CorEnergy Infrastructure Trust Inc (CORR) 2023 Q3 法說會逐字稿

Greetings. Welcome to the CorEnergy Third Quarter 2023 Results Call. (Operator Instructions) Please note this conference is being recorded. I will now turn the conference over to your host, Matt Kreps, Investor Relations at CorEnergy, you may begin.

問候。歡迎參加 CorEnergy 2023 年第三季業績電話會議。 （操作員說明）請注意，本次會議正在錄製中。現在我將把會議轉交給主持人，CorEnergy 投資者關係部門的 Matt Kreps，您可以開始了。

Thank you, Holly. And thank you everyone for joining today's CorEnergy Infrastructure Trust conference call. With me today are Dave Schulte, CEO and Chairman; Robert Waldron, President and CFO; and Chris Huffman, our Chief Accounting Officer. Robert and Chris will provide updates on our business operations and results, and will be available for Q&A.

謝謝你，霍莉。感謝大家參加今天的 CorEnergy 基礎設施信託電話會議。今天與我在一起的有執行長兼董事長戴夫舒爾特 (Dave Schulte)；羅伯特‧沃爾德倫，總裁兼財務長；和我們的首席會計官克里斯霍夫曼。羅伯特和克里斯將提供有關我們業務運營和業績的最新信息，並將接受問答。

Earlier this morning, we've published a press release announcing our third quarter results for 2023. We expect to file our Form 10-Q later today. I would like to remind everyone that the statements made during the course of this presentation that are not purely historical, may be forward-looking statements and subject to the Safe Harbor protection available under the applicable securities laws.

今天早些時候，我們發布了一份新聞稿，宣布 2023 年第三季業績。我們預計將在今天晚些時候提交 10-Q 表格。我想提醒大家，本演示過程中所做的並非純粹歷史性的陳述，可能是前瞻性陳述，並受到適用證券法規定的安全港保護。

Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in our filings with the SEC. These Documents are available on the Investor Relations section of our website. We do not update our forward-looking statements.

我們向美國證券交易委員會提交的文件中討論了可能導致實際結果與前瞻性陳述中的結果有重大差異的重要因素。這些文件可在我們網站的投資者關係部分取得。我們不會更新我們的前瞻性陳述。

During this call, we will make reference to certain non-GAAP metrics, which are reconciled in our filings as part of our results reporting. We encourage you to review our complete disclosures, risk factors, GAAP financial numbers and those non-GAAP metrics with the related reconciliations.

在這次電話會議中，我們將參考某些非公認會計準則指標，這些指標作為我們結果報告的一部分在我們的文件中進行了核對。我們鼓勵您查看我們完整的揭露資訊、風險因素、公認會計原則財務資料和那些非公認會計原則指標以及相關的對帳。

And with that, I would like to now turn the call over to Robert Waldron. Please go ahead.

現在，我想將電話轉給羅伯特·沃爾德倫。請繼續。

Hello everyone. The third quarter came in largely as expected as we work through lower volumes and escalating expenses, which are primarily being addressed through our rate filings as well as work to improve our capital structure through the MoGas sale. I'm pleased to say that we have made progress in each of these areas, but still have work to do.

大家好。第三季的業績基本上符合預期，因為我們正在努力解決銷售下降和費用上升的問題，這些問題主要透過我們的費率備案以及透過 MoGas 銷售改善我們的資本結構來解決。我很高興地說，我們在這些領域都取得了進展，但仍有工作要做。

Starting with the sale process for MoGas and Omega, we continue to expect it -- will close around the end of the calendar year. As you may recall, our initial closing was delayed due to an additional information request from the FTC. Both CorEnergy and Spire have submitted all requested items, which puts the FTC on the clock for a decision around the end of the calendar year.

從 MoGas 和 Omega 的銷售流程開始，我們仍然預計將在今年年底左右完成。您可能還記得，由於聯邦貿易委員會 (FTC) 要求提供額外信息，我們最初的交割被推遲了。 CorEnergy 和 Spire 都已提交所有要求的項目，這使得聯邦貿易委員會必須在年底左右做出決定。

With the proceeds from the sale, we plan to deleverage our balance sheet, addressing our pending Crimson credit facility maturity in May, which will allow us to then focus on the convertible debt due in August 2025.

