California Water Service Group (CWT) 2024 Q2 法說會逐字稿

Thank you for standing by. I will be your conference operator today. At this time, I would like to welcome everyone to the California Water Service Group Q2 2024 Earnings Call. (Operator Instructions) Thank you.

謝謝你的支持。今天我將擔任你們的會議操作員。此時此刻，我謹歡迎大家參加加州供水服務集團 2024 年第二季財報電話會議。（操作員說明）謝謝。

I would now like to turn the call over to James Lynch, Senior Vice President, CFO and Treasurer. Please go ahead.

我現在想將電話轉給高級副總裁、財務長兼財務主管詹姆斯·林奇 (James Lynch)。請繼續。

Thank you. Welcome, everyone, to our second quarter 2024 results call for California Water Service Group. With me today is Martin Kropelnicki, our Chairman and CEO; and Greg Milleman, Vice President of rates and regulatory affairs a replay dial-in information for this call can be found in our quarterly results earnings release, which was issued earlier today the replay will be available until September 30, 2024.

謝謝。歡迎大家參加我們的加州水務集團 2024 年第二季業績電話會議。今天與我在一起的是我們的董事長兼執行長 Martin Kropelnicki；費率和監管事務副總裁 Greg Milleman 表示，本次電話會議的重播撥入資訊可以在我們今天稍早發布的季度業績收益報告中找到，重播將持續到 2024 年 9 月 30 日。

As a reminder, before we begin, the company has a slide deck to accompany today's earnings call. The slide deck was furnished with an 8-K and is also available at the company's website at www.calwatergroup.com.

提醒一下，在我們開始之前，該公司有一個幻燈片來配合今天的財報電話會議。滑梯配有 8-K，也可在公司網站 www.calwatergroup.com 上取得。

Before looking at second quarter 2024 results, I'd like to take a few moments to cover forward-looking statements during the course of the call, the company may make certain forward-looking statements because these statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the company's current expectations.

在查看 2024 年第二季業績之前，我想花一些時間在電話會議期間討論前瞻性陳述，公司可能會做出某些前瞻性陳述，因為這些陳述涉及未來事件，它們受到存在各種風險和不確定性，實際結果可能與公司目前的預期有重大差異。

As a result, the company strongly advises all current shareholders as well as interested parties to carefully read and understand the company's disclosures on risks and uncertainties found in our Forms 10-K, 10-Q, press releases and other reports filed from time to time with the Securities and Exchange Commission.

因此，公司強烈建議所有現有股東以及利益相關者仔細閱讀和理解公司在我們的 10-K、10-Q 表格、新聞稿和其他不時提交的報告中披露的風險和不確定性與證券交易委員會。

I will now turn the call over to Marty to start this off.

我現在將把電話轉給馬蒂來開始。

Thank you, Jim. Good morning, everyone. Thanks for joining us here today. It's been a busy quarter, and we have a number of items we want to update you on today. First, I'm going to ask Jim to give you an update on our financial performance for the quarter. And I'll just lead into that by saying what a difference a year makes.

謝謝你，吉姆。大家早安。感謝您今天加入我們。這是一個忙碌的季度，今天我們有許多項目想要向您通報最新情況。首先，我將請吉姆向您介紹我們本季財務表現的最新情況。我將透過說一年所帶來的改變來引導這一點。

Last year, no rate relief this year, hitting the 21 rate case some concluded and, on the books, has made a big difference. Also ask Jim to include some of the highlights of our capital program for 2024 Infrastructure Improvement Plan.

去年，今年沒有任何利率減免，達到了一些人得出的21個利率案例，並且在帳面上，已經產生了很大的變化。另請 Jim 介紹我們 2024 年基礎設施改善計畫資本計畫的一些亮點。

We have Greg Milleman here today to talk about the filing of the 2024 General Rate Case and Infrastructure Improvement Plan for the State of California. This covers our capital forecast for the State of California for years 2025 to 2027. I want to spend a little bit of time talking about the recent California Supreme Court decision that protects water utilities rights to do process and preserves the decoupling.

今天，格雷格·米勒曼 (Greg Milleman) 在此談論加州 2024 年一般費率案例和基礎設施改善計劃的提交事宜。這涵蓋了我們對加州 2025 年至 2027 年的資本預測。我想花一點時間談談加州最高法院最近的裁決，該裁決保護水務公司進行處理的權利並保持脫鉤。

Spend some time talking about emergency response. If you watch the fires in California, it's been a very busy fire season so far this year. So we want to give you an update on the current fires as well as our community outreach efforts to continually improve our processes, which will help first responders spike fires.

