Essential Utilities (WTRG) 26 Feb 212020 Q4 Earnings call transcript

Good day, everyone, and welcome to the Essential Utilities Incorporated Full Year 2020 Earnings Call. Today's call is being recorded. At this time, I would like to turn the conference over to Brian Dingerdissen. Please go ahead, sir.

Thank you, Christy. thank Year joining Earnings and Utilities for everyone, Full XXXX Call. morning, you us for Essential Good I'm Brian Dingerdissen, Head of Vice President, Chief Relations. of Investor Staff and

If be Relations also our section the our website. event copy find receive can that be by the of you website. we webcast slides you this will it Investor on release, and can of the visiting The did not referencing found press a of

Here is forward-looking our statement.

call of a that expressed As different forward-looking matters XX-K actual the may a Please other this uncertainties factors include future or filings that during other and results uncertainties. of some statements. XX-Q, forward-looking may and SEC refer risks, involve results description reminder, risks such from any materially statements such our discussed to recent the for implied to and be cause most

may at of financial is to After course included call, our measures. this the call also website. of we open for Investor Relations reconciliation the in the the GAAP of A non-GAAP section questions. will During made non-GAAP of the presentation the these reference presentation, to and formal certain measures end financial be

for CEO, on XXXX, Chris start today. call our Chairman municipal acquisition company Franklin, our including and Here's We'll our agenda who our a the provide in will with update successes program.

review like over year Next, With open Dan a Schuller, guidance. conclusion, Chris Chris I the that, to our results. financial full then call turn call fourth will will the the discuss and our questions. we with of Franklin. CFO, At quarter for conclude presentation would to our will the

us good today. and morning, for Brian, everyone. joining Thanks, Thanks

it's in so us of of bitter-cold really Let start been this me of cities. operation, tale impact terms And winter in experienced weather in impact many two that the And our the Texas. of with a on discussion start of February. the

on some for water without our to and electric were and hearts it impacted service, pumps those wastewater frigid our last systems systems to week. plants. out were Water temperatures, highly living operate days and First, power dependent go our particularly and who are

when So well our went as systems in of many Texas, well. the community went power down out

approximately In the Texas due fact, or blackouts which we our we impacted, customers to had at peak brownouts. largely of is those winter two-thirds weather, of rolling the heard

As bottle and as themselves to as to customers. personal resources restore we We supplement with that they I'd have also hardships we've the dedicated marshal again around and workforce. bring go to once our activated we supplies possible. to resulting about We other service command in incident from back But customers – to were water, our state went brought think the quickly like to employees, back teams working out dealing we equipment the as from now too. were service the brought supplement operations ground always contractors repair and to what in thank power as down, then And Texas. rolling customers those worked system through. then necessary had We materials our service went with clock to to them to employees and restore they quickly the our Texas storm like it. our the restored to

under restored, and working boiled in that, we only quickly nearly impacted have left we're one this to I'm still we to point, there can service as say at proud well. systems as While as we some water have advisories system restore Texas, all

Texas. gas natural that, customers Just to have we remind in don't you

And financial and so to or impacts operational Kentucky there no Virginia. in gas our natural customers, are Pennsylvania, were which West

water winter, we And a Mid-Atlantic, tale are, our Pennsylvania, news where had in despite few a the the even few where of saw the the of numbers two have of and benefit cold for main of that this impact of seeing we're months extreme the We the last breaks. investment nearly difficult last been winter temperatures majority low over really mentioned that now. in we I the to weeks during see replacing fairly was mains even. years cities. XX particularly very It's operations Now, good impressive weather here

we disruptions As have a result, we and fewer previous than less overtime in years. service had

the can the see you is All in right. by real benefit there As on infrastructure. chart right investing to here,

of in serve of million was XXXX XXXX, some This highlights. of company. the during a take which quarter adjusted million by record will the about before invested you infrastructure we invested up peoples talk we $XXX income around $X.XX We details the company. per about the for more financial we the own Let's was share basis, is for On first year, our spending X.X%. when in $XX.X Dan through communities capital in amount results. again once that a present non-GAAP the

by the purchase growth, Our organic municipal increased finally and signed base $XXX price. base X.X year. customer its X.X%, acquisition in in good strategy water All right. customers agreements with remains X with with across the year totaling coupled and pending segments, wastewater million million increased rate nearly by very strong and billion base municipal X% rate its company ending And our closing, X regulated

execution We've see for objectives. can primary before themes about comprehensive XXXX. you On this. with XXXX more were talked slide a summary X our These the the of next here, the set we you of

You dedication And focused X challenges company. effects of of Throughout the years saw investor in in providing people, the we mission water customers. event. of historic year, of still remain combined objectives pandemic. through of to to essential our And our natural the resources overcome new on one XXXX, of and delivered gas our we these our most all of the our the on the and resiliency adapted business we despite a

infrastructure customers investment, improvement record reliable our safe us drove that I As our and executing service. commitment to mentioned, ensuring to had a

we will report to adopt that Now we have platform. continue to confident of we pleased X-year the practices anniversary as from and we employees work approach best our the across I'm closing Peoples successfully to of our both feel the utilities integrated customers and I invaluable the transaction, to reminder Campbell The utilities beyond. for the in and as acquisitions X closed team's XXXX segment. our System. will include our our of a water expertise we and continue that here's water regulated municipal footprint And Water acquisitions integration prove acquire experience across

customers Wood North customers Knowles. by You've XXXX. and base nearly Doug seen over company that Pennsylvania; increased added Together, rate East organic the in Pennsylvania; XX,XXX million Wastewater growth, customer system one in in acquisitions small and called with that's $XX base. its wastewater Norriton Rockwell and Combined these wastewater one XX,XXX over Garden, before that's Illinois; in water Ohio; New in Utilities, in Carolina a in

to to at annual great earning. communities family. think Based and signed examples these agreements of X along this. rate of acquisition join about Here acquisitions incremental It's or which strategy presentation about work, they're on equivalents are on that And to million month, that and guidance event, when base in just when closing. been approximate the are signed XXX,XXX announced of forward at these fully serving add $XXX $XX updated having addition you have generate close it this we Pennsylvania, we slide, income are last closed. see other we now The of important Township will look expected our since them transaction the have can with and we million, pending customer our these Willistown customers the municipal the to Essential

DELCORA is sure you from when about never Essential. from not minds, far I'm Aqua Now our yours, and and think

bring Let's you up to date.

county common the received favorable for Delaware in law had reasons, PUC Pennsylvania we right? please court reason that first from appealed in late December administrative ruling that subsequently, be and X that The recall a the will we municipal lawsuit January, judge was, with interveners. And we some recommended decision very a outstanding transaction judge in You'll the denied County.

application. was, Second reason that with the stabilization And litigation felt rate plan a didn't the county. one ongoing include the we was our third they in

So, since have remaining the in to several We've interveners these municipal these the issues. made constructive and progress from recommendation, interveners. the ALJ conversations And trying are municipal they withdrawn that on been address we case. situations, measures on plan. before already about that a stabilization the good rate optimistic we rules with remedy Utility taken in the And significant have issued Commission hopeful well. as argument, have also that feel to Public issue the progress also don't withdraw we the will we And process. the Pennsylvania We've

Pennsylvania render scheduled PUC expected regularly their the Now, to is decision one two March. at public in of meetings

stay Dan, tuned. we'll over you. turn that, it So to I'll With

everyone. morning, Thanks, and good Chris,

start to go contributed the maintenance to $XXX.X increased operations last a of We $XXX $XX.X also $XX.X primarily highlights. year, income Peoples Net Again, review $XX.X $XX.X million million million of million The million, GAAP fourth from utility $XX.X increased the And few million increase. And of compared from this includes of that result provided $XXX up $X.XX. last $X.XX and to income increased PUC Pennsylvania up to This natural the $XXX income had incurred to year. was minutes of we approval revenues let's as was million natural quarter by quarter. to the taking from includes $X.XX up of the million. year. in gas Adjusted share O&M rate year. $XXX.X million, figure business addition expenses the full $XXX.X of impact costs of per last million. natural million. EPS quarter of $X.XX fourth gas it a Before And $XX.X to customers from to gas adjusted to million fourth the gas in revenue the from in as was quarter in purchased up credits condition million acquisition. the $XXX.X a from

the discuss financial let's full Next, highlights. year

year our natural end increased We'll customers $X.XX. million. acquisition. over expenses. the year. noted gas show a by we the addition result for $XXX.X million to pandemic. was XX.X% increased discuss transaction-related maintenance And O&M contributed and adding to income from million. million waterfall. revenue rate natural of And credits year up or up excludes of a gas XX.X% business and XX%. billion and that this which of We water Pennsylvania or our as of million X.X% objectives to of Chris approval strong $XXX.X approximately year, the adjusted light XX.X% to first $XXX quarter Adjusted operations $X.XX achieved top a primarily overachieved earlier, natural sorry, from GAAP ended X.X% $X.XX range. from forma condition million the rate issued revenue we utility for adjustment up was last pro to to from one the $X.XX $XXX.X the -- with very was of per was $XXX.X to customers, This XXXX of million in the income $XXX.X O&M in growth. As by issued $XXX.X adjusting results. up Adjusted utility million was gas was approximately credits the when PUC million revenue, the guidance billion, Net $X.XX up $XX The from financial year-over-year, $X.XX, Peoples After it further, gas income EPS the for normalized $XXX.X $X.XX was expenses, the share of