我們計劃利用出售所得款項對資產負債表進行去槓桿化，解決 5 月即將到期的 Crimson 信貸安排問題，這將使我們能夠專注於 2025 年 8 月到期的可轉換債務。

Our MoGas and Omega operations, which serve the St. Louis area, continue their steady performance in the third quarter. These entities are included in the proposed $175 million sale to Spire announced May 25.

我們為聖路易斯地區提供服務的 MoGas 和 Omega 業務在第三季度繼續保持穩定的業績。這些實體包含在 5 月 25 日宣布的以 1.75 億美元的價格出售給 Spire 的計劃中。

Turning to our Crimson assets, we continue to see headwinds on the volume side as the regulatory environment for the upstream has not changed. The producers in California continue to have difficulties in permitting, and it is unclear when or if that will change. The producers are finding ways to slow decline despite the lack of drilling new wells. But unless something changes, it will likely result in steeper volume declines over the next decade compared to the last three decades.

談到我們的 Crimson 資產，由於上游的監管環境沒有改變，我們繼續看到成交量方面的阻力。加州的生產商在獲得許可方面仍然存在困難，目前還不清楚這種情況何時或是否會改變。儘管缺乏新井鑽探，生產商仍在尋找減緩產量下降的方法。但除非發生什麼變化，否則與過去三十年相比，未來十年可能會導致銷售量大幅下降。

On a positive note, we did see new volumes as a result of the pending P66 refinery conversion to renewable refined products. November nominations on SPB were approximately 15,000 barrels a day higher than the nine month historical average in '23. The P66 refinery isn't scheduled to officially convert until Q1 2024. So we can't draw any long-term conclusions on one month data, but it is a positive data point.

從積極的方面來看，由於 P66 煉油廠即將轉換為可再生精煉產品，我們確實看到了新的產量。 SPB 11 月的提名量比 2023 年 9 個月的歷史平均值高出約 15,000 桶/日。 P66 煉油廠預計要到 2024 年第一季才會正式轉產。因此，我們無法根據一個月的數據得出任何長期結論，但這是一個積極的數據點。

The volumes over the next six to nine months on SPB and KLM could experience material volatility as the California crude oil supply chain adjusts to a California refining complex without P66 Rodeo. Crimson like the rest of the world has experienced cost escalations in virtually every expense category, given the extraordinary inflationary pressures over the last two years.

隨著加州原油供應鏈適應沒有 P66 Rodeo 的加州煉油廠，SPB 和 KLM 未來六到九個月的交易量可能會出現重大波動。鑑於過去兩年巨大的通膨壓力，與世界其他地區一樣，Crimson 幾乎所有支出類別都經歷了成本上漲。

However, there are three expense categories which have increased well above inflation, maintenance, electricity and interest expense. While I don't anticipate the interest rate to continue to move higher from here. Our maintenance and electricity costs are anticipated to continue their upward trajectory into 2024 and potentially beyond.

然而，維護費用、電費和利息費用這三類費用的增幅遠高於通貨膨脹。雖然我預計利率不會繼續走高。我們的維護和電力成本預計將繼續呈上升趨勢，直至 2024 年甚至更久。

The California State fire marshal has increased focused on crude oil pipelines, which has resulted in higher interest expenses in 2023 and likely higher yet in '24. All of the new requirements are reasonable and result in safer and more efficient operations. So we're glad to comply.

加州消防隊長更加關注原油管道，這導致 2023 年利息支出增加，2024 年利息支出可能還會更高。所有新要求都是合理的，可以實現更安全、更有效率的營運。所以我們很高興遵守。

The reason for higher electrical expense is the per unit electricity rates charged by California electric, electric utilities has dramatically increased and is expected to continue to increase as they support the energy transition and also address general grid safety around fire hazards.

電費上漲的原因是加州電力公司收取的單位電費大幅增加，並且預計將繼續增加，因為它們支持能源轉型，並解決了圍繞火災危險的一般電網安全問題。

As a regulated utility, Crimson should be able to adjust tariffs to overcome these higher costs. However, the rate-setting process is too slow to accommodate the speed of change. We have seen in these expenses and also volumes over the last one to two years.

作為一家受監管的公用事業公司，Crimson 應該能夠調整電價以克服這些較高的成本。然而，利率設定過程太慢，無法適應變化的速度。我們已經看到了過去一到兩年的這些支出和數量。

As a result, this week, SPB and KLM will file a request for an acceleration of the pending rate, the tariff increases previously requested on those systems. The filing requests an immediate tariff increase of 23 point -- 24.3% on SPB, and 27.6% on KLM. This filing does not increase the previously requested total tariff increases, but rather just accelerates them to help eliminate the current negative cash flows.

