliance with the debt to capitalization covenant set forth in its committed credit facility.

The Company last recognized non-cash, pre-tax impairment charges on its oil and natural gas properties in fiscal years 2020 and 2021, in the amounts of $449.4 million and $76.2 million, respectively.

OPERATIONAL RISKS

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and other hazards and risks that may cause personal injury, death, property damage, environmental damage or business interruption losses.

Additionally, the Company’s facilities, machinery, and equipment may be subject to sabotage.

Additionally, the Company’s facilities, machinery, equipment, and technology/software systems may be subject to sabotage.

These events, in turn, could lead to governmental investigations, recommendations, claims, fines or penalties.

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In addition, any substantial disruptions to the services provided by our midstream providers could cause us to curtail a significant amount of our production or could impair our ability to deliver natural gas to our utility customers and could have a material adverse effect on the Company’s results of operations, financial condition, and cash flows.

Furthermore, as substantially all of our production is transported from the well pad to interconnections with various FERC-regulated pipelines though our affiliated gathering facilities, such a production curtailment could result in significantly reduced throughput on those facilities, adversely affecting revenues and cash flows of our Gathering business.

Furthermore, as substantially all of our production is transported from the well pad to interconnections with various FERC-regulated pipelines through our affiliated gathering facilities, such a production curtailment could result in significantly reduced throughput on those facilities, adversely affecting revenues and cash flows of our Gathering segment.

The disruption of the Company's information technology and operational technology systems, including third party attempts to breach the Company’s network security, could adversely affect the Company's financial results.

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In addition, the Company's information technology and operational technology systems are subject to attempts by others to gain unauthorized access, or to otherwise introduce malicious software.

attempts might be the result of industrial or other espionage, or actions by hackers seeking to harm the Company, its services or customers.

These attempts might be the result of industrial or other espionage, or actions by hackers seeking to harm the Company, its services or customers.

These more sophisticated cyber-related attacks, as well as cybersecurity failures resulting from human error, pose a risk to the security of the Company’s systems and networks and the confidentiality, availability and integrity of the Company’s and its customers’ data.

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The Company seeks to prevent, detect and investigate security incidents, but in some cases the Company might be unaware of an incident or its magnitude and effects.

In addition to existing risks, the adoption of new technologies may also increase the Company’s exposure to data breaches or the Company’s ability to detect and remediate effects of a breach.

In addition to existing risks, the adoption of new technologies may increase the Company’s exposure to data breaches or the Company’s ability to detect and remediate effects of a breach.

The Company has experienced attempts to breach its network security and has received notifications from third-party service providers who have experienced disruptions to services or data breaches where Company data was potentially impacted.

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Even though insurance coverage is in place for cyber-related risks, if a material disruption or breach were to occur, the Company’s operations, earnings, cash flows and financial condition could be adversely affected to the extent not fully covered by such insurance.

The amount and timing of actual future natural gas production and the cost of drilling are difficult to predict and may vary significantly from reserves and production estimates, which may reduce the Company’s earnings.

The amount and timing of actual future natural gas production and the costs of our natural gas production operations are difficult to predict and may vary significantly from estimates, which may reduce the Company’s earnings.

There are many risks in developing natural gas, including numerous uncertainties inherent in estimating quantities of proved natural gas reserves and in projecting future rates of production and timing of development expenditures.

The future success of the Company’s Exploration and Production and Gathering segments depends on its ability to develop additional natural gas reserves that are economically recoverable, and its failure to do so may reduce the Company’s earnings.

The total and timing of actual future production may vary significantly from reserves and production estimates.

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Drilling for natural gas can be unprofitable, not only from non-productive wells, but from productive wells that do not produce sufficient revenues to return a profit.

Also, title problems, competition and cost to acquire mineral rights, weather conditions, governmental requirements, including completion of environmental impact analyses and compliance with other environmental laws and regulations, and shortages or delays in the delivery of equipment and services can delay drilling operations or result in their cancellation.

operations or result in their cancellation.

The cost of drilling, completing, and operating wells is significant and often uncertain, and new wells may not be productive or the Company may not recover all or any portion of its investment.

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The Company cannot make assurances that it will be able to find or acquire additional reserves at acceptable costs.

The Company's ability to access water and opportunities for disposal or recycling produced water can impact drilling and completion operations.

