Essential Utilities (WTRG) 5 Nov 242024 Q3 Earnings call transcript

Thank you for standing by. My name is Ellie, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Essential Utilities Third Quarter 2024 Earnings Call. [Operator Instructions] Thank you.

I would now like to turn the conference over to Brian Dingerdissen.

begin. now may You

that and on Quarter for which XXXX on event The an everyone, a referencing Essential of website. webcast we'll us Utilities' update this slides guidance. long-term Third Earnings be new will thank morning, be joining and found you can for provide we our Good Call, during

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

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

Chris will guidance. will Franklin, then our We today provide our and CFO, Chris company, the results, closes who with an an Dan before on provide CEO, call the and Schuller, financial will begin the Chairman our on update update the call with who

Chris With Franklin. turn over the that, I call will to

a Thanks, very to more today. in really I've run brief welcome, color, just here. We've got summary top but exciting Brian, very, and share got it some through some everyone. on news with you let me

with that importantly, little rate $XX from And had we to gas a case a We then the quarter. Helene also and associated Pennsylvania guidance hit had to we multiyear far Hurricane Financially, strong Carolina. our our great weather an XXXX, DELCORA year, going a are yielding include rate we're strong bit we a case, our in normalization that any have rate -- investment had which Pennsylvania not at EPS reinstating earnings about North us warrant talk recovery capital and X% does a DELCORA. million, We X% settlement this growth a included approved through mechanism. so

good the So for about of a lot things talk to quarter.

let So get details. the me into

$X.XX share per which we for First, the was earnings above posted quarter, expectations. in

spending capital year. minutes. spend $XXX.X quarter through We $X.X into $X.X Dan of billion billion get the million and end the just this about schedule quarter, for invested right year. third the will Our gas about wastewater natural water, financials the a to on this infrastructure remains we'll few more details to and in improve

for our September, PUC in $XX case ownership. So gas natural mechanism. normalization the an revenue annualized rate Pennsylvania a The under the approval million first people's included of unanimously approved weather and increase

with others it. associated It's the You weather this by to financial stability have our volatility provide predictability for probably greater both mechanism know because financial mitigating our designed investors customers and impacts. and abnormal

that this and impacted year recall you'll results. last our unusually both year and have know have been I warm weather

it could gone the negatively way, customers. have However, cold had which have our impacted would could abnormally other X and we have years, easily just

reducing with the will weather assist going So all forward. ability this abnormalities to these and volatility the mechanism in provide mitigate should for new parties

did that PNG the more the approval the a that little case. Consumer I Dan want talk review for to do bit Office a want I petition mention Now of the in mention a filed and but minute, to will Advocate of about that.

our annualized in increase a the have And designed a total October case, Aqua operations. rate briefs We XX. those from rate that water provide the about talk filed settlement to documents, revenue wastewater we you'll see on $XX and Pennsylvania million our of agreement case. also water Let's

recommended be, decision PUC and that website to on time. this agreement, would all filed the the by on be X law subject available formally We as note by settlement PUC. to It's administrative settlements expect the settlement judges that and agreement the a approval at to November important remains

also East it's rate excluded PUC, from acquisition Pennsylvania, you'll wastewater be with that a with the decision was that settlement decision of in in on coincident an I that mention fully expected case in acquisition, the recall the litigated February. Whiteland, front should and will

Now progress includes the rate detail in have of the next which growing the annual growth cases a guidance. EPS to provided Pennsylvania X on rate slide, us I'll significant review our opportunity guidance, long-term reestablish compound at more on of infrastructure XXXX, continue X% and for by This improving X% X% commitment years, XXXX. X next and our natural over next water, billion X $X.X to growth gas through investing over and years the combined rate the through to upgrading that's base continued wastewater later,