As a contributed about think we or in incremental water noted a us as earnings usage strong XXXX. in guidance growth. for so, our normalized future call, earnings $X.XX baseline It got

costs $XXX.X to the increased on Next, $XX.X million to $XXX million gas $XXX.X or GAAP our a by volumes. gas revenue with natural the the through volume credits due natural gas towards surcharges, rate from XX.X% The segment. and in of which increased an details reflects XXXX, includes related increase, which revenue. following of water let's segment million walk regulated of $XX.X revenues million of starting volume waterfall impact In rate basis, of increase customers. million was This utility the $XX.X slides, and offset to credits figure and our water wastewater consumption $X.X additional and was those issued provided the to growth both then million Rates water customers. million

other In on we to the Let's what went because, we however, situation when to continue the usage about the exactly frankly, slide. up we see We've which the declines COVID since was strong fourth the review expect offsetting down X.X%, last X.X%, quarter, water next usage, was know classes. overall consumption into started didn't in consumption customer residential March. been talking

we This for we the close people of in than declines working industrial XXXX X% with X% to home more that and business, more XXXX versus with increased about saw full year. COVID-XX versus offset commercial customer our As water review the residential and classes, prior year, weather. consider and favorable from both consumption on declining the impact the increase

X.X%. usage So, overall, for up was year, the

Peoples the talk gas usage weather business. let's little a and Next, for about

reminder, heat a number degree average day's XX building. measurement It's the a a to of degrees is temperature As below demand heating energy a day to designed that a quantify for Fahrenheit. a is degrees needed

XXXX normal actual Pennsylvania see can chart and of distributed residential The out on the in the Peoples January February This started the own through winter first our to was you Gas, winter, business. includes XX% XXXX And days through the heating when chart Peoples year-to-date adjusted normalized warm seasons. Natural As February. recall quarter. through right the February year, income days we is cold degree throughout be for based Really the left, on for X.X% where relatively XX. XXXX, the first was about on in mild weather weather compares year-to-date consumption warmer with was shows do below on those weather to fourth didn't quarters normalized last XX and XX% normal. of projected in This a first sold than gas that the February favorably gas colder-than-normal, in year. But the right, how year's

offset a COVID-related Next, of increase O&M include Peoples’ other in let's segment, Other Look and of the number normal were employee-related O&M $XXX.X you reason O&M at contributing on items. which including drivers waterfall; expenses. for the is employee primarily of COVID-related the growth costs, the expenses our then will expenses for reflect move primary for costs, that the which see in savings one-time year. by addition million water to costs,

volume including per XXXX. together an earnings costs the year. XXXX the $X.XX we'll transaction Peoples-related and spend adding and for pro last as items, other as the effect and which you on $X.XX. back to was tax surcharges for the per almost Continuing These basis GAAP XXXX dilutive year of on rates over $X.XX contributed us that Pennsylvania to Bridging notice offset Peoples, waterfall. GAAP brought relative between added will adjustment full increased time $X.XX income and figures $X.XX, share adjusted share some EPS Next, and equity repair from as segment to the XXXX, adjusted the benefits by and the from interest, amortization offering, by in Aqua expenses, such water decreased right, followed the forma depreciation, regulated then well were growth, $X.XX by

then per and Continuing previously, the $X.XX from adjusted approximately the Peoples Peoples for right, then the transaction share costs results to for almost in $X.XX the of GAAP pro-forma income resulting impacted $X.XX mentioned $X.XX rate in the by discussed negatively earnings this credits we So basis full year on related at beginning. a $X.XX share per the that for we adjustment, XXXX. to $X.XX is right

customers expect on we the stay tax the to the of filing. tax on the a benefits cadence. related and case, to out filing frame. give This the gas to time the normal an we'll outcome catch-up reached the with by proposed, in on the ALJ have getting back in than should an want I and earnings. positions, next a order a we'll over to natural XX. review benefits, a using file repair with adjustment repair PUC, a to of our originally Rather our the parties not verbal in Before more quarter. take to a we’re agreement After portion credit form call second settlement on case the longer rate catch-up deduction the impact as update Consistent PUC five-year on party's back March moment provide Peoples tax a Recently, Chris, the we key settlement issues a the

the that, at statutory as to go is as like over process, about However, call and this back priorities line the turn And being can XXXX With time we this point. our Chris proceeding. guidance. respectful detail into really this much there's about speak of for no to to I'd

I slide. won't Schuller. in to that Dan unflappable, Well the it's The to earlier. a but deck. done. slide an passed important over skipped I I go slide, back you

systems over nice, total You've than that that out and point in we customers. seen it. Other XXX,XXX discussions have current strong with all we're to pipeline, a

very in that main remain that a And business very, feel the pipeline. we about So that we will confident fair acquisitions. municipal market eight continue where states to fact the of healthy -- still value do driver we we pipeline acquisitions have good be of

me back And so the let come now proper to slide.

excellence remain in of ingrained operational priorities, XXXX saw Essential. at Our these history operational priorities. And growth culture. and focused to and look XXXX. this very so that let's it's at year, ensuring take the emphasis intend We a part on integration, quality similar to I'd service we They're is our our tell excellence you XXXX. in what on

we'll remain join once each on us and work our the to so We'll new the same the from in of our initiatives acquisitions instill values that we'll our integrated. earlier capital improves ESG do And on that those focused program experience, colleagues we announced strong year. to they're continue in we that that continuously build customer

guidance shown about be of is This $X.XX just we've to share. already. a to expected is $X.XX slide now. per income talk what Let's reminder Adjusted you

About Our on never nearly to exceeds be by X% gas lastly, we gas. expected X% baseline, capital agree, using you X% ensure ESG XXXX, entire our aggressive in XXXX would XX throughout as growth think our continue for footprint, is segment. XX to now years. parts spending reminded that XXX-year this our plans Exchange work targets, I finally, X% New to to including as and rate be X% for Customer achievable, York water on water, our to a company XX% on Stock yet XX% to of infrastructure been our as XXXX. $X for reduction about said -- approach between regulated and for is per that average and greenhouse between year one-year Essential PFAS. expected include in of base and regulated we're anniversary billion $X has XXXX, we'll growth billion our now old we the our trillion Utilities, emissions water And And

environment. to natural to strong play our we're affordable positioned in our while dedicated to remains and believe of leader essential in responsibility challenges the recognizing and solving and industry gas resources our critical to infrastructure role a natural well our company rates providing to we Our and an keep wastewater protecting country's mission customers, be water,

are that So we remarks, our from and concludes formal here. questions to happy take

you. from Goldman is have first [Operator Kim Sachs. today from The Instructions] question Insoo we Thank

line open. is Your

you. thank Hey,

Hey, Insoo.

Hey, like of New good when morning. we Day Analyst last for It does ago met year. last seem in the ages York

while. It’s

It recovery But business just like rate water I and definitely water base feels that or of all Texas on and question a incurred process regulatory My base. bit a detail Texas. is through of that. is X% know couple of were while. first more give about the with your for total regarding could costs of of the of rate type past weeks little you the the sale

Sure. Yes.

in think really at looking the an all from I and had brought ability of our did pallets people team communities the was you brought group, And job. operations across purse water exemplary the where well. to purchasing We had we equipment platform. and generators bottle fuel and our in it from moving, as teams recover, can

thought given ice else. exemplary, the everything response conditions roads and was the the of circumstances the closure So of and I

job that confident very nice very, did feel there. a So we

cost capture. will I we these would always the cost, as we're typically summer of These used terms We a hurricanes call recover – costs. of others. storms, do to did in capturing to not material costs and result Now things

weren't expect for us. we'll on delinquency about bills, Texas our for that in this there – not major So late either. our we down unusual soon. turn shut while terms wouldn't And getting phone back We impact on a a so that calls they of in customers is

material And let as a so his don't pass expect here I get there impact, well. to to me to be but Dan opinion

Yes.

think you revenue. And a think, Texas right in then to sense I a has just month of of it, you're give about Chris, million $X.X on.

these started on lose we using a or overtime and not few for repair And less Essential customers like and days Chris them we'll just hurricanes we are so just be in if So aggregating forth costs, material we the water. business. out because impact And the are or added, costs past. they there to it's have non-capitalized as expenses bottled overall look recover you a water,

that. really winterized It Just really being of thing power. about about system was not The wasn't impact one last to to add all. lack our

we And when the lines houses so some didn't the but cold down. go snap, did pump we major have or wells went down main have breaks,

And Yes. think to to and that, thing such. we warehouses as add powering those one too, about Chris, maybe

other but got of contracted one power systems in local all our power and with for we've get so regulated power of the wholesale the from major And Texas then in majority covers cooper is place just that under players authorities, systems rates.

things very see you peak-type with been we've electric the from bills, when insulated those news electric on prices. high So

costs feel material, I Got it. meet weather And you midpoint this guidance? that if guess the the you're the XXXX of that weren't that, saying about think and still guidance able when we and to

correct. That's

Yes.

it. Got

question broader more to sticking Texas. one Just then

or Just increased opportunity I all do increased does it were this that focus a potentially CapEx standpoint, I of outages. out your issues you that of think electrical in But state there? you our an footprint because an given just of from present the lot acknowledge, on think – to this, of happened the expanding

not that then sits typically saying, them that ready? how and it's that for and system. and them keep was I question But storms to you're question more I have to series But is The that there Only generators, going here before approach a prescription sure move huge a a have thing. regulator of want approach. think never good Carolina, how and of it this, a and we do go the a we generators. well systems even an get And a to like Texas, really standby We you position when zones safe the do think much state own more spend event one generator we'll I'm say and purchase to throughout is that between natural we that's should that either. there's certainly North its don't like you regional consideration. used. like have storm well But a percentage you The we you an Well, sort of the could Virginia. generators many per community make key there, regionalize in argument rub seems time those,

And put then so category, capital there we'll I that the were think capital in are spending I and those. pursue prior opportunities the escada ongoing our storm And there, of is even house already we ability is remotely which to in is you some that it. operate that or progress. down sense well to cases control when a But in work Where, out power. was

so capital spending that we'll addition. in be be And that will

Thank it. so much. Got you

You bet.

– to go we'll next, to Ryan Connors we'll one just next, Scattergood. moment. from go and Boenning And And sorry,

is open. Your line

Ryan. Hey,

Texas, broader terms Thanks of of there's is situation Good ask I of sort hadn't talk there more the and with this intended just forth. my how so on for but in since less about indicative topic, taking about grid a being of a morning. problem questions. you're to reliable reliability, bigger picture, the lot renewables

states are happen something that have to impact? that stream, any might if like be other other earnings you the at your material look states where there So, do any vulnerability could you an that

be storm PJM happen, a as you to today. aware it's years and say, one once largely have the issues before, revisit good think or you of Dan, okay, things to We're then question. time say, what -- and never I'm should not not something in that else these my a good initial It's add thoughts. in that? and XXX I prepared Yes. we about I'm a here, of for. about But in be this ERCOT. to could thinking year -- say that But if you the and up to do that's XXX think going

have an producers think, And power to or firm believe to a someone have weatherize those would regulate pipelines producers really needed, who generate Ryan, didn't Most their that tier who ERCOT ability led to is that producers capacity show didn't equipment, of up when that power their to right? order winterize hold on in I Yes. It's don't market, the problems. deliver the is thought but was in power ensure they and power, energy ERCOT, to market. different I power. power to

different got So to PJM we've to order that capacity very market. but regard, bid into have in in is that the pipeline

the is So ERCOT different. from we to it allow do outside doesn't And any interconnect to you in degree as of know, power have think really ERCOT.

problem unfortunately, they it have if a when there, gets So it's entrenched, you will.

Got it. Got it.

Okay.

DELCORA, on Chris, drill wonder down you a little Now comments. to wanted if I just your could for on bit, us

that one how that of we exactly the of just Can rate on was one you took and fund, mentioned particular on stabilization the is of in let the us issue that You issues what with sort issues there know, you're adverse issue? and raised getting just that they proposed ruling. them conceptually, board more comfortable

and base facility call, the comes but it. right? the used But do in it it the us, way bill, way come is into That volume to in going dollars the lot for I'm that then from on and offset a has to it do out total, to in go That, So more easiest bill, simplest was it then on the trust. Yes. a detail. things customer's so And the to the to happy say, these credit just subtract much to charge. the net a would total. the oversimplify to putting of you do the to I'm with customer have

some not to the think do this back cat. -- But customers. not that those happen the to point. dollars advocates that the there the to listen, is rate ways lot are believe trust the there's there's We technically, most other a it. I that to at in certainly, efficient the be to willing concede who of stabilization tariff, skin to ways the give think way it on was that, bill. should The think of because we're And I

so it remove see. the we've think addressed And now proposed to We'll bill. I issue. And from the we've

as not I'm -- that's it because take oversimplified can glad as Okay. it's complex I you down.

the seems last But than fifth a -- thing that That like have on seat on Now I case? it don't driving what's forth. guess -- Is longer maybe that? else. assume that now, seems seems that the there? PUC, there looming any was And on seat I vacated. anyone than I mean that what's -- year decision you one on with necessarily thing that's I on the coming since color baseball with that to so a But COVID on inside up me any that usual. seat? know open time and like going the

listen, else. Yes. individual an and the has the commissioners has over same approve in But did Republican is the is a like the governor not senate the twice the observer the in twice Democrat public name name Republican decided and to that Pennsylvania, center, I'm PUC so governor approve to Senate I that He's mean, now. everybody over. send

And as so, And commission votes stalemate. there from Ryan, here I know the have -- of a watch been you how been that vote. it's a plenty bit two-two know, Pennsylvania; you close a of in have

situation. a And it's so difficult

month coming think on I and it's I seat the I And here Commissioner So his also that in know the of up well. next governor. mind know as is the Sweet,

to Senate. see haven't heard staying you potentially need to have have we'll that two or come develops. retire. But names over we'll now Sweet is Commissioner I have that the to then he formally whether So seats. two will whether how But

the between will a Democratic So Ryan, I'd that, Republican deal be Senate in and Governor. of all assume there

lastly, you in, Okay. Obviously, I could quarter. to gas really And on assume sequential that's that then going one you This us Yeah, be in Dan. out there. sneak based gas fourth weather, is, had ramp costs more. I if watch could for a ramped the big more help guess, But novices the another you if pretty we'll bit. little I one. purchased

You've over guidance, on help jumps move about just it the like seasonality that given can the annual seems you quarter? but all the that us how to on think line, It we as out first really the into place.

Yeah.

go income you and those that seasonality again showed approximate had Day at in quarter we degree need what really is before you terms of there and do gas we ranges Analyst the gives those, now, see the you'll some what But of, we usage. also kind think usage a potentially and used the percentages, at quarters, I and course, presentation, water for quarterize. to of we to to then in on to these because net back the by what's XX, showed quarters, point Day, page it an each what showed usage Analyst help for breakdown to is probably the we guide are shown least you is, in

it's manifests the the So -- over mentioned, I ability time, net we'll today's I like. see way that to slide all to what in of said the to appendix start mix the should too, Analyst think income as quarterly have we able itself as in refine we I that actually as Day presentation That well. this at be financials, the for look

Okay, good. Thanks guys. again

Thanks, Take care. Ryan. Yeah.

to Chopra go Evercore from we'll next, ISI. And Durgesh

is open. line Your

Hey guys.

Hey, good morning.

Hey, guys. taking good morning my Thanks question. for

one. quick one Just

the base was what just falling? can it you On the us Was late tax catch year? filing, remind rate for this original Pennsylvania plan in repair up

Yeah.

So people's Aqua rate I tax repair about repair or Pennsylvania case? the tax, you're guess, the asking the

I'm sorry.

I’m I -- you that that guess mentioned mixing, yeah, you you mentioned So the… --

yeah. Yeah,

take Let me you there.

the So to with the out adding that to out piece But the some subsidiary, incremental with shareholder going the for coming just deduction PNG shareholder. period, repair. rates is for of about longer. us there a was to about would customer, have of originally have wasn't catch-up of the earnings. Peoples, done what a of stay the it on proposed kept And ever what splitting It effectively that it catch-up was to would that's really some had we the that deduction

with So situation is to means on the that go leading would of really XXX% backing a a for where statutory deduction had period. be outcome that catch-up advocates we to five-year a conversations we've more time would what normal a and that is the the And customers here, rates the over cadence.

than new think that. XXXX, out really earnings had guidance the guidance be we no the as But about XXXX would it rather So XXXX, the point. are because stay any than catch earnings rates there just we'll some have we beyond on in at shouldn't because and because sooner up, of impact impact some come that

because green was clarifying yes, thanks I with have and water a that. that, did and rate I case the for mixing Understood, piece,

gas That's that, for -- that's -- going it's have clarifying for you'll you regular result the thank rate the the be approved. So, you in that essentially increases. more basically, sort side, and on customer credit of end

go in we'll just Yeah, otherwise. sooner than would we have

announce And of on have or one predicated plane as to of within sort the more one years will you plan do you equity this last the do next then plan, time when particular is Perfect. a the incremental few equity you real color quick. Any this? deals, timing -- on the in

we last get that as give do specificity really not Yes. call the point issuances we'd more we're we a on at really and closer is said What today. where can to there those we

you we As transaction. equity would August, forward that do sale to we the that look DELCORA at time use about we that did think that last the

you little before And So down closer. bit itself. of we'll then things get transaction issuances, the that more we on a cushion draw give further with details as

the Thanks, update appreciate All right. today. guys. Much

care. Thanks, Durgesh. Take

go we'll Travis And Morningstar. from next, to Miller

Your open. line is

Good morning.