The drilling and hydraulic fracturing process requires significant volumes of water and an ability to recycle or dispose of water produced as a by-product of gas production.

Limitations or restrictions on the Company's ability to secure sufficient amounts of water, including disruptions from natural causes (such as drought) or issues with transportation availability and costs, could impact its operations.

If the Company is unable to secure adequate water volumes, drilling and completions can be delayed, or it would have to obtain new sources of water at increased costs.

Similarly, if the Company experiences limitations or restrictions on its ability to recycle or dispose of its produced water, whether due to environmental regulations, permit requirements, transportation issues or other factors, producing wells may need to be shut-in and new wells may be delayed until such time as adequate recycling or disposal capacity is obtained, which can require significant lead times for permitting and could result in increased costs, delays in the Company's operations and adverse impacts on its cash flow and results of operations.

The physical risks associated with climate change may adversely affect the Company’s operations and financial results.

Climate change could create acute and/or chronic physical risks to the Company’s operations, which may adversely affect financial results.

Acute physical risks include more frequent and severe weather events, which may result in adverse physical effects on portions of U.S.

natural gas infrastructure, and could disrupt the Company’s supply chain and ultimately its operations.

Acute physical risks include more frequent and severe weather events, which may result in adverse physical effects on portions of natural gas infrastructure, and could disrupt the Company’s supply chain and ultimately its operations.

Disruption of production activities, as well as natural gas transportation and distribution systems, could result in reduced operational efficiency, and customer service interruption.

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To the extent the Company’s regulated businesses are unable to recover those costs, or if the recovery of those costs results in higher rates and reduced demand for Company services, the Company’s future financial results could be adversely impacted.

Chronic physical risks include long-term shifts in climate patterns resulting in new storm patterns or chronic increased temperatures, which could cause demand for gas to increase or decrease as a result of warmer weather and less degree days, and adversely impact the Company's future financial results.

Chronic physical risks include long-term shifts in climate patterns resulting in new storm patterns or chronic increased temperatures, which could impact natural gas demand, and adversely impact the Company's future financial results.

Disputes with collective bargaining units representing the Company’s workforce, and work stoppage (e.g.

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The Company’s businesses are subject to regulation under a wide variety of federal and state laws, regulations and policies.

Existing statutes and regulations, including current tax rates, may be revised or reinterpreted and new laws and regulations may be adopted or become applicable to the Company, which may increase the Company's costs, require refunds to customers or affect its business in ways that the Company cannot predict.

Existing statutes and regulations, including current tax rates and state prevailing wage rate schedules, may be revised or reinterpreted and new laws and regulations may be adopted or become applicable to the Company or its contractors, which may increase the Company's costs, require refunds to customers or affect its business in ways that the Company cannot predict.

Administrative agencies may apply existing laws and regulations in unanticipated, inconsistent or legally unsupportable ways, making it difficult to develop and complete projects, and harming the economic climate generally.

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Administrative proceedings or increased regulation by these agencies could lead to operational delays or restrictions and increased expense for one or more of the Company’s subsidiaries.

The Company is subject to the jurisdiction of the Pipeline and Hazardous Materials Safety Administration (PHMSA).

The Company is subject to the jurisdiction of the PHMSA.

The PHMSA issues regulations and conducts evaluations, among other things, that set safety standards for pipelines and underground storage facilities.

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The Company is subject to the jurisdiction of the FERC with respect to Supply Corporation, Empire and some transactions performed by other Company subsidiaries.

The FERC, among other things, approves the rates

that Supply Corporation and Empire may charge to their gas transportation and/or storage customers.

The FERC, among other things, approves the rates that Supply Corporation and Empire may charge to their gas transportation and/or storage customers.

Those approved rates also impact the returns that Supply Corporation and Empire may earn on the assets that are dedicated to those operations.

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These laws, regulations and policies concern the generation, storage, transportation, disposal, emission or discharge of pollutants, contaminants, hazardous substances and greenhouse gases into the environment, the reporting of such matters, and the general protection of public health, natural resources, wildlife and the environment.

For example, currently applicable environmental laws and regulations restrict the types, quantities and concentrations of materials that can be released into the environment in connection with regulated activities, limit or prohibit activities in certain protected areas, and may require the Company to investigate and/or remediate contamination at certain current and former properties regardless of whether such contamination resulted from the Company’s actions or whether such actions were in compliance with applicable laws and regulations at the time they were taken.