Importantly, DELCORA transaction. to the the EPS this from growth achieve we including to without EPS action expect any

of So out of clear, enforceable but taken purchase DELCORA that will our overhang remove delayed our remain that close prevail agreement transaction, the closing asset any valid ultimately it will to we've be associated be DELCORA confident we might with to potential numbers. so we and we and want that the

that our And communicates we the of investors in of right customers. for built balance infrastructure believe growth results level rates our ultimately investment the are that right on guidance this affordable for

truly So win-win. a

inflation, results operate. slide executed credibility our Hopefully, ability some territory. of our we plan weather year. most record underscore continued the higher recent warmest where and this interest on we've the consistently to execute every and X% indicates, in strong grow to in slide, on jurisdictions delivered results We've our X% these and our indicated our this the natural achievements rates gas despite earnings regulatory As between elevated and

right. All

Just on our electronic worry talk of We to physical importantly, communication some clearing team was impact the to with through that country, map and communications take respond, storm communication, disruption the had and signage, the other want bit of we forms operations. regular early Carolina cetera. updates in so most debris, other our moment, Thankfully, passed. to to after I and South. little trees our about North allowed us were people on damage prioritized Helene customers, the assessments providing our do a hit by Hurricane our hard particularly quick et a hurricane, and in many

in inspect in where that the damage serve. dispatched with also inaccessible reconnaissance We we communities particularly either to areas special a mountainous more unsafe, drones were equipped or team

in of systems of work in back appreciate work Now we the was were all provided, But in patience effort repaired our the customers We're really And North functional. of back XX, North up the X also as teams, impacted. our team. and dedication they grateful and strong were just systems the everything days Carolina and our power and but fully and for total, understanding by our extensive storm. of Carolina through October after XX in X

to cover to for regulatory matters. financials me quarter that, turn Dan, and with Dan? the And going he's let our some and

good Thanks, morning, Chris, and everyone.

this quarter. the highlights, As Chris pleased with mentioned, QX financial financial the slide, into results waterfall. high-level discuss then I'll with the we're details I'm going and for On the to

the revenue increase and XXXX driven marking the increase sales, $XXX.X increase million, offset an lower far natural were the increased surcharges, of an about in of from minor Our decline XXXX. million quarter revenues price in of by This gas compared These factors $XXX.X X% customer water for growth. and of to rates water was third sales. third quarter gas the

West both a of This with decreased expenses which earnings quarter of utility have compared achieved We to energy in for assets per in and $X.XX, area The gas in the and which reduction to share Virginia the of we the divested. $X.XX projects, primarily due share XXXX. third was operations expense decrease decrease to quarter maintenance the expenses bad a quarter XXXX. per associated Pittsburgh in quarterly of and quarterly the earnings compared third debt third

in revenue gas didn't increase in safe by the expenses, tax a we harbor, last of So quarter and this in benefits onetime associated repair O&M positively impacted which, an natural while the year's third had year. EPS with course, repeat decrease was significant

revenue waterfall. Next, to let's be the first, look at going the waterfall. It's

of recoveries was right, growth coming volumes volume the slightly gas million this due gas majority water well warmer-than-normal acquisitions left segment, we from the the offset an purchased plus lower organic by category. segment coming million increase million, water in $XX to with vast and the as Moving of about well as as business. in costs in increase weather of This other to as the increased water sales and over $XX $X have regulated from over regulatory

quarter warm led as experienced and excessive Revenues from just of for third at in shy the saw to X% consumption water lower weather increased in compared XXXX turn the we We volume, times North water of segment as the dry which Texas in in regulated well in higher Carolina. but to XXXX. in mid-Atlantic various and period same the Ohio,

costs O&M primarily due were employee-related the previously rider among to We Slide customer and energy let's impact in on increase in costs and in the in area Water the the segment. And of Next, to water modest in O&M expenses the decrease growth the gas bad gas debt now Pittsburgh to approximately volumes million business, O&M expenses at increases a of relatively the The divested increases reduction and reduction smaller to a a saw related the discussed. look Virginia West production due costs $X.X higher utility in assets to routine customer the overall XX. project.

