Chesapeake Utilities Corporation CPK announced that it has entered into a partnership with CleanBay Renewables Inc. (CleanBay) to provide clean energy forcustomers. This agreement will offer the company an opportunity to bring more renewable natural gas to its Delmarva operations.
Insight Into the Arrangement
Per the arrangement, the renewable natural gas produced at CleanBay's planned Westover, MD bio-refinery will be transferred to the market with the help of Chesapeake Utilities and its subsidiaries Eastern Shore Natural Gas Company (ESNG) and Marlin Gas Services.
Using a virtual pipeline concept, Marlin Gas will transport renewable natural gas from the CleanBay facility to ESNG, Chesapeake Utilities’ interstate infrastructure pipeline, from where it will be circulated to end users including the low-carbon, renewable vehicle fuel customers.
According to CleanBay’s executive chairman, the process by which poultry litter is turned into renewable natural gas is a sustainable and environmentally-friendly. This will positively impact the region's poultry ecosystem and also reduce U.S. greenhouse gas emissions for end-users including powering vehicle fleets with clean, green energy. Moreover, this deal is in line with the company’s strategic vision of providing its customers with eco-friendly and diverse energy.
CleanBay's Westover infrastructure will recycle more than 150,000 tons of chicken litter annually and likely generate 765,000 MMBTUs of sustainable renewable natural gas, which can meet the needs of nearly 10,000 homes. Also, the clean energy produced at each facility will lower 550,000 tons of greenhouse gas emission equivalents on an annual basis.
With increasing awareness to trim toxic emissions globally, companies are adopting clean energy sources to provide an environmentally-friendly resource to its end users. Adhering to this, Chesapeake Utilities and its units are set on a mission to produce clean, affordable and reliable energy throughout its infrastructure.
Zacks Rank & Price Performance
Currently, the stock carries a Zacks Rank #3 (Hold). Shares of the company have lost 9.2% in the past six months compared with the industry’s decline of 30.7%.
Stocks to Consider
A few better-ranked stocks are Atmos Energy Corporation ATO, Southwest Gas Corporation SWX and Sempra Energy SRE, all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Atmos Energy’s fiscal 2020 earnings has moved 0.21% north over the past 60 days. It’slong-term (three-five years) earnings are expected to grow at 7.20%.
The long-term earnings growth rate for Southwest Gasis pegged at 6%. The Zacks Consensus Estimate for 2020 earnings has remained unchanged over the past 60 days.
SempraEnergy’s long-term earnings growth rate is 7.18%. It has a trailing four-quarter positive earnings surprise of 11.05%, on average.
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