花一些時間討論緊急應變。如果你觀察加州的火災，你會發現今年到目前為止是一個非常繁忙的火災季節。因此，我們希望向您提供有關當前火災的最新信息，以及我們的社區外展工作，以不斷改進我們的流程，這將有助於急救人員撲滅火災。

Give an update on the PFAS and the ongoing remediation activities the company has plans for the next three years give you an update on our business development activities and what's going on there. And we conclude talking about ESG and our recent ESG report that was published in May.

提供有關 PFAS 的最新資訊以及公司計劃在未來三年內進行的補救活動，讓您了解我們業務發展活動的最新情況以及正在發生的情況。我們最後討論了 ESG 以及我們最近在 5 月發布的 ESG 報告。

So before giving you the operational update, I'm going to turn it back over to Jim to give you an update on the financial results for the quarter year-to-date. Jim?

因此，在向您提供最新營運情況之前，我將把它轉回給吉姆，讓您了解本季度迄今為止的財務業績的最新情況。吉姆？

Thanks, Marty, as Marty, mentioned, our Q2 2024 financial results benefited from new rates and the rate structure authorized in our 2021 California GRC.

謝謝，馬蒂，正如馬蒂所提到的，我們 2024 年第二季度的財務業績受益於我們 2021 年加州 GRC 中授權的新費率和費率結構。

In addition, since Q2 2023, our return on equity increased to 10.27% under our water cost of capital mechanism adjustment, and we benefited from water production offsets and other advice letter filings as a result, our operating revenue for the quarter increased 25.9% to $244.3 million compared to our prior year Q2 operating revenue of $194 million. Reported net income for the quarter was $40.6 million or $0.70 per diluted share compared to $9.6 million or $0.17 per diluted share in Q2 2023.

此外，自2023年第二季以來，在水資本成本機制調整下，我們的股本回報率提高至10.27%，並且受益於產水抵銷和其他建議函備案，本季營業收入增長25.9%至2.443 億美元，而去年第二季的營業收入為1.94 億美元。本季報告的淨利潤為 4,060 萬美元，即稀釋後每股收益 0.70 美元，而 2023 年第二季為 960 萬美元，即稀釋後每股收益 0.17 美元。

The quarter-over-quarter growth was driven primarily by a $19.3 million increase in rates billed to customers as authorized in our regulatory filings, an increase in accrued unbilled revenue of $10.4 million due to higher rates and an increase in the number of unbilled days and the recognition of $8.2 million in accrued WRAM revenues and $7.9 million in accrued WRAM revenues.

季度環比增長的主要原因是，根據我們的監管文件授權，向客戶收取的費率增加了 1,930 萬美元，由於費率提高以及未開票天數的增加，應計未開票收入增加了 1,040 萬美元，以及確認820 萬美元的應計WRAM 收入和790 萬美元的應計WRAM 收入。

As a reminder, our 2021 GRC was adopted in Q1 of 2024 and included 2023 interim rate relief, which totaled $64 million. $18.7 million of the interim rate relief was attributable to Q2 of 2023. Q2 2024 operating expenses were $196.1 million compared to Q2 2023 operating expenses of $178.1 million. The $18 million increase was primarily driven by $6.8 million in higher water production costs and $8.4 million in higher income tax expenses related to higher pretax earnings.

提醒一下，我們的 2021 年 GRC 於 2024 年第一季通過，其中包括 2023 年中期利率減免，總額為 6,400 萬美元。 1,870 萬美元的臨時利率減免來自 2023 年第二季。2024 年第二季的營運費用為 1.961 億美元，而 2023 年第二季的營運費用為 1.781 億美元。增加 1800 萬美元主要是由於水生產成本增加 680 萬美元，以及與稅前收益增加相關的所得稅費用增加 840 萬美元。

The impact of the Q2 2024 activity on diluted earnings per share is presented in the Q2 2023 to Q2 2024 diluted earnings per share bridge on Slide 6. The more significant earning drivers were the 2021 GRC rate increases and increases in accrued revenue, which contributed $0.23, $0.26 and $0.14, respectively, to diluted earnings per share these drivers were partially offset by increases in water production expenses of $0.09 per diluted share and other factors that netted to a $0.01 per diluted share.