Hey, Travis

Hi, Travis.

I back go either happens, wondering has the of utility headline Texas think and you and kind into type industry? crystal a little water a here issues place and across in changes I ball whatever I seems like what of your level, the to it wanted to industry do thoughts I higher get If And was even industry-wide thing and that developments. kind policy take some think big you it broadly might changes put water-related to And more look Texas leads if on policy here. or of it, could,

to What the what is little of of, probably bit power. on varies outcomes one I that -- company. takes is redundancy that which what form that alluded think ago, bit would a by I additional sort Yes. a

community in-place we think systems large a of challenges Austin and we for a people can city be good-sized Houston treatment place mentioned, today. that that our and the what of surface part, small redundancy. one I well, have that And system then And about redundancy that's pretty depending larger wells a of but in have we when have wastewater a as plant, you think in about item the cost think as that serve a how I versus you As power going versus item across where customers cost Texas, pump be throughout have big on would to is component. stations

you did that have areas add add winter Dan, of know, just weather they didn't you of appear ourselves weather any challenges the around risk As in that? in Texas to to the north like hardened before. where to kind be large we've a as as

right Chris. you're on think I there, No,

Yes.

in reliability Okay. of of on there reliability. changes gas utilities perception. gas job And the pretty despite terms conversation appeared Do gas a spikes, perhaps that the and public side then It a on going a the distribution you down thing. pricing it, the good kind of terms of of maybe similar been the on up quite of but this some moves good in heating electrification bit that's little in think did and

impacted when to protected get as Marcellus natural those the to gas the they Texas, to But gas in the -- Utica, to to are for whole power if Well, these certainly, you natural to blackouts need that's what, generation well, started, have them, When what events. gas handling sure servicers especially given fill we're water, supply going gap wind you if production about gas from They to deal comes gas with that goes power. the is for facilities we're that too. make continue from need power natural well winterized reliant weather, And down, in we think XX% saw there come of power about service like couldn't too -- were matters wells, fill of winterization so where kind in XX%, course, to created freeze the gap. in the rolling out or that to supplies chain produced wind fairly on stepped pretty it's And started issue and that companies. dramatic -- things going to up. to the natural if that of,

heating. Yes. I further it where the And assume don't to we just when you We don't conversions, we gas that here. would see for just we conversions see from serve see natural think electric it. areas wouldn't them about in

the customers region. of the we many of customers, still the Fortunately, top Marcellus serve shale on most of

in local of West right well. for unique and some winter that been Virginia, we time. have And serve areas is we're there. in the So cold in we're even obviously, Winters always Kentucky, Pittsburgh gas as heartened

gas continue in we're well-positioned only regions customers that I but So new in not hold developments to serve. think our where developers put the natural to we

any we in see areas serve So the from movement away to natural electric. I gas don't

direct-fire more no Chris. there's efficient than cold Absolutely, source gas. In heating regions, natural

Thank very that. you Sure. appreciate I much.

Ryan from go next, And America. we'll Greenwald to Bank of

is open. line Your

guys. morning Good

Ryan. Hey

Hey Ryan.

commentary new around catch-up the you'd expect of So, XXXX and Peoples to the the component, on under to in file clarify settlement, the terms XXXX? for rates gas in

things. give you'll I around about think In these settlement it. mean -- it agreement the March when on XXth, that I out will for timeframe, look clarity and see comes that

And among and then then you about any demand Got maybe it. shifts just XXXX classes kind frame in impacts structural cost of thoughts around more you're how in cuts? can sustainability bit COVID here? guys help looking low And the further, thinking out a

Yes.

Dan. kick and me over it I'll to start Let

majority our most First probably we like natural to of all, employees gas coming servicing day, remain every most with utilities water companies, wastewater customers. of and and and work the

of never the working So, in stopped our majority field. people the have

the Our area, given rotate two skeleton return primary coming third remain in a we to But we crews. month Philadelphia through. in could next time or them a both our offices work. in see get largely of and employees the in where Pittsburgh, so, Hopefully rotation a and a of

pretty think in from good employment place. we're I standpoint, an So,

receivables through go. bad help debt said aging every will we've will in we we expense areas be not obviously expect that full as -- who issue given who our working has expense level fact We Having at have -- those most one I seen accounts before. collections help continues to mode, to Now, on that can that, that here. a from to major we're to I see once the to get back some able, we do afford and taken can already been those do pay can't. And ability that we believe a business, And of there accounts our to asset do if case, I reserve get because get see and provide payment we receivables, reg in where we have take a those. the to we're recovery wouldn't

to We any collect also additional costs. continue

we some have our example, For on retrofitting in going offices.