expenses O&M quite to demonstrates operating which year-to-date is year, X% up continued strong, our the our only previous performance efficiency. about commitment Importantly, over

$X.XX decreased $X.XXX by decline next [indiscernible] reflects with at Slide These thing depreciation on materially EPS year, expenses. see volume, in slightly repair water by benefits increases interest the last left increased in let's the and then customer tax Water and gas of XX. $X.XX recovery increased nearly of were $X.XX from on Starting $X.XXX the to in close increase from the and and consumption and $X.XX regulatory other, waterfall Next, EPS offset from waterfall the which segment. the more is expenses lower we look from nearly the from growth

benefits As I the lower timing tax of natural repair the the safe are impact earlier, XXXX. gas this the in year of result noted mainly harbor

pleased given in the lower slightly In we're results strong year-over-year. with and the for business expenses the quarter, water performance conclusion,

More and track the investor business. our on year, importantly, gas the we and once normalized for project weather of adjust with for sale line in the we per expectations guidance remain energy

to the February, guidance review May guidance provided in We common $X. provided in to for share Let's August net updated and as $X.XX be in well today. reconfirmed per income as diluted XXXX we

this achieve on consider to sale and the expect We impact. weather we gain once

earnings EPS GAAP range, it add to and to guidance into to sale, weather energy the per that guidance the the figure $X.XX this due expect if in we'd share the So think range. QX warmer-than-normal $X about project we but our QX, $X.XX from reflect $X.XX back gain exceed subtract will to and way, result

to Chris million $XXX over As through to $X.X on $X.X XXXX, between track and do already We're September. this invest billion. invested mentioned, we've expect billion in we as

filed mainly was million, the December The Pennsylvania the in to the normalization, case, into next replacing order Turning of and tax gas, to base, as at order due infrastructure order to investors. Utility aging of an in our slide, which we the both doubling P&G activity. incorporates also since regulatory Public or from fully revenue increase This revenue an look Pennsylvania Commission the weather let's requirement, the for is customers. This good as included rate XXXX, thus last well and $XX customers due back natural September. benefit rate case annualized received repair benefiting

to didn't settlement of information increased a through order as has that PUC, unusual to results. Court the to Rates the case see in in test its future case QX of to essentially Office appealed case. rate parties Unfortunately, projected one September sign the findings you'll claiming the approve fully highly the Advocate, from is went support the XX, Chris PUC's year has a on into to and the include so action, to mentioned, Commonwealth for September This that Consumer remand effect of the needed the extends that our asked the rate more the PUC XXXX. a revenue on agreement,

situation. the with commissioners administrative We the believe based who while order nonunanimous the except it the and very and for law be we're and approve to appeal, related that monitoring appeal X-X order all the commission supported on the accounting The by to judge order. expect OCA, both closely implications settlement parties, company is sound, a the its does was not We'll process. voted supporting this on

slide. next the to on Moving

on As rates judge would law reviewed The of settlement for settlement expect an rate thus to XXXX. provide Chris administrative that East mentioned, assigned effect settlement designed into test Once is in May The this note we'll the separately, wastewater outcome excluded is being we $XX the projected reached addressed a Aqua the February. the of commission. in for February This It's this increase fully from to important million approved, then the in the case through of to of rate year we've new water Pennsylvania settlement, be rate with and the we XXXX. case and and but annualized operation. system XXXX. settlement includes a by go Whiteland case the end conclude revenue is wastewater filed from

Moving Jersey, regulated case This rate on Virginia Pennsylvania our totaling Ohio, XXXX, water include to Texas, New the segment not does next several and infrastructure discussed $XX slide. surcharges a ago. Aqua orders settled amount rate In or Illinois, states, the Carolina, million. including in moment North the Pennsylvania we for that received

million in in we Our infrastructure surcharges revenue. gas $XX just segment natural regulated $XX of for Pennsylvania annualized total approximately to in received and discussed, a totaling million, increased that also million $XXX Kentucky addition approximately the

or Ohio in infrastructure the the segment. pending pending these rate Pennsylvania rate regulated Looking in surcharges and for water cases ahead, $XXX.X revenue our Combined, Aqua cases currently is case and we Illinois million. request have settlement

infrastructure also the in spending We in have of our an gas $XXX,XXX amount segment. surcharge regulated Kentucky for

to that, With hand back Chris. the I'll mic

All right. a me about let growth. Dan, and little Thanks, bit talk

I'll operations. asset And a X equivalents XXX,XXX related X million call, in remind have customers over which federal you removed wastewater in the total Texas to EDS of all reminder DELCORA. across stay But judge states: have we that to in proceedings we've bankruptcy this all projected add the just These of a of Pennsylvania, As existing the water signed we already DELCORA purchase new Chester couple Ohio, $XXX and price. financial said and are customer or we agreements also approximately in to purchase that a continues bankruptcy on of city from impacts times, have guidance. agreements and court our

Texas. $X into Midvale, in Integra million. also network and system system of you'll and Water expected wastewater we comes is in to recently to about system of agreement Ohio. with This add price purchase our system a XXX customers acquire This acquire the deal of our to notice Milagros, about a an X,XXX with We've has to $X that about customers Now signed price Midvale network to Los water a entered the purchase with expected million. their is add village to

a customer side, continue water are of continue to robust XXX,XXX Now significant municipal couple on expansion These we recent the acquisitions although wastewater a pursuing. assuming of to of most these get we pipeline represent small we actively systems are and acquisitions them total nearly completed. potential have our will and a base, potential current that customers result in

customers Now since customer footprint. our more $XXX add us strategy XXX,XXX in million new XXXX, allowed our base over growth and to by has or to than rate equivalents acquisition

several In states, addition in great in North to growth our especially activity, seeing municipal Texas developer we're opportunities and Carolina. of

to Texas as be X are Growth been over is XX developers roughly over expected years. build years, water the deals seen to that and Really we probably owner worth years. the homes. significantly any acquisition Texas for do. past every wastewater adding mentioning. In the we've And and/or growing people utility million operator X with communities negotiated this valuable the would has as numbers, you've X last like XX,XXX

Houston most so call of the the including note Austin, and also service within Worth San Metroplex. Texas is that Antonio, of Dallas-Fort And This is areas Triangle. growing Texas, is they what rapidly territory our the

with you multiyear All our right. closing, growth let guidance. In me share and financial

You've it heard of some already.

per front reestablishing you guidance In between XXXX, to opportunities believe we and clear will of of expect a $X.XX us. promised, the $X.XX. to are be we as We it earnings share line and sight in give

in growth at have reduced. X-year not longer-term with should of is earnings weather we and this associated that again, a X%, to in place, guiding Once annual that We're normalization compounded XXXX. the mechanism does the dramatically EPS unusual a be now include through period volatility weather Importantly, X% for rate DELCORA.

investment to regulated make to look we XXXX, of years through billion. we $X.X the plan about infrastructure As next X

scheduled compound We regulated base rate of growth billion X%. spending annual XXXX, billion. at rate approximately projection previous and excludes infrastructure operate. only we currently $X.X to be includes across we water and the listed are crucial doing the include the expect in This projection remediate the to on PFAS own close our does to acquisitions the slide This Through $X.X work that to segment capital XXXX DELCORA. growth a about XXXX systems expect and on we're

rate growth at plans, annual And done, XX% by For through tell approximately amaze and in to growth our I our past base back us we that regulated X% through we work a On years our with execute projections. to excellence. growth natural and gas, and gas important base will compound look combined on X well in gas rate project of driven segment, into growth commitment their annual water rate completed of we to rate factored ability growth natural what infrastructure This the at a we not aging next the to over XXXX. we've a have the their operational compound XXXX. replacing the continues given team grow the I'll you, our we is that ongoing investments expect of pipeline continue more have decade. that's rate be opportunity basis, capital expect even on acquisition base will the to when would pipes

opportunity North of between continued strong growth, long and of because especially customer organic consolidation customer in water, customer and at believe affordable accomplished base growth the annual at X% We be the wastewater rate over Texas while We Carolina. water term average and in X% growth continue that will an rates levels. to the anticipate can grow we that we're keep our describing

regulated base customer We expect gas stable. natural to remain our

equity through through meet our metrics, raise and support program plan XXXX. multiyear we growth ATM our credit our to to Now

XXXX, $XXX to the through strong outcomes probably equity XXXX I some regulatory that's to a we years, you know us strong but expected, balance allow satisfy believe we smaller that now ATM. and our and Specifically, our maintain issue will expect million sheet do million our between than and growth that needs, approximately fund profile. the in capital about X between and we believe $XXX that, credit initiatives of

our we today. outlined sustainability we sustainability I'll providing excited about annual committed to all to we're remain as you, And in you guidance this report. tell goals just very, very our

company future and ahead. We are very optimistic that lie our about opportunities of the the

And so the forward questions. operator, questions. your for with that, I look And line open please to

comes first Your from question Julien from Instructions] Jefferies. [Operator Dumoulin-Smith

the Dan, done to Really Chris, incredible guys, CAGR EPS horse. back here, outcome whole nicely that team really on here. get

So that pivot. kudos on

that them. said, of With to guys, to lot back comments a here. come of want couple a I

the with On new fitting their want equity mean that a you am of little the how rating into -- thinking stands? about in agencies And timing do are bit, with shift and 'XX. expectations, equity you to 'XX I here? a the just 'XX between little as how reviewed seeing understand, reacting? this speak of pushing outlook there? your and with a financing out just I they bit terms want are How 'XX to about having with it think plan I potentially, to Moody's XXX

It's Yes. here. Thanks, Dan Julien.

that here quite And rating close is would we at in sync. and staying XXX 'XX. time raise out to make sure point we're in agencies we So this just put 'XX between we what that to are the

be the we and equity XXXX pick and it already that raised on up times the the of opportunity the And raise some now we -- XXX back end stood us that in to then the to noted. to advantageous ATM between August, so we gives

about that our Moody's We plan. feel good feels confident

Correct. Thanks, Chris.

earlier from dig it. Got billion to second Just subtle a kind multiyear any it of out shift equity? that Is your further. $X

or when -- we of period Really what that the over talked we we indicated as put it depending that we acquisitions approximately facts. and put $X in that before. was billion, $X had we when we would changed use billion from about said ATM pivot what a the on an place, Well, at time, and all other see X-year

equity, we if kind we're acquisitions. doing really And we're of some that hope nice raising

gives to it optionality some us So lead.

Yes, absolutely.

versus I've or heard your speak M&A you to equity sort mean right? is equity under that some thinking ex inclusive? of do you fact, core expectations to In versus acquisitions, dynamic about what because on these the the of updated want I that base

place? could know of as there line And mentioned that a you get us given you the as more I in then Is providing being Or a going this far incremental in to here sense from prescriptive time [indiscernible]. time? you're kind as that are this DELCORA hold concerned you any at

The to on judge, way declared you a federal is it purchase the of we several strong it's been on very be of not DELCORA. Chester. Yes. valid this think frustrating by asset and levels as part know, The agreement, court about enforceable. even Obviously, courts has have I city bankruptcy is

have that. And no we so control over

later And this who week. do the to Now of Water stay there Chester Court's the is ability lifted is a Authority. be the will the we believe hearing determine Supreme on that owner

influence. So we're that's on have given control, that lifted helpful. We fact need PUC to get difficult the But to the DELCORA. for to us on it's not proceedings stay in

really And and our that look so get it will won't we out RR this case have But rate if stay and onetime Commission, at reason. that so we most lifted new that it's it. base nicely get with numbers influence backed publicity any -- a we moving it that should for that remember, confident can of certainly, fit

up a in the it? could efficiently? have if call us optionality. in access to And if entirety even we ATM to place do we about to set do access to these we didn't late it had need that where we size, that to then be that we to how equity. How move we matter this we to we It really that most do legal thought this with were want put save that, deal at gives if do 'XX, we certainly, we forward, And able raise how ways of 'XX, things costs? we do use When and

at X did that there. but time add multiyear And in acquisitions program, that about what the [indiscernible] I Julien, guess, put talked the years would when contemplate have is it we we would we a out, I