因此，本週，SPB 和 KLM 將提出加快待定費率的請求，即先前在這些系統上請求的關稅增加。該文件要求立即將 SPB 關稅提高 23 個百分點，將 KLM 關稅提高 27.6%。該文件並沒有增加先前要求的總關稅增加，而只是加速關稅增加，以幫助消除當前的負現金流。

The timing of the response from the CPUC is unknown, but the company is hopeful for a Q1 2020 resolution at the latest. Our filing simply says that Crimson has operated with negative cash flows in 2023, which will likely spill over into 2024 and is not fair that the Crimson shareholders have to fund the cash flow gap.

CPUC 的回應時間尚不清楚，但該公司希望最遲能在 2020 年第一季做出解決方案。我們的文件只是說，Crimson 在 2023 年的經營現金流為負，這可能會蔓延到 2024 年，而且 Crimson 股東必須為現金流缺口提供資金，這是不公平的。

The shipper should pay for these increased expenses to safely operate the pipeline, which is critical for their business. While this type of request is not frequently granted by the CPUC. I believe we are on the right side of the facts on this one.

托運人應支付這些增加的費用以安全營運管道，這對其業務至關重要。雖然這種類型的請求並不經常得到 CPUC 的批准。我相信在這一點上我們站在事實的正確一邊。

We continue to see promising opportunities and energy transition, which are expected to contribute positive cash flow in three to five years. However, our primary focus in the near term is selling MoGas and Omega, addressing our capital structure and restoring Crimson to profitability.

我們繼續看到有希望的機會和能源轉型，預計將在三到五年內貢獻正現金流。然而，我們近期的主要重點是出售 MoGas 和 Omega，解決我們的資本結構問題並恢復 Crimson 的獲利能力。

With that, I'll turn it over to Chris to address the financials and other notable items.

有了這個，我將把它交給克里斯來解決財務和其他值得注意的問題。

Thanks, Robert. Similar to last quarter with the sale of MoGas and Omega pending, I will address Crimson results, then corporate and noteworthy balance sheet items. Crimson transported volumes decreased in Q3, however, that reduce was offset by the impact of rate increases on our Southern California pipeline and favorable PLA results to generate a slight increase in transportation and distribution revenue quarter-over-quarter.

謝謝，羅伯特。與上季 MoGas 和 Omega 待售的情況類似，我將討論 Crimson 業績，然後是公司和值得注意的資產負債表項目。 Crimson 第三季的運輸量有所下降，但這一減少被南加州管道費率上漲的影響以及 PLA 的有利業績所抵消，運輸和分銷收入環比略有增長。

Crimson volumes remain below historical levels and natural decline rates continue to be affected by new limitations on California drilling permits and low development activity. I should also note that the previous quarter included $7 million in PLA sales, which was unusually high compared to historical trends as Crimson was reducing PLA inventory levels during that quarter.

深紅色產量仍低於歷史水平，自然遞減率繼續受到加州鑽探許可證新限制和低開發活動的影響。我還應該指出，上一季的 PLA 銷售額為 700 萬美元，與歷史趨勢相比，這一數字異常高，因為 Crimson 在該季度減少了 PLA 庫存水準。

The $4 million PLA sales during the third quarter are representative of more normal sales levels. These PLA barrels are reflected within transportation revenue in the quarter. They are earned regardless of the quarter in which they're sold.

第三季 400 萬美元的 PLA 銷售額代表了更正常的銷售水平。這些解放軍桶反映在本季的運輸收入中。無論它們是在哪個季度出售的，它們都會被賺取。

As a reminder on our progress on implementing tariff increases, Robert previously mentioned. As of the end of the third quarter, we are collecting 21% of our requested 35% total rate increase on our Southern California pipeline system, 10% of our requested 36% total rate increase on our SPB system and 10% of our requested 128% total rate increase on our tail end system.

羅伯特之前提到，為了提醒我們在實施關稅上調方面取得的進展。截至第三季末，我們正在收取南加州管道系統35% 總費率上漲請求中的21%、SPB 系統36% 總費率上漲請求中的10% 以及128 管道系統所請求的36% 總費率上漲中的10%。我們尾端系統的總成長率百分比。

During the fourth quarter, we will implement an additional 10% increase on our tail end system. And during the first quarter of 2024, we will implement an additional 10% increase on our SPB system, if our request for accelerated rate increases is not granted. The full benefit of the 21% rate increase for [SoCal] and 10% rate increases on SPB and KLM are included in the financial results for the quarter. The requests are subject to refund, if found not to be earned.

第四季度，我們將在尾端系統上額外增加 10%。如果我們加速升息的請求未獲批准，我們將在 2024 年第一季對 SPB 系統實施額外 10% 的升息。 [SoCal] 加息 21% 以及 SPB 和 KLM 加息 10% 的全部收益均包含在本季度的財務業績中。如果發現未獲得該請求，則可以退款。

Turning to the cost side, the full implementation and benefit of our previously announced cost reduction initiatives are evident in the company's third quarter results, with general administrative costs down approximately $800,000 quarter-over-quarter. These savings were already included in our 2023 outlook and rate case filings.

談到成本方面，我們先前宣布的成本削減計劃的全面實施和效益在公司第三季度的業績中顯而易見，一般管理成本環比下降了約 80 萬美元。這些節省的費用已包含在我們的 2023 年展望和費率案例備案中。

Even with these cost reductions, we believe Crimson's cost of service fully justifies all requested increases and we have defended our costs inside the formal CPUC process. I might note that as a publicly traded company, our shippers are aware of our costs and we believe the protest on our rate cases will only succeed in delaying not avoiding the implementation of requested tariffs.

即使有了這些成本降低，我們相信 Crimson 的服務成本完全證明了所有要求的增加是合理的，並且我們在正式的 CPUC 流程中為我們的成本辯護。我可能會指出，作為一家上市公司，我們的托運人了解我們的成本，我們相信對我們的費率案例的抗議只會成功地推遲而不是避免所要求的關稅的實施。

As part of our rate application process, we have requested retroactive application of our rates. And as a result, shipper motivation to delay may be reduced since their litigation costs are not recoverable. We continue to evaluate whether the requested rate cases once fully implemented will be enough to bring us back to earning our cost of service, given the uncertainty around SPV and KLM volumes and the expense escalation we have seen since the filing the initial rate cases.

作為費率申請流程的一部分，我們已要求追溯應用我們的費率。因此，托運人拖延的動機可能會降低，因為他們的訴訟費用無法收回。鑑於 SPV 和 KLM 數量的不確定性以及自提交初始費率案件以來我們看到的費用上升，我們將繼續評估所要求的費率案件一旦完全實施，是否足以讓我們重新賺取服務成本。

We expect to have more clarity on SPV and KLM volumes post the P66 refinery conversion as well as a finalize our 2024 and beyond forecast in light of the escalating electrical and maintenance expenses. At the end of the day, Crimson is a regulated entity and should expect to earn a reasonable return on its capital, but the regulatory process was not designed for the highly dynamic environment. We have found ourselves in over the last one to two years.

我們預計 P66 煉油廠改造後 SPV 和 KLM 的產量將更加清晰，並鑑於電力和維護費用不斷上升，最終確定 2024 年及以後的預測。歸根結底，Crimson 是一個受監管的實體，應該期望獲得合理的資本回報，但監管流程並不是為高度動態的環境而設計的。在過去的一到兩年裡，我們發現自己陷入了困境。

For the three months ended September 30, we had adjusted EBITDA of $4.8 million and adjusted net loss of $3.3 million. Our adjusted EBITDA was insufficient to cover both maintenance capital expenditures and accrued interest expense during the quarter. The Board evaluated these results and agreed with management's recommendation to continue the suspension of dividends on both our Series A preferred and common equity.

截至 9 月 30 日的三個月，我們調整後的 EBITDA 為 480 萬美元，調整後的淨虧損為 330 萬美元。我們調整後的 EBITDA 不足以支付本季的維護資本支出和應計利息費用。董事會評估了這些結果，並同意管理層的建議，繼續暫停 A 系列優先股和普通股的股息。

As a reminder, CorEnergy 7.375% Series A Cumulative Redeemable Preferred Stock will accrue dividends during any period in which dividends are not paid. Any accrued Series A Cumulative Redeemable Preferred Dividends must be paid prior to the company resuming common dividend payments.

提醒一下，CorEnergy 7.375% A 系列累積可贖回優先股將在不支付股息的任何期間累積股息。任何應計 A 系列累計可贖回優先股股息必須在公司恢復普通股息支付之前支付。

Although no cash payments are made on the preferred stock, the company has included the effects of accumulative unpaid dividends in the financial statements. The Board will continue to evaluate dividend each quarter, making the decision on dividend payment based upon the most current data available.

儘管沒有對優先股支付現金，但該公司已將累計未支付股息的影響納入財務報表。董事會將繼續評估每季的股息，並根據最新可用數據做出股息支付的決定。

We're focused on implementing our requested rate increases and completing the MoGas sale in order to deleverage the company and mitigate the associated financial risks we face. These risks and mitigants are disclosed in our third quarter 10-Q, which will be filed later today.

我們的重點是實施我們所要求的升息並完成 MoGas 的銷售，以降低公司的槓桿率並減輕我們面臨的相關財務風險。這些風險和緩解措施將在我們將於今天稍後提交的第三季 10-Q 報告中揭露。

Regarding our outlook, which includes the results of MoGas and Omega, we are maintaining our full year 2023 adjusted EBITDA range of $24 million to $26 million, inclusive of maintenance expense in the range of $9 million to $10 million. Maintenance capital expenditures expect to now be in the range of $11.5 million to $12.5 million. These costs are not expected to be uniform throughout the year due to project timing, which has resulted in the back half of 2023 bearing the majority of these costs.

關於我們的前景（包括 MoGas 和 Omega 的業績），我們將 2023 年全年調整後 EBITDA 維持在 2,400 萬美元至 2,600 萬美元的範圍，其中包括 900 萬美元至 1,000 萬美元的維護費用。維護資本支出目前預計在 1,150 萬美元至 1,250 萬美元之間。由於專案時間安排，這些成本預計全年不會保持一致，導致 2023 年下半年承擔大部分成本。

While not yet providing our 24 outlook, our comments reflect the cash flow uncertainty we face as we enter our 2024 budgeting process.

雖然尚未提供我們的 24 年展望，但我們的評論反映了我們在進入 2024 年預算流程時面臨的現金流不確定​​性。

At this time, we will take questions from our covering analysts or institutional stockholders before closing the call.

目前，我們將在結束電話會議之前回答我們的分析師或機構股東的問題。

Certainly. At this time we will be conducting a question and answer session. (Operator Instructions) Your first question for today is coming from Selman Akyol at Stifel.

當然。此時我們將進行問答環節。 （操作員說明）今天您的第一個問題來自 Stifel 的 Selman Akyol。

Thank you. Good morning.

謝謝。早安.

Good morning, Selman.

早上好，塞爾曼。

So, in this quarter, you guys had, I guess, transaction expenses $[900] to $1 million and I guess all that would be related to MoGas. And I guess going forward, do you still see of that, as it relates to, I guess, trying to get approval and get all sign off or should we expect that to come down pretty materially?

所以，在這個季度，我猜你們的交易費用是 [900] 到 100 萬美元，我猜所有這些都與 MoGas 有關。我想，展望未來，你是否仍然看到這一點，因為它涉及到，我想，試圖獲得批准並獲得所有簽字，還是我們應該期望這會大幅下降？

I'll take that, I think the bulk of the FTC work for us was largely done in the third quarter there. It was a little spillover, probably in the first to the fourth quarter, but it should -- that expense should be down significantly from third.

我認為，聯邦貿易委員會為我們所做的大部分工作主要是在第三季完成的。這是一個小小的溢出效應，可能是在第一季到第四季度，但它應該——該費用應該比第三季大幅下降。

And then is it more now on Spire's end or give us any additional colour you got there.

那麼現在是在尖塔的一端嗎？或給我們任何額外的顏色。

Yes, it's some it really is everything is in and certified, and it's in the FTC's hands right now.

是的，確實是所有東西都在其中並經過認證，而且現在就在聯邦貿易委員會的手中。

Okay. And then you guys talked about the fire marshal and additional regulations. Do you guys see more of that coming as we go into '24? is it just kind of like an ever increasing tightness? Or is it you think you've pretty much complied with everything and you're done.

好的。然後你們談到了消防隊長和其他規定。當我們進入 24 世紀時，你們會看到更多這樣的事發生嗎？是不是有點像越來越緊張？或者你認為你已經幾乎遵守了所有要求並且你已經完成了。

Yeah. So everything that we know of -- We think we've gotten our arms around, understand the requirements. It's very specific areas, not just specific to Crimson, it's crude oil pipelines in California. But it's things like corrosion under insulation on insulated pipes, long seam welded pipes, which you have a history of potentially having issues, idle lines and how to deal with them make sure that they're properly idled.

是的。因此，我們所知道的一切——我們認為我們已經全力以赴，並了解了需求。這是非常具體的區域，不僅是 Crimson 特有的，而且是加州的原油管道。但是，諸如絕緣管道、長縫焊接管道的絕緣層下的腐蝕之類的問題，這些管道都有可能出現問題的歷史，閒置的管線以及如何處理它們以確保它們適當閒置。

And then also around facilities that normally don't have the typical inspections like it, smart pigging or in-line inspections, just a little heightened awareness and scrutiny around those assets and pipeline. All of those things, as I mentioned, are great and they're the right thing to be doing, operated in California.

然後，對於通常沒有像智慧清管或在線檢查這樣的典型檢查的設施，只需稍微提高對這些資產和管道的認識和審查。正如我所提到的，所有這些事情都很棒，而且是在加利福尼亞州開展的正確的事情。

And we've been working with the fire marshal, I'd say over the last year so to understand what is required of us on a go-forward basis. And I think we pretty much have that figured out now and it will be we'll have a lot more detail in our 2024 outlook.

我想說，去年我們一直在與消防隊長合作，以便了解我們未來需要做什麼。我認為我們現在已經基本弄清楚了這一點，我們將在 2024 年展望中提供更多細節。

But we've been facing those expenses. They've been rolling in through '23 as we work through those different areas of focus. And I'd also say that the fire marshal is just more focused in general on post COVID, they significantly increase their staffing levels. And I just they're -- that we have more audits and higher level of scrutiny on the operations, and that is reflected in higher maintenance expenses.

但我們一直在面臨這些費用。當我們致力於這些不同的重點領域時，它們一直在 23 年不斷湧現。我還想說，消防隊長總體上更加關注新冠疫情後的情況，他們顯著增加了人員配備水準。我只是說——我們對營運進行了更多的審計和更高水準的審查，這反映在更高的維護費用上。

Got it. And that's where it is going to -- I guess, the uptick in maintenance expense, that's all related to this.

知道了。這就是它的發展方向——我想，維護費用的增加，都與此有關。

Exactly. I mean, it's -- there's obviously some general expenses escalation that we see. But generally, the increase in '23 was due to some of these initiatives by the fire marshal and increased activity, and we expect to see that spill over into '24 and the 20 and our 24 outlook.

確切地。我的意思是，我們顯然看到了一些一般費用的上升。但總的來說，23 年的成長是由於消防隊長的一些舉措和活動的增加，我們預計這種情況會蔓延到 24 年、20 年以及我們對 24 年的展望。

Got it. And then just the last one for me. In terms of sort of the accelerated filing on the pending rate cases. I think you alluded in your comments and I just missed it. So it doesn't go on Crimson on the SPB system, that will get you your the remaining 26% of the tariff increase that you've asked for and then something less on the KLM system of the remaining 107%.

知道了。然後是我的最後一個。就待決案件的加速歸檔而言。我想你在評論中提到了，但我只是錯過了。因此，SPB 系統上的 Crimson 不會繼續運行，這將為您提供您所要求的剩餘 26% 的關稅增加，然後在 KLM 系統上減少剩餘 107% 的關稅增加。

Exactly. So it takes SPB to the full rate and then KLM, if we didn't double the rate on KLM, we took at something slightly higher but not to the full ask. And there is going to be or we recommended that there is an adjustment period in the summer of f'24, just in case depending on where volumes go and depending on where expenses go. But what we're really trying to solve for with this bringing forward of what we think are the right rates on the system instead of waiting for the rate case to be resolved is to really reduce the cash burn on the Crimson assets.

確切地。因此，首先是 SPB 達到全額費率，然後是 KLM，如果我們沒有將 KLM 費率加倍，我們會採取稍高一些的價格，但不會達到全額要求。我們建議在 2024 年夏天有一個調整期，以防萬一，這取決於銷售量的走向和費用的走向。但我們真正想要解決的問題是，透過在系統上提出我們認為正確的利率，而不是等待利率案例來解決，真正減少 Crimson 資產的現金消耗。

Now we've asked for retroactive treatment on our rate cases, so that would come back and [put]. We be able to collect all that negative cash flow that we incurred while we waited for the rate increases. But we just feel like it's just too much. And given where the company is and what we're trying to do, it's a reasonable request and we feel like it should be granted. And it has -- I think there's been three cases that have received approval for situations like this. And I think our fact pattern is right in the bull's eye.

現在我們已要求對我們的費率案例進行追溯處理，以便返回並[放置]。我們能夠收回在等待升息期間產生的所有負現金流。但我們只是覺得太多了。考慮到公司的定位和我們正在努力做的事情，這是一個合理的請求，我們認為應該獲得批准。我認為已經有三個案例在此類情況下獲得了批准。我認為我們的事實模式是正確的。

Got it. And then how long will it take them to either say yes or no.

知道了。然後他們需要多長時間才能說“是”或“否”。

It's hard to say. We've been -- it's been challenging to predict CPC timelines as you can -- we've all lived through the change of control process. We think -- look the CPC doesn't want a utility to struggle as they -- the utility should be earning a reasonable cost of capital, certainly not be negative cash flow. So we're optimistic that it will garner the attention of the CPUC and they'll respond in an expedited manner.

很難說。盡可能預測每次點擊費用時間表是一項挑戰，我們都經歷過控制流程的變化。我們認為——看起來中國共產黨不希望公用事業公司像他們一樣陷入困境——公用事業公司應該賺取合理的資本成本，當然不能是負現金流。因此，我們樂觀地認為，這將引起 CPUC 的關注，他們會迅速回應。

But it just this is kind of -- it's not unprecedented, but it's just not a very well-trodden path. And so it's hard to predict the timing, but we would -- we're obviously going to do everything to get it in front of the commissioners or the ALJs. So they are aware of the situation, explain it, and we think it will gain traction, but timing is very difficult to estimate.

但這只是一種——這並不是史無前例的，但它只是不是一條廣為人知的道路。因此很難預測具體時間，但我們顯然會盡一切努力將其提交給委員或行政法官。因此，他們意識到了這種情況，並對其進行了解釋，我們認為它將獲得關注，但時間很難估計。

Okay.

好的。

But I will say one thing about that is the Southern California rate case, and that's why we did included in this request is we expect that to be resolved in Q1 '24 and San Pablo case and KLM, which is now combined, we expect that to be resolved Q4 '24 or maybe Q1 '25, the latest.

但我要說的一件事是南加州費率案件，這就是我們確實納入此請求的原因是我們希望在 24 年第一季度得到解決，聖巴勃羅案件和荷航現在已合併，我們預計最遲在24 年第4 季或25 年第1 季解決。

And so that's why we think it should be resolved this immediate acceleration should be resolved in short order, in the order of months because of the total rate case is going to get resolved in, let's call it 12 months, 12 months to 14 months from now. And so it should be acted upon pretty quickly.

這就是為什麼我們認為應該解決這個問題，立即加速應該在短時間內解決，大約幾個月，因為總費率情況將在 12 個月內解決，12 個月到 14 個月現在。因此應該很快採取行動。

All right. Thank you very much.

好的。非常感謝。

Thanks, Selman.

謝謝，塞爾曼。

We have reached the end of the question-and-answer session, and I will now turn the call over to Robert for closing remarks.

問答環節已經結束，我現在將會議轉交給羅伯特致閉幕詞。

Thank you for joining us today. We are diligently working to resolve our current challenges and will provide updates as appropriate. I want to thank our team for the hard work and dedication this year. Our MoGas and Omega team has remained focused on maintaining efficient and safe operations throughout the divestiture process.

感謝您今天加入我們。我們正在努力解決當前的挑戰，並將酌情提供更新。我要感謝我們的團隊今年的辛勤工作和奉獻。我們的 MoGas 和 Omega 團隊始終致力於在整個剝離過程中保持高效和安全的運作。

While our Crimson team has really stepped up after the senior management changes earlier this year. It's an honour to work with such a dedicated and professional group of people, including our corporate group. Please contact our IR team if you'd like to arrange a meeting time. Have a great day.

今年早些時候高階管理層變動後，我們的 Crimson 團隊確實得到了提升。很榮幸能與如此敬業且專業的團隊（包括我們的企業團隊）一起工作。如果您想安排會面時間，請聯絡我們的 IR 團隊。祝你有美好的一天。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。