Essential Utilities (WTRG) 23 Feb 242023 Q4 Earnings call transcript

Hello, and welcome to the Essential Utilities Full Year 2023 Earnings Call. Please note, this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Brian Dingerdissen, to begin today's conference.

Thank you, Francois. Good morning, everyone, and thank you for joining us.

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

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

A is course GAAP call, During of reconciliation in made posted reference any this to non-GAAP Investor the financial website. be of to Relations financial section measures the may of the measures. certain non-GAAP

then provide will to with financial who will Chris call on an the call turn and company We the closes and priorities. our will results begin update Franklin. over And overall CEO, Schuller, the with Chris that, Chairman Chris of With guidance an the the update an our overview I Dan Franklin, call our will before today on company. provide CFO,

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

XXXX, Natural Let's and continuous and company we Water of from by winter remain start measures. excellence updates. on improving highlights in systems, the our some weather focused call XXXX investing Despite much improvement and with some warm the unusually Gas and capital operational

which work, X% with is per of report of result to $X.XX, earnings our good this to line happy a As X% guidance. we're in share

meet $XX detail, for guidance few was range, was XXXX. a in -- to an of shortfall and net team quite which discuss our revenue the weather-related really still in budget able make versus will moments accomplishment in our make Dan more up million As

we billion XXXX. as improvements, year, compared billion $X.X invested in last to $X.XX Now nearly in infrastructure

our improved alone. across wastewater throughout replacement, the has of footprint for miles XXXX customers reliability critical and and installation and to XXX commitment infrastructure over gas This retirement the service led water, natural platform. in Our of part in investing the our to pipe of

mentioned I've projects takes thousands to achieve. and expertise significant investment this of past, spans in As the

Excluding growth reported organic capital XX% year-over-year rate we West more than Virginia, alone. of base investment from

year, We also actions utilities our took core focus really us fewer X more distractions. divestiture to will last place allow that with on

West nonutility sale less in customers. may unit You in the microgrid Virginia X QX, small XX,XXX recall, sale our of district utility, our than energy and we the announced we with very closed projects of Gas And Pittsburgh.

recently closed know, on and were used very as place wastewater debt funding in projects, We you and of to was, issuances. expenditures a sale the and million The proceeds of which outcome. external acquisitions, from energy capital of strong equity water both those finance $XXX

build includes for Now during rate $XX price. wastewater their to signed signed approximately XX-plus U.S. our in year, record we Last X over the year, we XX,XXX track base water continue new million and over year on industry. consolidation to adding and in acquired wastewater systems, the in acquisitions, agreements, X purchase customers. $XXX system purchase currently We municipal Pennsylvania. million sales acquire the North asset with in This [indiscernible] and have totaling Versailles agreement recently of

you in activity. Later the acquisition-related I'll the update call, latest on

impactful to responsible XXX we've companies named meaningful have recognizes This that year tell most business the third responsible America's to demonstrated the pleased I'm slide, is this you States on Newsweek's this most we of XXXX in on companies. the United public list headquartered top that list, that Lastly have been practices. been and that consecutive

returns but it for goes customers quality on and is our the slide. at Now next Essential, sustainable reliability for focus Maybe turning without and to saying, our our investors.

increases dividend organization and of environmental history, continuously XXX-year several by commitments with possible years many, an advantages. on years of is competitive many Our our made delivering XX

importance in of environments. I received of operates Essential operating have the regulatory constructive think most in regulatory favorable rankings. First, of X which states,

to well want in we've is positioned and there where both through operate population acquisition organically Carolina like being opportunity. grow We're growth so. to high growth to ability North and we states Secondly, our demonstrated Texas and with do

a like and plan cetera. In Last gas remediation, and water possessing but to safety lead were leaders expertise. issues, excellence. and least, continue natural advanced issues technical to to the there's We PFAS industry, mitigation great engineering and be et not operational advantage on

page complexity thousands our our working operating By day natural clear us any capital leaders in both levels. I the a on taken just operational manage numbers leader have the this every to to as have accelerated those team. us quest combination measure, which water industries. and excellence projects, gas The industry. make investment want quality in We continue of to to of of and industry-leading service share of a have people of accomplishments dedicated couple the X,XXX-plus and

Public us and the capital approach Utility Now backbone our a by gas the than report of find-and-fix a our leaks, improves to combined addressing gas a to to leaks. on The replacement, environment. the pipe larger allowed program According our both to refocused shift Commission, has a water replacement we mains our of tightening This pipe pipe compliance, peers. in gas large effort water program. outages reduces and running replacement is are program of Pennsylvania with and improves amount

leaks. few announced acquisition company, a most backlog the And when a to context, just in this the Peoples gas several LDCs had we of like years ago, put of hundred

the the company leaks period XX%, have outstanding results. the outstanding company now, Over acquired and so by we reduced run we've since

continues to also is XX.X% operate a rate, which outstanding. business at Water compliance Our

a builds to in plant. power they typically customers' imagine have rare with provide. outages. our our And cook standpoint, that systems they as water can that because reliability when disrupts this the and a You From confidence drink outage, minds, storm experience we the rarely a the it's

they we our excellence portable larger and position Now to supported generators, team have generation of course, -- and smaller raise our water. gas to prep. the I continue near storm of our larger especially on during in bar operational and our we with both systems, continue really operating plants am are

of speaking EPA slide from given and here, the excellence Now PFAS customers, the spend we impact of operational importance regulations minutes on the topic. need our on the a the expected U.S. few next on probably to this

not Now to contaminant federal and we water EPA's and we're working level the our that maximum line of exceed finished PFNA PFOA, ensure the so aligned time diligently are standards does with PFOS that compounds.