So billion? what direction. Now allocating in and to if 'XX. means not were wouldn't at I That down you X you're sort of do "Are $X go 'XX to you XXXX. say, that I in I would XXX XX

said, and program, having a acquisitions we contemplates it's multiyear As room well. some it for as

last here. question And it. Got

I last think great, question. know -- it's and you As

DELCORA, As rate from respectively, is as bulk for of to here? you the -- moved of terms a that kind kind and of XX of pivot the X you in of the of delta know Is X XX, segment that composition pulling principally base the out to function the CAGR have I you water and DELCORA there gas. mix? reflected the

Yes, that is, Julien.

So DELCORA, to capital we we have follow don't either. on related have DELCORA don't

extremely we in confident As remain DELCORA have and Chris future. said, the them not plan. It's we close in will our ultimately that

comes from Chopra next question Your ISI. Durgesh from Evercore

settlement the in done. rate Congrats case. on water the Well

Just what is you maybe And can guided... Dan, that equity, on million you have $XXX clarify, issued so that year-to-date? you

August now there garbled little a the end. a given modest amount volatility. equity stock and blackout and was some issued We've price between relatively it -- just at of you Sorry, periods

but So some that we've it's amount. not million, tremendous off taken a $XXX of

it. is just That's just to The X% is midpoint, to ask. CAGR. starting Okay. that EPS Got fair? to it I all then And XXXX guidance growth X% confirm, the point wanted

XXXX that haven't yet. would I think Yes. we finished I way guess about the

our above energy EPS. assets. because of So yet we a of said, of that course, the is sale as guidance project the be final it's we've range going have don't And number to the

EPS. know the final don't we So

then XXXX this about, if it with Chris you think about X% if use X% actual that result $X.XX, you year XXXX and talked further to way, our back XXXX. guidance But range EPS you XXX, you $X.XX for the XXX, a the growth think go start you'd you EPS or get was to and can can you another back the of which calculate

insight So with how about that thinking some should provide it. we're into you

Got it.

vs the Essentially, guidance just $X.XX you EPS it's midpoint way the helpful. $X.XX. close That's Okay. to described XXXX

It like driving And That's the finally, -- based on water DELCORA looks but you I going helpful. you rate thank it's rate explaining. to just DELCORA base Okay. delta. investments that not was plus for ask just delta. future then just in that DELCORA,

basis last just the one on me question Just then. for Moody's is metric

a expect So to outlook I XXXX? out do have are just year and threshold for as you us. If early you plan. you could you expect that there to Where grade equity shake where we that negative expecting shake clarify in think or this know the are out? you about

Yes. No, great a question. it's

when at created probably and into the the things, to ultimately negative we'd in are see additional we've XX%. and got expect have yes, point. Aqua So then PNG rate resolved the cash debt XXXX, outlook flow Pennsylvania that by expect to And we'd some other cases some above XXXX

Pulling out level current our correct.

