ONE Gas, Inc. (OGS): Business Model Canvas [Dec-2025 Updated]

You're looking past the noise to see the actual engine room of a major regulated utility, and honestly, ONE Gas, Inc.'s (OGS) business model is all about predictable infrastructure and regulatory discipline. We've broken down exactly how they operate their distribution network across Kansas, Oklahoma, and Texas, backing up their service to 2.3 million customers with a planned $750 million capital investment in 2025 alone. It all hinges on managing a regulated rate base, which is set to hit about $5.8 billion this year, translating those physical assets into solid, tariff-based revenue streams. Stick around; this canvas shows you the precise levers they pull to keep the gas flowing and the returns steady.

ONE Gas, Inc. (OGS) - Canvas Business Model: Key Partnerships

You're looking to map out the critical external relationships ONE Gas, Inc. (OGS) relies on to deliver its regulated natural gas service across Kansas, Oklahoma, and Texas. These partnerships are foundational to their operations, from getting the gas to your system to getting regulatory sign-off on the cost of service.

State Public Utility Commissions (PUCs) for Rate Approval and Regulation

ONE Gas, Inc. operates as a 100% regulated natural gas distribution utility, meaning state-level Public Utility Commissions (PUCs) are essential partners for setting the rates you and other customers pay. The benefit of new rates is explicitly included in their 2025 earnings guidance, showing the direct financial link to these regulatory bodies. For instance, in 2025, ONE Gas, Inc. saw the impact of regulatory approvals:

• The anticipated average rate base for 2025 is $5.8 billion.
• Oklahoma Natural Gas reached a settlement for a base rate revenue increase of $41.1 million, effective in 2025.
• Kansas Gas Service received approval for a $7.2 million increase effective in August 2025.
• Texas Gas Service secured approved increases totaling $23.6 million ($15.4 million and $8.2 million) effective in June 2025.

These regulatory actions directly impact the top line; operating income for the nine months ended September 30, 2025, reflected an increase of $92.2 million primarily from new rates.

Natural Gas Producers and Pipeline Operators for Supply and Transport

Securing the physical commodity and the means to move it are non-negotiable partnerships. While specific producer contracts aren't detailed, the business model acknowledges the importance of these relationships by noting risks associated with the expiration of existing supply and transportation arrangements. A competitive advantage for ONE Gas, Inc. is that its supply assets are in close proximity to gas reserves, which helps keep transportation, storage, and commodity costs lower. The company serves more than 2.3 million customers across its three divisions in Kansas, Oklahoma, and Texas.

Here's a look at the scale of investment tied to system maintenance and growth, which often involves these upstream and midstream partners:

Construction and Engineering Firms for System Integrity Projects

The substantial capital expenditure budget is largely deployed through external construction and engineering partners to maintain and upgrade the system. The focus on system integrity is a continuous, high-dollar commitment. For the five years ending 2029, capital investments are projected to total approximately $4.0 billion, with annual spending between $750 million to $850 million. This work includes pipeline replacements and extensions to new customers, driven by growth opportunities in Texas and Oklahoma.

Industry Coalitions like ONE Future for Methane Reduction Targets

ONE Gas, Inc. partners with industry groups to meet environmental goals, specifically around methane emissions. The company is a founding member of the Environmental Protection Agency's Methane Challenge Program and participates in ONE Future, a coalition of natural gas companies working to reduce methane emissions intensity.

• ONE Gas has a specific goal to achieve a 55% reduction in Scope 1 emissions from distribution pipeline leaks by 2035, using a 2005 baseline.
• As of December 31, 2022, the company had achieved a 48% reduction against that baseline.
• ONE Gas has consistently exceeded its commitment within ONE Future to replace a minimum of 2% of vintage materials annually since 2016.
• ONE Future's collective target for all members is to achieve a methane intensity of 1% or less by 2025. The coalition reported an intensity of 0.462% based on 2021 data.
• In Oklahoma, the company has regulatory authority to spend up to $5 million annually to purchase Renewable Natural Gas (RNG).

These environmental commitments are integrated into the capital deployment strategy, which is heavily focused on pipeline replacement projects.