included capital we're investment million, $XXX to most providing Our that guidance the about spend million at and should I in today. disclosure new that that's recent expect say, we or least is $XXX

$XXX pop spending could determined, fluid, are mitigation we sites increase construction have to compliance any the plans for if though, we capital and point as move effort this Our is and on additional and require that EPA states for as is treatment the out, up expect refined, somewhat timelines and million I forward.

compliance the could to and contractor for agencies not to and applications our over because for a the would if rise. timelines X-year and also environmental low cost state we timeline, clarity, costs expect associated fit time work grants, cost to cause Now EPA loans may us require with with interest the rise it

customers the process month, and in with protect of for in comply we and heads to regulation Having loans of extensions said the or new so. in with processes time the look to all the are meeting where our grants for this involved we accelerated press coming agencies that, expect appropriate, to approval year for

permitted, about very huge standard doubt be that. Each what anticipated Now effort. to XXX-plus a expensive per significant. and There's procured and our accomplish the parts is no be need will To a trillion X-year line, effort engineered, X this will to comply be sites constructed. that with time must the of be in mitigation

no to the meet up and mistake, compliance our deadlines. make Now we team task will is

financial Dan So with hand over results. to it about that, talk me to year's let the

quarter X, provide fourth to year. update how appropriate, Thanks, we $XXX.X quick million you a few a concluded. On good for take last a On basis, the on fourth quarter company to into the focus on GAAP time, $XXX.X the compared Chris, the did which of fourth moving morning, is and many a the Slide had Well, year. review of revenues the we of quarter believe of we quarter longer everyone. XXXX highlights, to in full want before over million, minutes period let's

As in last by year. prices, commodity for largest decrease we fourth the was quarter from revenues same contributor gas decreasing the recovery prior the to the experienced gas in quarters, the period $XXX.X million, costs lower natural with of purchased

usage in QX was reduced to normal the gas by our weather warmer contributed and therefore, Additionally, customers. than

and Gas customer Water water Regulated Regulated segment $XXX.X Segment wastewater our and million and regulatory revenues positively. contributed in revenue contributed growth from Our recoveries Natural $XXX.X million. Incremental contributed

and the the lower by Gas in offset the items other Natural lower quarter. for Water However, and gas these were volumes impacts segments purchase both costs,

for million recoverable related down quarter, Operations and and debt items, drivers lower maintenance from Decreases quarter to production the operating last GAAP in million year-over-year million same expenses lower decreased the XX% bad $XXX were million the Natural in primary other our $XXX.X of last customer costs rider in of year. Gas the the quarter systems. Net offset from year. up income quarter for to decrease. to were These $XXX.X was $XXX.X $X.XX related costs this by the EPS higher from up and XX.X%, and was water $X.XX expenses year acquired to to fourth

year full the discuss we'll highlights. Next, financial

the waterfall. get we'll when year. We details in the $X.XX year into then to and billion level, high ended $X.XX talk compared go the revenue we Let's billion last to with

solidly $X.XX Purchase increased Water compared earnings X.X%, up million million in billion net of year. Operations Gas to the $X.XX were from weather to segment certainly to $X.XX, higher million. to share $XXX our from $XXX.X $XXX.X our year, X.X%, $XXX.X GAAP by or expenses Operating Regulated been gas and contributed And $XXX.X million. increased contributed Year-over-year, million million, million maintenance for which have per range $XXX.X For XX.X%, was $XXX.X income the balmy in our Pittsburgh. not Regulated for earnings $XXX.X year. million was would from million. and nearly costs decreased December $XX the guidance Natural X.X% it income $X.XX to and X.X% or segment decreased to revenue, prior

a through shortfall normal weather fourth the overcame how versus in the budget revenue which impacts waterfalls, net or caused walk successfully full let's Next, and million $XX adverse year including of weather. quarters XXXX, we first

XX.X% cases or on year-over-year, regulatory waterfall on includes regulatory recoveries million base the decreased rate $XX.X on start impact In left-hand revenues of in a proceedings. which Slide of with revenue $XXX the million other side Starting Let's added the or basis. GAAP XXXX, revenues XX.

The Next, organic was costs. of $XX.X Regulated additional segment million. and acquisition growth purchased driver largest lower the $XXX.X Water from provided million decreased gas of impact the our revenue an

line simply cost this this the purchased income Now gas on statement last is year's to a comparison of year's.

quantity lower of in both being decline it So prices, purchased. as natural well gas the a reflects commodity significant gas as

prices commodity lower for bills good Clearly, thing benefit cooking. heating customers, with who overall lower for our are a and

throughout million, As weather decreased And should usage gas of lower million wastewater by revenue lower a XXXX, than and throughout unfavorable well. quarter decreased as XXXX $X.X from the I was normal. and volumes the result year, colder water revenue say, by $XX.X --

And impact that these we have currently the seeing of revenues. lastly, million, results, in assistance other program warmer our contributed items business. reduction customer for to of normal recoveries I'd than do includes the not lower Gas In normalization of everyone impact $X.X like Natural weather significant to the Pennsylvania XXXX's which we're also weather. remind

been significantly higher than in resulting normal, our customers would have However, revenues. seen equally higher bills, had colder it

Pennsylvania know, you And Gas in normalization first we case, many a the Now rate we weather of proposed case, that acquisition XXXX. since recently mechanism. as in our filed

Next, and operations maintenance the we'll review expenses.

Water another expenses related and primarily production the $XXX.X Increased were X.X%, million and decrease and compared $X.X of XXXX. purchased million. a to contributed Operations from $XXX.X for added to newly our $XX.X systems in Regulated in chemicals, million operating water expenses purchased costs, acquired million year, maintenance power segment

offset were maintenance foundation, lease-related by and outside services expenses of by items, impact contributions These our operations prior lower which and charge, lower million. $XX.X other including decreased a to the as year costs as well

another $XX.X decreased segment. is Employee-related lower non-officer customer by level in to incremental natural for pension due in maintenance through surcharge, expenses gas compensation $X.X rider, back costs commodity by which contributions an $X.X gas the accrual lower to the regulated a again million. due decreased The XXXX. million, million, And partly operations onetime recoverable and revenue finally, and for prices debt employees, decreased bad inflation-related incentive

segment waterfall. added contributed growth share and slide, Next, minute of left Water and acquisition Regulated earnings let's for the GAAP a spend on organic side EPS per $X.XX. expenses from our the XXXX $X.XX, $X.XX. O&M contributed was Beginning Regulatory on lower $X.XX another the recoveries

Pittsburgh The These $X.XX, volume other of well were as segment our of was the XX% $X.XX. warmer $X.XX outstanding is approximately our EPS this offset we by decreased Water for Regulated as Natural of GAAP segment for volume that from Regulated year. and an decreased given And in is fact normal Gas was weather believe from the items $X.XX XXXX, than result result.

other This a Natural both waterfall, by increased previously. is capital increased we've Now the and benefits which in onetime and to discussed benefit. depreciation, of bar ongoing impacts replacement includes of the this offset the tax result and an Harbor, increased increased benefit interest pipe tax IRS' the Gas Safe related

onetime benefit $X.XXX. The the IRS to change related was about

the in in Jersey, critical purchase the pass-through with these the in from of water offsetting quarter as earlier of tax-related New we have of well last you change a pickups $XXX that that along month, completed all X.XX%. will impacts, as of we were unfavorable fourth rate items these debt, weather. I at regarding XXXX million and issuance and So O&M seen all Texas financings, note impacts the discussed a the a first may XX-year

We And an program. to soon of be this, equity $X raise years. given file which through ATM cover to approximately an $XXX equity should million up billion, our to also viewed for in ATM expect needs multiple XXXX for we'll

completed for our regulatory million $XX.X in to footprint XXXX, states rate $XX.X increases other In Water we revenue of total in activity annualized or filings for moving Gas. surcharge Now with all million matters. and Natural and cases X

and surcharge of Water X our filings we've million XXXX, $XX.X million $XX increases annualized total in Natural completed in or segment. Gas in revenue states $X.X with rate million cases Regulated achieved far our -- of So

rate with surcharge in We filings have or a Regulated New Jersey, our Texas XXXX, base in Virginia underway busy but manageable segment. Water for regulatory calendar and cases Illinois,

next Pennsylvania end Gas of base which before filed utility, case Natural discuss detail the for slide. just rate Regulated in the more we I'll And a XXXX, our on

the Gas rate we case a Pennsylvania the mechanism filed weather which our of is in under the today. this a Natural business also since ownership. and number Gas first adoption the normalization, that of in in first Now for It's have which also request is Pennsylvania case our the a repair that there's first tax peers

shareholders us have And the As X as Tax with we've an repair to part tax years, XXXX. to would of order the terms stayed out into $XXX of by to a longer, but tax of of customers, benefit we on as the the reminder, from this you out commission increase the is repair XX.X% expect benefit likely million and of file requested end associated revenue. case, us as in stay shift for this case, incorporated our we repair in see election, required rates. to the the rates or slide, allowed

significant. Now prior from in since rate up in Peoples base test is case $X.X through X,XXX forward-looking Pennsylvania in have at therefore, $X.X The we'll over rate the fully base this in billion projected mains replaced is of the the case. year, rate case. And gas last growth miles billion

X-year has greenhouse made So that's while doubling investment significantly gas in since period. safer reducing our XXXX. a and system more a emissions This our reliable,

the years X is rate seeing X projected we out of the recovering our especially for Aqua file industry. We've case a different XXXX. year, since rate the rates be of inflation, some believe addition, for of that nearly rising Pennsylvania future activity, you been nearly may it's than years expect Pennsylvania. as of quarter, what been We in Given second filing. to test very last Aqua want our Pennsylvania anticipate across fully did interest through the impact mention we much to rates in And we in and for

strong regulators known on affordability. advance, Our and plans a we've by the in are maintained focus

over a will XX our with responsible We Chris. also subsidization. take that, approach And back I'll to Proposed Act Chris? it hand to

want the that. front. results. great it's your Dan And our I the financial done to year in as and by you X.X challenging under to It XXXX Dan. weather years was recognize his been team I and on Thanks, for it's hard a also believe achieving leadership thank CFO, want work to

Chris. you, Thank

Yes.

moment Let's about for Water talk a and acquisition Wastewater program. our

has you now. years that Steve -- leadership know, Pennsylvania Chairman the that that evolving DeFrank, associated XXXX. successful we're use the continuously you statute nearly to arisen with the was on Public in addressing of the some Commission the for passed tell As and market program been have really pleased XX value I Utilities Chairman, of issues the with have fair of

the water in proposal when increases governmental made fair Pennsylvania for our this their as they and very has to providing acquisition a We a or program sell at a meeting entities difference customers, will real view positive in decide that the strong. recent We that believe rate price a believe pipeline while make development PUC moderating he wastewater still utilities. public to remains in

I we XXXX, XX,XXX wastewater our to customer adding in current call, and equivalents As footprint. mentioned earlier in systems, acquired over water the X

goes acquisitions, of now base together of fully the utility the continue that industry into the the in the and will XXXX. program. do acquired to player a I in work doesn't be the though since leadership this of justice company over major wastewater just team in consolidation have States. $XXX million statistic United via amount We to water rate that came That expect

take let's to slide, a the pending transactions. next the to moving Now minute review

X signed in equivalents will this These approximately customer X of purchase over have states, agreements which As in XXX,XXX operations. water wastewater have existing million acquisitions in total purchase price. we and asset call, we and add $XXX

Allegheny Regulated to Water County, X,XXX this approximately in wastewater As to segment. signed Versailles Pennsylvania, remarks, acquire Authority our Sanitary North which with customers includes in opening Township the add noted expected recently is agreement my system I their to

the Western in reputation team of resulted relationships our Gas this is Peoples Pennsylvania. from another Now, and transaction that

had opportunity the You that relationship leverage and gas water another to utilities. between

of active which We with wastewater currently to in and have municipalities, strong healthy customers. and additional continue over see discussions water for potential a we're opportunities and pipeline engaged growth, XXX,XXX

If to the future, and Chairman successful, acquisitions closing much DeFrank's that a in a path be should bright proposal municipal clearer in Pennsylvania there is is spot.

I Now remain we to bankruptcy regulatory DECLORA but DECLORA note close the before that stay moving continues ultimately the be by the a want just court, will we to confident under federal process that transaction. on,

judge has scheduled motion a County's at is early validity that lift February, Court Pennsylvania stay X asset been In Commonwealth filed the Bankruptcy purchase hearing April, Federal months. for in rule Delaware requesting of there In Court the DECLORA. another we the the on agreement with place to our appeal now of

what You'll on today, upheld can the close believe successfully in was recall we still transaction court. Based we by that lower mid-XXXX. know we this

to Now I visit priorities strategy guidance, our and get of year. some high for reaffirm want the before to I our just

will First, for drive with capital infrastructure. needed significant safety we're our growth, strategy, continue turn drives value. also regard quality, to This will customers. investing also drive rate and in to It going in base shareholder reliability which

always piece long a and continue. is our continued shareholders, key We we a driving priority. record have value a dividend, affordability track of know to will and our shareholder customer that is in growth returning Importantly, cash of

In fact, continuously our now. XX years dividend for we've raised

our us or opportunity shareholders. expertise in strength. We our to and scale we'll regulatory costs transactions consolidation to this that great delivering opportunities building the strategy that to constructive manage communities through position value financial Water in of Lastly, be to continue broaden pursue we and believe the and environment, to apply the base puts a for give continue see us that need allow our a in us economies for and customer further Wastewater space, acquisitions a to solution

the the them accomplish. As each some and, summarize important to with about we team, here. for we XXXX, share of priorities Board you course, I quickly management I'll year think have and my work

our excellence, Arnold Mike calls this First, the and Huwar. increased we'll continue and presidents, examples year. share to remain throughout exposure focused meetings you segment on Colleen on will our I'll to operational include with and

improvement we'll Secondly, the in make tangible customers. our look opportunities service provide to continue for to to we

visibility to well provide into exciting In pay an online. details usage see their and customers customer as and and rolled allow our fact, as we wastewater new just to their restoration, of portal, bills them water with more outages out the easily more

lead leadership we this to we'll our share our footprint, Also role know. remediating we'll continue industry knowledge help year, PFAS our in and what across the others across and leverage

sustainability. We're focus continue sustainability going our commitments our continued to on accomplishments. and and Now to

regulatory very year, refinement the to We of this FMV will be and of have It's to wastewater water X things also among last, the busy in important a And folks. acquisitions. through rate finalization grow company front continue accretive year this others, cases Pennsylvania, the year, we and mentioned some the Dan that going including regulations. in pretty PFAS us

All right.

Let's guidance. get to

read want last in Before we I what release the walk through this, acknowledge to night. you

in rate be Now throughout this we are Gas divisions both in growth rate year, guidance a we and range. per through our Thus, providing share working largest critical Water X will Pennsylvania. and earnings cases, from both multiyear in refraining

we Now this share next range. will longer-term normal our per earnings once will year, both to be time are guidance which base return rate complete, cases around

with So expect review X% is that XXXX, growth guidance we're annually a and to opportunities And existing in me believe which let in this lead invest to regulated XXXX, a $X, PFAS is point of the that range. which Through sight by earnings earn providing, and being of to on the mitigation. $X.X we regulatory to clear front some In billion significant the $X.XX plan requirements our line infrastructure we out, X% company. is associated increase approximately we of let's the provides driven utilities. to

needs the $X.X I the in I'll we mentioned and throughout may regulatory XXXX, invest PFAS, lumpy, period to based the billion The between Now annual X-year a point again expect to $X.X activity billion. recovery to and be call. bit earlier amount on in as

moving our of picture provide a longer-term for X-year long-term view capital outlook, spending point we will a outlook better on capital to we're that the a a providing out that investments opportunities. first of hope always time. want capital provided also and to I you X-year We've

XXXX. base grow X%. Now investment, we approximately Gas at this of and utility rate a annual rate through of expect will rate approximately on a Water compounded annual growth compounded Defined for grow Natural base for based at growth over X% will XX%

expect growth X% customer continue at organic X%, will growth of average. continue a Water that and rate We together, to to acquisitions Wastewater from on growth for and

We are always acquisitions a our should growth reminding investors that and over average. viewed X-year from be are lumpy

We base. expect continued in customer stability Gas our Natural

as mentioned, to ATM expect to gas XXXX about emissions XXXX XXXX, million our an program. $XXX by by reducing in equity Dan baseline. from raise using greenhouse Now we Scope also Scope And committed X we remain and our XX% X

All As happy you We've we're be as estimate know, progress to take questions. a this we formal we've already about to the XXXX. significant and our on lot. concludes That XX%, covered remarks, your made of year-end and it right.

Francois. So let back me turn to it

Instructions] [Operator

The question comes from Ryan Connors from line Northcoast first the of Research.

I job think you did Dan. with a great details, the

in the rate noise in about strategy. kind in of forward? of that couple of right CapEx strategy lots Pennsylvania tactically, -- How increases now, strategically picture rate going PA, rate terms about impact terms you high-profile there? and does here. thinking about Any bigger tactical industry rate thoughts a of Chris, the Just talked But questions in your CapEx cadence cycle of water. of in and

released PFAS face, been regulation suggest challenge over rules moment for hasn't It we that Pennsylvania, us and states is Yes, in important. X-year Ryan, that could I by the formally if that extend ago with yet, period. can to but listen, a I X is a years. cadence the federal example, that appears comply the would draft outlined The think requires

opportunity only that a sooner. we if to now they allow think is in have cadence. that the would But we that spread us a push it So good the could us bit. That's it, us extend thing to cadence little an little give a

us, Now capital lead. there's before a lot including of

So But affordability impact things. that is cases. how in we cadence I the listen, key think about of future could think

to sure how think about we XX of think that our make to shifting is us. think also throttling and that cost And things important. about capital also remain key customers of I to is I Act critically affordable

so where the How of of your appreciate, on that comments least M&A until Yes. actually impact one Act but sellers, view in your this some deals, up? the XX can rejecting some I off ends you was potential environment, get terms PUC not news the this big on And pipeline? relatedly, mentioned then you scare there reform deal. -- but which yesterday, an on process near-term we mean do potential that will I at finality the

interesting what And does to that pretty cost an on it depreciated It's the question. provides probably expect. it can is think to they what's I as sellers, original guidance multiple clear

from of months comment of we're XX-day Now probably XX a a couple motion away the days finalization period. Chairman DeFrank's by followed there's because

Chairman's it as clear Assuming prices give it will stays guidance proposal even close pretty those to to where where purchase is, can be.

keep I is paid commissioner's the with his changes. that decision X-X I utilities in me, on Commissioner line believe premiums And check. think motion can probably on And nice for proposed we in think these that (c) rates DeFrank's those really while still are vote be yesterday's

depreciated them the one. given difference for hard been that have think do it on I original multiples in would to this the cost,

this think, systems and think as do is acquisitions, particularly in really about are from Now Pennsylvania, troubled process. we this I important, differentiated

many think I acquisitions so the the that have we And are of in pipeline, them troubled.

so more acquisitions may you troubled take and focus. a in this of a And for flexibility more have little they bit

one last if that. for in. I appreciate sneak And one Yes. it me, I could

your now last months stocks Chris. or water water reasons so. big relatively be big stock are -- actually the the there's names. reversal over for pretty headwinds facing pretty Water outperforming the X picture, role there That's mean some gas a gas Just seems of stark and to been super utility seems well. done one like has I now and

in thinking, there Is really How talked a gas past does water. and shift that growth gas portfolio forward? thought I strategy about of at all, be kind in staying mean, maybe in if put your going the a process that you've on growing platform? of could more

that -- now not -- I'm exactly you're public even European yet, I is sentiment. in saw in but the right in Union, ready to that green again. gas the Including Well, considered you say your think Europe,

think bit. So sentiment public changed has a I

that energy I think is it to in gas here is the be realization mix long given very natural the time, more plays the going Peoples critical a today. knowledge in role for evident

delivering But focused really to rate this in going year we're Pennsylvania. said that, case on quality having listen, a remain

going in And Gas business XXXX. the so be in primary that's to our focus

of The from comes next Evercore ISI. Durgesh question line the from Chopra

water to us or cases, getting of upcoming several in on comments. theme I of seek Just lot on what revenue You case? water from investors, the you the kind just sense of of the might affordability questions wanted rate ask give in front. the obviously, kind times a a stick your rate mentioned you Maybe increase that of can

a rate So just you a how trying something a range along us sense to see might lines? get if those or increase can give big you of

through indicated, you Durgesh, working that right a concern. And case affordability So as we're still course, is now. of

So -- have our pretty number quarter when that number or we first we'll have close We'll we don't that share. obviously number call. share a to be to

at provide more detail point. that So we'll

business and to we've CapEx though, in a that going Water and you shown, we're that and portion I of CapEx that have would PFAS strong the it X-year see say guidance in later to the continue CapEx.

rate the here expenditures this capital of will in case. through time for be XXXX included those period kind So

Yes.

the the We to PFAS. Let consideration about is, call as me speak environmental But we timing point for key much this a some -- here. -- in Durgesh, regulators, with how regulators in is line going you think even of where with to, We're time pretty talk this meeting just made to this case. we're that that I we comments know about lead.

the are clear as Dan said, bit. numbers moving months. should be So coming in a it around still But

that. large in up appreciate a pretty then CapEx. step I And

XX% plan talk up bit? annual I beyond. just follow-up. a it we sharing And guidance. should take to you the think the on needs Maybe quite appreciated. to you financing that? $XXX rate? average this a way, higher as just, is have if like amount, it's a run But just stepping previous capital thank use the average Or versus for higher talk you, obviously then -- million I I talk can be equity then the given much X.X% X.X%. year, to and 'XX the in Should and Maybe CapEx -- by versus for can that

how probably think depends too for But also that beyond as depend acquisitions because needs. on only in say, and $X acquisitions the both and future again, We generally, it on we're billion program, many about that on play investment provide But years. they would details thinking Yes. equity ATM I as XXXX, that we out. the X-plus won't needs about

is you we directionally, then materially like towards rate. a maybe Could PA but one guidance, question faster forward, rate growing or think Okay. perhaps of Dan. at should Perfect. outcomes more there's think a growth faster see about growth materially grow in spending we Or step-up regulatory I maybe X% rate at that rate Or to about money? to me I just you're the as you've for don't clip, no cases? the help going is, long-term long-term end know I to that? -- clip could that, maybe high a in projected us got base the appreciate And appreciate long-term how last assuming X%? -- favorable

to I commission the Listen, trying Pennsylvania. in Yes. we're think from refrain front-running

I careful Listen, going answer about coming I'm Peoples which be this. to think we've many how out times. we've is I repair, in of -- I So talked think many,

step the we well earning of and be as repair what that, not And out think case. step is coming before rate about would in a so normal

guidance -- So about given. think sense think that of we've it. gives would we how hopefully, you the I And think little with be I comfortable bit a I we're of

The the of Morningstar. Miller Travis question from line comes from next

going of and PFAS investment again, discussion whole needs. to Kind this the back

X% the to heard was in $XXX more million huge Does that the Or and/or CapEx expensive I you if there Chris, quote? refer and correctly, the think, O&M? I O&M? potential is

Yes. Yes, good question.

about here's So we it. how think

X-year estimate time in saying million. must the for line As in example, right, we we least $XXX the this Carolina, we -- North that comply Carolina. we at heard timing, when But today, with we're if were week North

on And we're so to going all be push.

before here. hoping we're faster, we the hoping to which around originally get process potentially come that to get apply costs added we X-year, But get loans with because if and X, from we low could wait. we it Pennsylvania, to for loans be in then move our can't were build, inability they grants we grant have to some a the In regulators -- added that the if require comply definition and And cost. from have and interest often, us to

And so us, we're that with that's having help our the conversation the now regulators help is customers.

all for we it didn't the are water contaminant and we, in paying put with fixing faced it. nor customers this Our but did

those trying attain go a if can. we're we more, some so of grants. best to as and can't moving that is That's number around these bit little costs north we why And mitigate could

in of kind discussed Or that and some partially file then cases? getting was costs regulators the of at Have That having recovered answers terms treatment that table? of you full you potential? Would there outside of are much Okay. to on rate some follow-up base my having with all? discussion those is be [indiscernible] how

recognize having is We those of to make had customers here think about rates course I for make That their investment that a with that important is in an things And some cleanup are happen locations. would even of in running portion pipe the we with several compliance discussion a in we not it's internally discussion last long to improvement how simply a normally associated night. a utility. of and or that,

want customers these I really some paying costs. for to that they're of understand

We the get hope from to clearly, are about million Now to cover, but $XXX I'll and some million talking going not getting $XX remind from here. lawsuits. polluters, we you between recovery costs the somewhere we're that that's

weather a application? the terms that the this gas side. a pretty other costs. one separate gas a state getting And Okay. clause, know in one of or least has in weather rate I weather at then either Any on That's helpful. -- utility thoughts in case normalization normalization other all robust normalization

that's in filing? the that the of rate in current come if case? would discussions Or something wonder a separate I is along part that So

remind owned company. too, the we've this Let since is case our rate first you, me just

don't we why that's So have weather norm. Go Dan. ahead,

Great point, Chris.

have this a And in achieving our similar for point, filed we Travis, companies very your will be have few yes, a weather including a program here rate our company. it and case, Pennsylvania to normalization. of peer request So beneficial to

with something think you discussing there's do wise, good unique that the chance? given other utilities that Handicap about regulators? Or what a have you're Okay. is there it,

the I would it other that positive bodes in decision say the have here. state fact utilities well for a

the question Baird. Sunderland next of line from Davis comes The from

the this, for know in rate guidance. for we decision playing of should me. case follow-up. for EPS pending mentioned think have the but a wanted Two reason long-term I this? ask about give I And you then not to And questions to guys being any one as role acquisitions, the I

filed about X all. at worried It's the major know, a cases as have that not account income. of which fact not Pennsylvania, No, the we really We're net large our for, you all Yes. in acquisitions. rate portion

actually conversations do was be be I regulators that. so had who to able And it to to sign with of a respect said

And so that. with I gladly comply

in overall really here So commission import to the a it our and was about rate given processing returns think its how the in just picture not especially of front-running terms they case, company.

environment helpful? in maybe are? guess, one thoughts commentary now seen makes I in be the XXX,XXX at higher would light on with a any I number of of at where an And too sense. you're just systems you another the speaking, where pipeline. That increase acquisition then the high Any valuations Broadly level, or right rate guess, on have on the customers

both the lot on [indiscernible] people really would the that newest I'd of those. of are that was (c) processing I the and say motion Yes. news that -- active Chairman's occurred a is information. information, then just information really, there's new happening. say of maybe conversations Clearly,

the sure market react. will not how So exactly

clear these court motion having the the prolonged with I'll deal not to a and tell nature you the issues what, of assuming we just closing path But and see the and Chairman's challenges. successful is to actually

think signal which all will path one, in Number to today, I as be clear think to two, is a a there's premium, be premium. And market. they these actually controlled clear. a at paid closing, can cases path not of be the positive a that some that very then to I

lumpy. conversations of I general terms pipeline. about municipal goes, they're that So We've would in acquisitions say now are others with talked in our many steady as she times. the

forward And so back. sometimes X like and do strong. you pipeline nevertheless, I comfortable X the is step still feel feel that steps But it's

Instructions] [Operator

next Jonathan comes from Fargo. Reeder from the The Wells question of line

'XX I sales that the to from guidance range closed. that the include nonregulated just clarify that doesn't recently quickly wanted the gain correct? Is onetime

correct, That's Yes. Jonathan.

excludes gain and on So that EPS sale. guidance weather presumes that normalized

you long-term since round the soon terms rolled I little XXXX CAGR, in gas base. pending XXXX and still PA appreciate to CapEx during [indiscernible] Great. just guidance didn't fall I'm Okay. I why the And and also period, to EPS that of would that provide, X-year confused, up. rate you guess, of potentially the out filed rate there's another after of kind cases be wrapped that a

X-year EPS presumed step-down assume and X% even CAGR grow kind were So And X%, meaning roll base part do is no with reason intend the next do over part, you wouldn't if a it is, and of of out first Gas when to into [indiscernible] the there Is range, the I provide any taking you second equity account to ROE? change prior then to parameters, guess, the ROEs we rate expected at year. the the the EPS question return consistent current just like allowed CAGR X% to earned Water, people's ratios. be in given to

Yes.

a lot So question. into of questions one

covered and terms Pennsylvania. of but again. kind through coming I in say before, I'll recognize guidance why So of just there's I the cases regulators. range Jonathan, a with of that stream

Peoples XXXX. won't quarter, it really of each We won't the conclude so, time. other. think at to one really on conclude a top have case here. until happen until a fourth just And The probably The It's of quarter Aqua take case right is case way we overlap first just heavy about XXXX.

we CapEx, years go. a then the this to so how our we that return but coming. our we evaluate And stay have think clear guides. we've I at X respect That's there's time would with anticipate think view the and at would happening X-year cadence, provide investors. to could I much on a many probably I year do the what's continue X-year guidance, hopefully, guidance expect next industry. of cadence not And to things to as largely just in to we -- we a regular as look I it we can would guides always provided. and regulators

XXXX, And I provided base Gas outcome. terms case the so forth. in projected fully layer future Peoples of and at there think, some you test what too, an Jonathan, a if year in and would rate of that terms to provide model equity Natural you data look help tried we and rate We've

more any and at to we this time we're need a you help conversations. not provide on if take guidance So But range moment. your going obviously any can have just that, we call

guess mean, the mixed some there Yes. that No, the of even deference -- in the makes with at with more just plan other to EPS kind the it's the just years Then X sense. rate is keep out base a along step-up people I regulators and but message, growth, sending CAGR the year it a if strength wondering was to CapEx, the of versus I I purely stuff. X little now just just like

that like include for M&A consistent it right, So that's modeling with off, $X.X anything past? pending doesn't future placeholder, I the done pure billion, in first you've or just in guess, how of, the CapEx, kind terms of

Yes. It's the consistent past. with

CapEx signed purchase subsequent So for include to does it we agreement. acquisitions, it includes have include prices -- a -- those acquisitions where and sale doesn't purchase It acquisition prices paid. closing

Okay. like [ mean, heavy little bit a off you the is going PFAS that's [indiscernible], ] should to still but... assume I guess and like stuff? 'XX billion 'XX little gradual determined, of a increases -- be terms in it or because to be billion what more of I just annual to And -- of we then $X.X $X.X in [ the ]

and kind that billion, in $X.X directionality necessarily you around it. or and over little I this Otherwise, you're bit X-year It's in take by X-year guess bounces be of X, $X.X of program I to state. that if is kind by a to a $X.X years. billion whether it a not PFAS billion divide range say and would Yes, range, determined it you those

a consistent increase? just talk What up? you caused I customer that Okay, lot sort And of to will think the CapEx foresee? been CapEx with you increases higher kind past it have about budget. drivers what bill Because your on the bigger that, step along annual kind you average the can in impact of years of is few the increase. of you'd of relatively then the kind This

see look Yes. have all higher the I to work as experienced start chime then I'm and in. past. than happy construction the and all this, think do do forward, in utilities had construction we Chris that we But future can and costs really companies we've in

when had in develop previously plan. we lead and this a clarity So bit more here as Chris. plan PFAS then, our that gets incorporated X-year got X-year And regarding we've of well. then...go than we course, And ahead,

'XX average in call mean now $X.X [ up $X.X an it, billion [ we're in it's billion]. billion were [ really coming to, we step ] of up. Yes, ] I 'XX, $X.X and

cost it's and labor costs as just we're on given increase. it a north. then we're lead, clarity seeing -- seeing massive well, is PFAS more the So increase. And not But migrating

in in been action a a filed? to from water the liabilities related utilities there's have the Connecticut lawsuits might think I have rule? perhaps establishing PFAS around that some this Can the me, federal provide PFAS any or efforts And update potential on Okay. water, on last state for any to front. to it distributing prior protect class EPA actually issue that then you

level figure I state out Yes. I at to water number of mean through legislation in people think liability. that to trying kind the are even from protect of utilities listen, -- ways a

there's product -- there. liability in as industry of closely as company the lawsuits, which is One X And action. the clearly very watching we're well. said, Connecticut, As about public rest the class with you

any protections. aware passed not in successfully I'm of terms that have of

going [indiscernible] the think with on treated about protection, going we also the understand looking to forward we're we're right? for for really how we As looking waste. waste to side, want be

of get Capito, we're done and Shelley area the in protection. So understands Washington Listening hard and quick are like to and out and to [indiscernible] shout guys just really facing. give in And work this some I'll nice leading to working Senator the be what try done. lobbyists a to industry work who's really work

we're Jonathan, about the officials we team, talking The again, to didn't water elected is, that there. put --

fact, steps As a even of we've place. matter taken in to mitigation now before put

we companies our to our and so believe that customers And protected. be need

category that put work would needs be I to in So done. of the that

Yes, actual of customers come utilities, gets that given definitely the Okay. water that back size is, on to liabilities interest, passed like ultimately know the everything it's doesn't the and polluters I and kind of the on face the hopefully, bills that. which

So with that. good luck

you. thank Yes,

the from comes line of Orrill Gregg question from UBS. Next

your 'XX And guess question, how Just base for guidance? with opportunity, thoughts a think on rate an base about criteria the growth as separate Aquarion the that? year you I would how align I and that is guess,

Yes, that's correct.

is On market in Yes. Eversource. announced Greg, a as the it's asset question. the Aquarion, by good Obviously,

Let's in strong nice start in asset asset a who little terms with maintaining itself. a Joe of done of bit. Don with the who Morrissey, the it's the along runs -- company, runs quality the growing it asset, Nolan, Eversource, they've a job

that from nice a think asset. So it's perspective, I

the a also buyer. I the An I is think any requirement to regulatory ability a referendum environment. think Connecticut in And potential I case also grow is of it's challenged with little a think X.X% challenging to latest to the But bit ROE grow. concerning, in

But of look I think minuses are. and it asset. to to asset, So interesting there's some and about talk an are that it. I at We Listen, people our think don't plans are lot there some a what things. pluses challenging going has it's

questions. no further are There

back So Christopher Franklin you I'll to call. conclude hand today's to

know for a in available I the follow-ups. little and us, questions are Thanks to the us myself, the team today, year, a sticking material good today. industry. cover on for Brian but happening with Dan, joining lot so always Thanks and we long went folks. your of things for Obviously, many

Thank you joining for today's call.

your now may disconnect lines. You