Your next Travis question comes from Miller Morningstar. from

terms were implementation answered line help question some would aid your administration, and that? timely being way the of there be guidance PFAS, with information, of necessarily of time federal questions. reconsidered, here. all to my your but maybe You the limits I the a High-level in if come appreciate most the and such. and Republican what that to are thoughts, not

off a Yes. would not backing we I anything, would on expect say, limit. if the

suggested loans there and then parts period, But was pace. for also place, to get the sued you we interest grants environmental and the as in been we on economic the pursue the the meantime, to this per compliance best a We've the above. to continue know, we that the the on in in work at to if trillion recovered. and In X So the course that have I've impacted both and low we'll stays and and continue it the least even polluters, estimate. talked stay expect to are regulators, by meet side, and our particularly our of slowing regulators current would the probably in side complete all states

there probably change terms revolving And federal slowed the the that the through terms flowing SRFs the big federal we see know, we -- In don't of a loan or through as in you what agencies, funds. money of money, state down states.

And no again, as overcome million of So call just that, a suggested. roughly fully that in invest don't expect change, guess ways here, a be will expect I matter who's funded still and today, different number to issue. the it, to elected I $XXX big PFAS we we

picture And kind helpful. That's then one Okay. bigger of acquisitions. more also on

I don't in mouth, want peer plateaued know -- but put big their of kind Your words to if acquisitions. is don't I at slowed least

on Or Clearly, big last of business on you you the slowed where kind fundamentally reaching plateaued level/low new over that water X or utilities Is a there now the in characterize hearing something year kind could the from any acquisitions or just of level? are water acquisitions. we're what side? have going if

Yes.

as the The I impact the essentially think cap, a people it which but new new essentially in formally in not it's they how Pennsylvania, cap, out figure most cap. regulation call them. a certainly, Pennsylvania, it's is case, that a will RRR is

already out, think for I they be are the that's figured renegotiated? to a in of that become everybody. across effort transactions bit have little were So trouble? can they being Do place

And And because it impact people to believe on thinking systems have sell our for a then their what's it's my X.XXx selling ultimate it will good new about, multiple. continue that from -- the those will to rate discussions impact. ongoing And who DOC believe still are We is DOC. enough also that then for we positive okay, be a and that considering what's to enough sell? me

Illinois, down in coming that in materialize really it's Pennsylvania, a think I our hopefully year positive indicate in here. other the see Ohio, the I states lull. ongoing think only that even south things not some discussions, And temporary would will So but we

Okay.

So that's said, structural in other PA, yes, but like would structural states that indicate the something in you nothing new? I understand

about good it, Yes, I Travis. feel

it we're bit a think but lull I think here, I that of nicely. will do a in recover little

David from from comes question next Sunderland Baird. Your

there. strong out Congrats quarter long-term the back on getting guidance a very and

go was if wondering a through for could Or base costs a bit a these will through those just how for handling eventually you just folded PUC similar on be and the one on the anything PFAS? if maybe about different mechanism about guys estimated is me. how rate into thoughts rate be there? process if we separated talk recovered think any costs the I Maybe could Just base?

I states think how with where there's million we're we the get be made that from a each $XXX guess start One, in we here. recovery which of the And couple the proceeds Listen, expect the Yes. considerations of let's assured we've lawsuits, I investments. to will will in the range?

the know determined that be those our an will actually this when We to in -- generally, how at And capital Or to terms be it of fully base? actual that's that come been I think those offset will commissions in But will rate be they but allocated, investment don't applied how dollars O&M? across. offset treated they'll mediation. point. want How to

that. think there various Dan, opinion happy the depending I approaches on to get But state. your on are

state, the on in of depending accounting process really have we're working very to things. and states, Davis, most deferred are toward on is our ability There these treatment

regulatory then would depreciate this So later. we we into we put them asset stall either we or depreciation, investments, the these on and balance sheet start would take recovery not for depreciation

So some that's the into typical future other approach to in recovery incorporate these in for is to deferred able things looking look accounting year. of where places we're a our mechanism

Orrill Gregg from from comes question UBS. next Your

process appeal? the people's about gas time or talk line around Could you the

an that's unusual Yes, one.