ONE Gas, Inc. (OGS) - Canvas Business Model: Key Activities

You're looking at the core engine of ONE Gas, Inc. (OGS) operations as we head into late 2025. The key activities here are all about moving molecules safely and recovering the cost of the massive infrastructure required to do it across Kansas, Oklahoma, and Texas.

The sheer scale of the physical network is the first thing that jumps out. ONE Gas, Inc. operates a vast system that requires constant upkeep. As of the end of 2023, the combined miles across its three divisions looked like this:

To keep this system running and to support growth, the capital deployment is significant. For 2025, ONE Gas, Inc. is executing a major capital investment plan. This spending is heavily weighted toward system health.

• Executing a capital investment plan of approximately $750 million in 2025.
• This $750 million is primarily targeted for system integrity and replacement projects.
• Capital investments for extensions to new customers are expected to be approximately $180 million of the total.
• In 2024, the company replaced over 450 miles of transmission, main, and service lines.

A critical, non-physical activity is ensuring the costs associated with this infrastructure investment are recovered through the regulatory process. You see the results of this filing and managing rate cases across the three states throughout 2025, with several key requests and outcomes:

Finally, safety and system integrity are non-negotiable, and the company tracks its performance here. The focus on system integrity is directly tied to the capital plan. The latest external validation shows this commitment:

• Achieved the 8th consecutive American Gas Association (AGA) safety award for the lowest rate of serious injury as of April 30, 2025.

Finance: draft 13-week cash view by Friday.

ONE Gas, Inc. (OGS) - Canvas Business Model: Key Resources

You're looking at the core assets that power ONE Gas, Inc. (OGS) right now, the things they absolutely need to deliver gas to their customers. These aren't just line items; they are the physical and regulatory foundations of the business.

The most critical physical asset is the massive natural gas distribution network. ONE Gas, Inc. operates as a 100-percent regulated natural gas utility, serving customers across three key states. This infrastructure is what allows them to move the product from the wellhead to the burner tip.

Here's a snapshot of the scale of that distribution footprint as of late 2025:

The regulatory structure provides a stable foundation for asset investment. The anticipated average rate base for 2025 is set at approximately $5.8 billion. This figure represents the value of the assets upon which the utility is allowed to earn a regulated return, which is central to the revenue stream.

To manage supply and demand volatility, especially given the recent focus on winter reliability, ONE Gas, Inc. maintains significant storage assets. The natural gas storage capacity has been increased to approximately 61 Bcf. This represents a +20% increase from pre-Winter Storm Uri levels.

You can't run this kind of system without people who know what they are doing. The experienced workforce is essential for maintaining the physical assets and managing customer interactions. While the exact headcount isn't always public, the scale of recent activity points to a large, active technical team:

• Replaced over 450 miles of transmission, main, and service lines in 2024.
• Added approximately ~24,000 new meter sets on a trailing twelve-month basis as of August 31, 2025.
• Capital investments for system integrity and replacement projects are estimated at approximately $750 million for 2025.

The cost structure reflects this human capital; for instance, employee-related costs increased by $3.8 million in the third quarter of 2025 compared to the prior year period. This team manages the day-to-day operations across the Oklahoma City, Tulsa, Kansas City, Wichita, Topeka, Austin, and El Paso markets.

Finance: draft the 2026 capital expenditure plan based on the projected 2026 rate base of $6.3 billion by Friday.

ONE Gas, Inc. (OGS) - Canvas Business Model: Value Propositions

You're looking at the core promises ONE Gas, Inc. (OGS) makes to its customers and the market, which are heavily backed by capital deployment and operational performance as of late 2025. These aren't just marketing points; they are commitments funded by significant investment dollars.

The foundation of the value proposition is the reliable and safe delivery of natural gas. This isn't abstract; it's measurable. For instance, ONE Gas, Inc. has secured the 8th consecutive AGA safety award for maintaining the lowest rate of serious injury in its peer group. That kind of consistency in safety is a direct value proposition for every customer relying on the system.

Then there's the energy economics. You know that for many uses, especially heating, natural gas remains a powerful value driver. ONE Gas, Inc. is actively working to strengthen its roughly 3:1 affordability advantage over electricity as an energy source, a key selling point in its service territories across Kansas, Oklahoma, and Texas. This competitive pricing helps secure long-term demand.

To ensure this reliability and affordability for the future, the company is pouring capital into its infrastructure. For 2025 alone, ONE Gas, Inc. estimated capital investments, including asset removal costs, to be approximately $750 million, with a significant portion targeted directly at system integrity and replacement projects. To give you context on the scale of this commitment, they replaced over 450 miles of transmission, main, and service lines just in 2024. Looking ahead, the plan for 2026 is even larger, with approximately $800 million budgeted for capital investment.

This investment in system health goes hand-in-hand with supporting growth. The value proposition here is enabling new development. For 2025, capital investments specifically earmarked for extensions to new customers were projected to be around $180 million, driven by opportunities in Texas and Oklahoma. This supports the ongoing expansion of service to the approximately 2.3 million customers the utility serves. The growth momentum is real; as of April 30, 2025, the company recorded approximately 24,000 new meter sets on a trailing twelve-month basis.

Here's a quick snapshot of the key financial and operational metrics underpinning these value propositions:

You can see the focus is dual: maintaining the existing, safe system while actively building out capacity for new demand. The regulated nature of the business means that these capital expenditures are generally recoverable through the rate base, which itself is projected to see average annual growth of 7% to 9% through 2029. This regulatory framework helps ensure the company can fund these value-delivering investments.

The concrete ways ONE Gas, Inc. delivers on its promises include:

• Achieving the 8th consecutive AGA safety award.
• Targeting $750 million in 2025 capital for system integrity.
• Investing $180 million in 2025 for service extensions.
• Serving approximately 2.3 million customers across three states.

Finance: draft 13-week cash view by Friday.

ONE Gas, Inc. (OGS) - Canvas Business Model: Customer Relationships

You're running a regulated utility, so your customer relationship is fundamentally different from a competitive business; it's about mandated service and regulatory compliance. That's the reality for ONE Gas, Inc. (OGS).

Regulated service agreements with minimal direct competition

ONE Gas, Inc. operates as a 100-percent regulated natural gas utility, which means the relationship is defined by service territory exclusivity rather than market share battles. The company serves more than 2.3 million customers across Kansas, Oklahoma, and Texas. This translates to market dominance in key areas: the largest gas distributor in Kansas and Oklahoma, and the third largest in Texas by customer count. The stability of this relationship is underpinned by the regulated structure, which allows for cost recovery through approved rates.

The scale of the customer base and the nature of the service mean customer interaction is constant, even if the competitive pressure is low. Here's a snapshot of the operational scale:

Dedicated customer service centers for billing and outage support

The day-to-day relationship hinges on reliable service delivery, especially during emergencies. While specific call center statistics aren't public in the same way as financial guidance, the operational focus is clear: maintaining service quality across its divisions-Kansas Gas Service, Oklahoma Natural Gas, and Texas Gas Service. The company's commitment to system integrity, with planned capital investments of approximately $800 million in 2026, directly supports the reliability customers expect for billing and outage support.

Public and regulatory engagement for rate case transparency

Transparency with regulators and the public is key to maintaining the regulated agreement. ONE Gas, Inc. actively engages in rate case filings to ensure timely recovery of capital investments, which supports growth and system safety. You see this engagement through several filings in 2025:

• Oklahoma Natural Gas filed for a $41.5 million adjustment in February 2025.
• Kansas Gas Service secured a $7.2 million increase approved in July 2025.
• Texas Gas Service had GRIP filings approved in May 2025, totaling $23.6 million ($15.4 million + $8.2 million).
• A partial settlement in the Texas rate case on November 19, 2025, resulted in a $15 million revenue increase.
• Texas Gas Service also filed a larger rate case in June 2025 requesting a $41.1 million revenue increase.

The next full rate case is scheduled for Oklahoma in 2027. This cadence of filings is how the company manages the customer relationship within the regulatory framework.