For example, currently applicable environmental laws and regulations restrict the types, quantities and concentrations of

materials that can be released into the environment in connection with regulated activities, limit or prohibit activities in certain protected areas, and may require the Company to investigate and/or remediate contamination at certain current and former properties regardless of whether such contamination resulted from the Company’s actions or whether such actions were in compliance with applicable laws and regulations at the time they were taken.

Moreover, spills or releases of regulated substances or the discovery of currently unknown contamination could expose the Company to material losses, expenditures and environmental, health and safety liabilities.

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Various state legislative and regulatory initiatives regarding the exploration and production business have been proposed or adopted in the northeast United States affecting the Marcellus and Utica Shale gas plays.

These initiatives include potential new or updated statutes and regulations governing the drilling, casing, cementing, testing, monitoring and abandonment of wells, the protection of water supplies and restrictions on water use and water rights, hydraulic fracturing operations, surface owners’ rights and damage compensation, the spacing of wells, use and disposal of potentially hazardous materials, and environmental and safety issues regarding gas pipelines.

These initiatives include potential new or updated statutes and regulations governing the drilling, casing, cementing, testing, monitoring and abandonment of wells, the protection of water supplies and restrictions on water use and water rights, hydraulic fracturing operations, increased setback requirements, surface owners’ rights and damage compensation, the spacing of wells, use and disposal of potentially hazardous materials, and environmental and safety issues regarding natural gas pipelines.

New permitting fees and/or severance taxes for natural gas production are also possible.

Additionally, legislative initiatives in the U.S.

Congress and regulatory studies, proceedings or rule-making initiatives at federal, state or local agencies focused on the hydraulic fracturing process, the use of underground injection control wells for produced water disposal, and related operations could result in operational delays or prohibitions and/or additional permitting, compliance, reporting and disclosure requirements, which could lead to increased operating costs and increased risks of litigation for the Company.

Congress and environmental and health studies, proceedings or rule-making initiatives at federal, state or local agencies focused on the hydraulic fracturing process, the use of underground injection control wells for produced water disposal, and related operations could result in operational delays or prohibitions and/or additional permitting, compliance, reporting and disclosure requirements, which could lead to increased operating costs and increased risks of litigation for the Company.

The Company could be adversely affected by the delayed recovery or disallowance of purchased gas costs incurred by the Utility segment.

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Extreme weather events, variations in seasonal weather, and other events disrupting supply and/or demand could cause the Company to experience unforeseeable and unprecedented increases in the costs of purchased natural gas.

Any prudently incurred natural gas costs could be subject to deferred recovery if regulators determine such costs are detrimental to customers in the short-term.

Prudently incurred natural gas costs could be subject to deferred recovery if regulators determine such costs are detrimental to customers in the short-term.

Furthermore, there is a risk of disallowance of full recovery of these costs if regulators determine that Distribution Corporation was imprudent in making its natural gas purchases.

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Consequently, real or anticipated changes in the Company’s credit ratings will generally affect the market value of the specific debt instruments that are rated, as well as the market value of the Company’s common stock.

The Company’s credit ratings, however, may not reflect the potential impact on the value of its common stock of risks related to structural, market or other factors discussed in this Form 10-K.

The increasing costs of certain employee and retiree benefits could adversely affect the Company’s results.

Company’s credit ratings, however, may not reflect the potential impact on the value of its common stock of risks related to structural, market or other factors discussed in this Form 10-K.

The increasing costs of certain employee and retiree benefits, and the regulatory treatment of certain benefit plan activity, could adversely affect the Company’s results.

The Company’s earnings and cash flow may be impacted by the amount of income or expense it expends or records for employee benefit plans.

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Increases to the costs of pension, other post-retirement and medical benefits could have an adverse effect on the Company’s financial results.

The Company’s earnings and cash flows may also be impacted by the rate treatment of certain income and expense activity and regulatory asset and liability balances that would be determined in a future rate proceeding.

Significant shareholders or potential shareholders may attempt to effect changes at the Company or acquire control over the Company, which could adversely affect the Company’s results of operations and financial condition.

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Item 1B Unresolved Staff Comments

Item 1C Cybersecurity

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors