Rate cases recover
Recovery lags · financing costs rise
Normal path — rate cases recover capex, cash catches up; the payout stays durable on EPS.
Utility dividend-financing plumbing: EPS-covered payout with negative free cash flow
Operating cash flow
capex — funded first
1
new capex
rate base
rate
case
rate recovery returns cash
3
Debt
bonds issued
Equity
shares issued
financing cost
financing gap
2
4
Dividend pool
to shareholders
EPS-covered
1
Dividend after
heavy capex
OCF-funded
2
Gap financed
debt + equity
on the rate base
3
Rate recovery
cash catches up
payout on EPS
4
Recovery lags
gap widens
leverage
rating headroom
Spire: FCF -$222M, D/E ~202%