Community giving and corporate responsibility programs

Beyond the meter, ONE Gas, Inc. manages its relationship through corporate citizenship. The latest reported figures show a strong commitment to the communities it serves:

• Community giving totaled $3.3 million in 2024.
• Employees, retirees, and families contributed over 10,000 volunteer hours in 2024.
• The company has achieved an 8th consecutive year of American Gas Association safety recognition.

On the environmental side, which impacts community perception, ONE Gas reduced Scope 1 emissions by 51%, keeping it on track for its 2035 goal of a 55% reduction. That's a tangible commitment to the local environment.

Finance: draft 13-week cash view by Friday.

ONE Gas, Inc. (OGS) - Canvas Business Model: Channels

You're looking at how ONE Gas, Inc. (OGS) physically and digitally connects with the people who need their natural gas service. For a regulated utility, the channel strategy is all about reliable infrastructure and accessible customer touchpoints. It's a mix of old-school pipes and wires and modern digital tools.

The core of the channel is the physical delivery system, which directly serves over 2.3 million customers across three distinct, regulated utility divisions. This scale means the field service teams are constantly active, managing maintenance, new installations, and, critically, emergency response across vast territories in Kansas, Oklahoma, and Texas. The company is actively investing in this physical channel; for 2025, capital investments for extensions to new customers are estimated to be approximately $180 million, supporting the growth you see in their service area.

The growth in the customer base is measurable, too. As of the Trailing Twelve Months (TTM) ending August 31, 2025, ONE Gas, Inc. added approximately 24,000 new meter sets, showing the physical channel is expanding to meet demand driven by manufacturing projects and general economic development in their key markets.

Here's a quick look at how those customers are segmented across the regulated utility channels:

Beyond the physical pipes, the digital channels are essential for customer interaction and efficiency. While I don't have the exact active user count for late 2025, the focus on digital self-service is clear, especially given the operational context. The company is driving customers toward its online portals and mobile apps for routine tasks.

These digital channels are used for:

• Processing billing payments.
• Managing service requests and inquiries.
• Accessing account information.

The field service teams represent the final, crucial channel for direct interaction. These teams are the boots on the ground, responsible for system integrity projects-they replaced over 450 miles of transmission, main, and service lines in 2024 alone-along with all new installations and critical emergency response across the service territory. This physical presence is backed by the overall 2025 capital investment estimate of approximately $750 million, much of which flows into maintaining and extending these service channels.

The success of these channels directly impacts the financial results you're tracking; for instance, year-to-date 2025 net income reached $177.9 million, and the narrowed 2025 diluted EPS guidance sits between $4.34 to $4.40, reflecting the stability derived from these regulated service delivery methods. Finance: draft 13-week cash view by Friday.

ONE Gas, Inc. (OGS) - Canvas Business Model: Customer Segments

ONE Gas, Inc. provides natural gas distribution services to approximately 2.3 million customers across its service territories in Kansas, Oklahoma, and Texas.

The customer base is segmented into several distinct groups, with residential customers representing the largest segment by count.

The company's largest natural gas distribution markets, which host a significant portion of these residential customers, are concentrated in major metro areas:

• Oklahoma City and Tulsa, Oklahoma
• Kansas City, Wichita, and Topeka, Kansas
• Austin and El Paso, Texas

The company also serves commercial and industrial businesses that depend on a reliable gas supply for their operations. Furthermore, ONE Gas, Inc. supports wholesale and transportation customers, which is evidenced by the 2024 delivered volumes: 221,032 MMcf was delivered in transportation volumes, compared to 143,164 MMcf in sales volumes for that year.

Growth in the customer base is an ongoing focus, with 23,000 new customer connections added in the 2024 fiscal year. For the first quarter of 2025, the company reported approximately 5,600 new connections. The growth in residential sales in the second quarter of 2025 was due primarily to net customer growth in Oklahoma and Texas.

The geographic concentration of the customer base within the operating divisions highlights market penetration:

The high-growth markets, specifically Oklahoma City, Tulsa, Austin, and El Paso, are key areas for capital investment targeted at extending service to new customers, with capital investments for extensions expected to be approximately $180 million for 2025.