to to an And the probably paramount us. some I'll Commonwealth it a year, But a come these like any them. It moving there's but not not concern out you, it so Court. would up, over see time to play parts tell to you is don't things as -- it's And well. certainly appeal

general election in. in the for the words, running people is both is general here Pennsylvania. X attorney and running Democrat other be a new attorney attorney being general. And would a there for Attorney Republican, the Today, the In not day, existing General, race

so who by was the this hired the is general. one advocate And -- the is appealing who the attorney consumer

part another that's general be like candidates, then elected them and oe in. this of after attorney X not new place advocate we're the be would in consumer So moving

think probably factor that's would but out year period. another in I here, So play it a over

I of think probably in most to they very that takeaway the this situation OCA reman the a the the is request a important back high PUC, probability even had and X-X decision. strong the is

or really in decision will likelihood, more that the some PUC. I for maybe support from think, all So there be

to Yes, we effectively. opportunity their give of support the an document order,

Jonathan question Reeder from [Operator next Fargo. Your from Instructions] comes Wells

Or First all? the entire base perhaps be late phased increase wastewater February? at in settlement is water $XX million the effective and in is off, to it rate for

time February. will one No, implemented at that in be

February XXth. I think it's

Okay.

a gas, electric and guess a I'm just higher. the both in guidance I wasn't So that surprised TA new for little XXXX with little rates 'XX the

we original of, the EPS the you about what guidance off are that be range to headwinds can talk 'XX about So it, thinking maybe should growth $X.XX? call midpoint of

Yes. areas past. in we I in is haven't thing through we're budget seeing we are on let those. a And XXXX. you O&M one I headwinds finalizing just a touched of our but that me guess process for had the where And maybe take few having Jonathan. one couple area, -- still the We're of

One is purchased power.

an contract a we'll in multiyear And and purchase we've have to So have in power. a states end here purchased as prep prices new agreement very PJM effect. know, increased. That had you agreement for comes advantageous we have our

that facing we're headwind so go And as into XXXX. we

costs. seeing is like some example we're -- things then just another new chemicals, And

large plants PFAS-related reduce in So to an O&M haven't see activated carbon in to had expense PFAS we We're going costs our water surface chemicals. historically feed the some powder at to water. XXXX as

So probably, then the have followed costs areas. to news, And continued that's increase. you've insurance of some two

so a to are our the the of for say, to $X.XX explain range $X.XX I would headwinds help And XXXX. those that, guidance of few

X-year too, water could I helpful. was you billion That's CapEx of Great. between give a budget the gas? Okay. wondering, and breakdown $X.X if

Yes.

of course, to that a that. only And DELCORA signed So we've one is thing note out acquisitions. million taken includes $X.X of CapEx few

DELCORA for CapEx follow-on any included. not So is

say slightly but even over to -- expect I'd toward water more So the is would close but acquisitions relatively our XX-XX, that's look towards plan we $X.X we biased billion, water, toward a biases at at time, not moment. water. this it biased And bit in if

saw much But is used the issued last be that? know Pennsylvania now? drought parts I question. getting [indiscernible] the then should a water And thinking this I How right I Great. about guess concern this Okay. lower of watch. we of how I you is year. of time a the just to mean guys

-- problems unusual I happen. environmental any company. It we're against to mean great unusual listen, really this to we is that And But an us. is always were weather. concern a would Not us. conservation is guarded at heart. We're

some out own in our good mornings state. customers, have but to on And we're so our put we

But issue is either. impact. not that us. or warnings major we concern you like indicated, here would but run us that. the major there's a low water period -- -- at don't certainly, as We a consumption That's for not this and anticipate Pennsylvania anything with And high a for We're comply support we'll not an on just the warnings.

side? also on too big? supply Not revenue the be Okay. just shouldn't It but the side,

correct. that's impact Yes, We we a don't have. financial expect as

to like back for hand remarks. I'd Franklin over Chris closing to

Thank you, all you thank and for us. joining

at Haley, As Brian, calls, any and Dan available we're I follow-up always for time.

thanks for joining take us, care. and So

Thank attending you today's call. for

Have disconnect. a wonderful now may You day.