So, from those. I material those capture But they're bring to -- aggregate those into don't nevertheless, the Dan, in people to want to this here? to not at and consider kick would we back those collect you continue point. costs. we And prepare we costs why be office, as

category. from occurs work higher Yes. And think working a Ryan, and Thanks you are our bit consumption using and see that, I business, continue customers in to consumption up normal ready pick consumption we local return there, will businesses Chris. with in little I will are more workplace get commercial but And are down you'll as that I and come see consumption toward such, back think, to normal. and lots to sort marginally, naturally people the about and people the think commercial in guess, home as will more residential you and that the where of to

some more we return the this of kind once vaccinations normal If come that is, first think think more by, -- picture to are half consumption the a normalcy occurs. I of see year where of think the we widespread. half is back I when second I year, So, it's to of to start

to in rotational will expect get add will the XX%, they the of not. And back I'm be Yes, large XX% of normal but region employers that back XX% employees and here Philadelphia do in anecdotally we a that their probably an see the involved together, I'll be could what to expect to that schedule, office. as that aspect with we XX%

I'll there. Thanks Thanks guys. it leave Chris.

Thanks Ryan.

Jonathan to we'll Instructions] go from Reeder [Operator Fargo. Next, Wells

Your open. line is

Jonathan. Hey

Hey Jonathan.

of couple A doing? guys you are clean perhaps. up questions How

help if out benefits guys the view reaching, next WTRG what case So, of doesn't repairs of settlement, timing the how push you for tax to proposed? should rate was motivation as or it we the your the

their think I Well, Regulators to down. are Listen, about COVID. we of term, costs job in and utility hold the midst still doing in this are Jonathan. trying it

in that And in now. so atmosphere right it's we're that

about they're regulator, Pennsylvania a as think I not thinking customer shareholder so and the the what point. And can at this to come

I think across happening the that's country.

whole a put there's discussions mean, context that. lot as just backdrop, I I that And so occurred a in the of of that

yet, we lot approved Dan not say, about But mean, can't I it should or and PUC. the yet settlement is public think ALJ inked talk fully about As a by I a context. said, in that the that

of a makes a goodwill gesture though. Okay. bit Maybe That sense.

point? So Delaware are is still that a trying reach this to you DELCORA ship settlement or with deal, the sale on at County

great a County. question. Delaware would with settlement I a a It's I would with love settlement County. Delaware love

-- that they I spending they that dollars don't millions I believe win. ultimately, money millions of think of can battle are a taxpayer to fight

would And to so there see settle a weeks to next Commission couple like is does. if way I this, Public on was -- that. Pennsylvania of what focused then We think the I everybody probably Utility now

there's an So team, to maybe I'll how out, love see we'd and settlement. for the the decision But speak to Essential see comes get back table. opportunity that let's a to

or statutory consider I exactly in evidence, segue that the ability open what the to they XXth more and March ALJ the around record kind consider have PAPUC, the rules could with with the option do developments Okay. extend the say, of to order deadline are their new to, concerns? these into recent

Yes, yes.

outlined Joyce two -- So there Kim had our has days. several last We these. the and are Board meetings

say," done stale it where obviously, is has be ALJ more a should would commission on and the commission I'll the The a would well. it, would And ALJ, think commission Aqua is would like the the approval. work to four ALJ. call possibility the Essential issues back reconsider send say. vote, commissioners. so several this is to you a Two a the widely which has and could as evidence work which back a And ALJ, by again, there's inside. sit and an then the something four mate, X-X the up raised I be remember, would denial. One, be, remand And then discussed Three it options.

has front the So that in likely those PUC probably the are options more of them.

Okay.

but path X-X it's then not what's it -- the approved, not does So like if it is it's or? is denied for,

until that's member or of could the see while but changes the couple their mind. sit the hopeful next not just as commission for of am the Yes. It we'll I a in weeks. that, another Jonathan, members one case,

Okay.

with good for luck will watching We additional… that. be Appreciate and

you. Thank

You got it.

Take care, Jonathan

time, back And I'd Chris turn to at Franklin for it this to like closing remarks.

Thanks, everybody, joining. for

chat want Brian, this. whole today. Dan, open always, follow-up to here for us that about open joining after the Thanks the issues have Should are team As questions. you myself, for you

for our your And call that conclude Thank participation. today. you does for

now disconnect. may You