ONE Gas, Inc. (OGS) - Canvas Business Model: Cost Structure

You're looking at the core costs that fuel ONE Gas, Inc. (OGS)'s regulated utility operations as of late 2025. For a capital-intensive business like this, the cost structure is dominated by maintaining and expanding the physical network that delivers natural gas to its customers.

High capital expenditures (CapEx) for system integrity and replacement represent a massive, non-negotiable cost. This spending is crucial for safety, reliability, and meeting regulatory requirements. The company has a clear, multi-year plan backing this up. For the full year 2025, ONE Gas, Inc. (OGS) still expects capital expenditures and asset removal costs to be approximately $750 million. This is slightly lower than the $762.1 million spent in the full year 2024. For the first nine months of 2025, the actual spend on capital expenditures and asset removal costs reached $575.4 million.

The cost structure is also heavily influenced by ongoing operating expenses, which cover the day-to-day running of the business. For the third quarter of 2025, total operating expenses were reported at $237.1 million. A significant portion of this relates to the workforce and local taxation.

Here's a breakdown of key operating cost movements year-to-date through September 30, 2025, compared to the prior year:

• Increase in employee-related costs: $12.8 million.
• Increase in ad valorem taxes: $13.8 million.

To give you a sense of the scale, for the full year 2024, the increase in employee-related costs was $22.9 million, and the increase in ad valorem taxes was $6.9 million.

Depreciation and amortization expense directly reflects the massive capital investments made over time. This non-cash charge is a significant cost component. For the nine months ended September 30, 2025, the increase in depreciation and amortization expense was $16.8 million, primarily driven by additional capital investment. Just for the third quarter of 2025, this expense increased by $4.8 million compared to Q3 2024.

Finally, servicing the debt used to fund this infrastructure is a major cash outflow. Interest expense on debt financing is a predictable, though variable, cost. For the third quarter of 2025, ONE Gas, Inc. (OGS) incurred net interest expenses of $35.4 million. As of September 30, 2025, the total long-term debt (excluding current maturities) stood at $2.36 billion, down from $2.39 billion at the end of 2024. The company anticipates total net long-term financing needs of approximately $1.5 billion for the period 2025 through 2029.

You can see the relative scale of some of these costs based on the latest reported quarter and year-to-date figures:

Finance: draft 13-week cash view by Friday.

ONE Gas, Inc. (OGS) - Canvas Business Model: Revenue Streams

The revenue generation for ONE Gas, Inc. is fundamentally tied to its status as a regulated natural gas distribution utility, which means its pricing structure is not set purely by market forces but by regulatory approval. This forms the bedrock of its revenue streams.

The primary source is Regulated base rates and tariffs approved by state commissions across its operating territories in Oklahoma, Kansas, and Texas. This regulated structure, coupled with more than 92% of its customer base being residential, offers strong visibility into future earnings.

A significant driver of recent financial performance has been the successful implementation of rate adjustments. Revenue from new rates provided an increase of approximately $92.2 million year-to-date for the nine months ended September 30, 2025, when looking at operating income. This year-to-date figure is composed of several regulatory actions across the service territories.

ONE Gas, Inc. utilizes specific regulatory mechanisms to ensure the timely recovery of its capital investments and support ongoing growth. These include:

• Performance-Based Rate Change (PBRC) mechanism in Oklahoma.
• Gas System Reliability Surcharge (GSRS) in Kansas.
• Gas Reliability Infrastructure Program (GRIP) in Texas.

Specifically regarding regulatory filings in 2025, you can see the magnitude of these rate-based revenue adjustments:

Sales revenue is also generated from customer activity, particularly in its key growth areas. The company expected capital investments for extensions to new customers, supporting this growth, to be approximately $180 million in 2025. The impact of this customer growth is visible in the year-to-date operating income figures. For the nine months ended September 30, 2025, residential sales revenue, due primarily to net customer growth in Oklahoma and Texas, contributed an additional $5.3 million to operating income. The third quarter alone saw an increase of $1.4 million from this same driver.

To give you a snapshot of the top-line revenue figures reflecting these streams as of late 2025:

You should note that while the year-to-date operating income increase from new rates was $92.2 million, the third-quarter operating income increase from new rates specifically was $19.2 million. This shows the staggered impact of regulatory approvals throughout the year.