投影片 6 中的 2023 年第二季至 2024 年第二季稀釋每股收益橋介紹了 2024 年第二季活動對稀釋每股盈餘的影響。更重要的獲利驅動因素是2021 年GRC 利率上漲和應計收入增加，分別為攤薄每股收益貢獻0.23 美元、0.26 美元和0.14 美元，這些驅動因素被每股稀釋每股收益0.09 美元的水生產費用增加和其他費用部分抵銷。

Our year-to-date 2024 results benefited from the same regulatory outcomes as our quarterly results. In addition, recall that in Q1 2024, we recorded benefits related to the California extended water arrearages Payment Program, or EWA. This enabled us to decrease the deferral period of WRAM and MCBA revenue and expenses.

我們 2024 年迄今的業績受惠於與季度業績相同的監管結果。此外，請回想一下，在 2024 年第一季度，我們記錄了與加州延長水費拖欠付款計劃 (EWA) 相關的福利。這使我們能夠縮短 WRAM 和 MCBA 收入和支出的遞延期。

Our 2024 year-to-date operating revenue increased 58.4% to $515 million compared to 2023 year-to-date revenue of $325.1 million. Year-to-date 2024 net income was $110.5 million or $1.90 per diluted share compared to 2023 year-to-date net loss of $12.7 million or $0.23 per diluted share.

與 2023 年年初至今的收入 3.251 億美元相比，我們 2024 年年初至今的營業收入成長了 58.4%，達到 5.15 億美元。 2024 年至今淨利潤為 1.105 億美元，即稀釋後每股 1.90 美元，而 2023 年迄今的淨虧損為 1,270 萬美元，即稀釋後每股 0.23 美元。

The year-to-date growth was driven primarily by cumulative rate increases from the 2021 general rate case of $131.5 million, $31.6 million in rate increases billed to customers and the recognition of $16 million in previously deferred RAM revenue as a result of securing the EWA funds for the payment of eligible customer balances.

年初至今的成長主要是由於 2021 年一般費率情況下的累積費率上漲 1.315 億美元、向客戶收取的費率上漲 3,160 萬美元以及因獲得 EWA 而確認先前遞延的 RAM 收入 1,600 萬美元用於支付合格客戶餘額的資金。

Year-to-date, 2024 operating expenses were $389 million compared to 2023 year-to-date operating expenses of $326.7 million. The $62.3 million increase was primarily driven by increased water production costs of $16 million that included $9.2 million related to the incremental cost balancing account or ICBA. The ICBA is a new water cost recovery mechanism authorized in the 2021 GRC.

2024 年迄今的營運支出為 3.89 億美元，而 2023 年迄今的營運支出為 3.267 億美元。6,230 萬美元的成長主要是由於水生產成本增加了 1,600 萬美元，其中包括與增量成本平衡帳戶 (ICBA) 相關的 920 萬美元。ICBA是2021年GRC授權的新水費回收機制。

We also recognized $13.6 million in deferred costs associated with the recognition of deferred RAM revenue and year-to-date income tax increased $29.5 million due to higher pretax earnings. The impact of the year-to-date 2024 activity on diluted earnings per share is presented in the year-to-date 2020 year-to-date 2023 to 2024 diluted earnings per share bridge on Slide 8. The more significant earnings drivers are the 2021 general rate case, rate increases and the decrease in deferred RAM revenue, which contributed $1.82, $0.44 and $0.22, respectively, to diluted earnings per share.

我們也確認了與確認遞延 RAM 收入相關的 1,360 萬美元遞延成本，並且由於稅前收益增加，年初至今所得稅增加了 2,950 萬美元。幻燈片 8 上的 2020 年至今的 2023 年至今至 2024 年稀釋每股收益橋樑中介紹了 2024 年年初至今的活動對稀釋每股收益的影響。更重要的獲利驅動因素是 2021 年一般利率狀況、利率上漲和遞延 RAM 收入減少，分別為稀釋每股盈餘貢獻了 1.82 美元、0.44 美元和 0.22 美元。

These drivers were partially offset by increases in expenses captured in the ICBA of $0.13 per diluted share. The recognition of deferred RAM expenses of $0.19 per diluted share and other factors net of $0.03 per diluted share.

這些驅動因素被 ICBA 中攤薄後每股 0.13 美元的費用增加部分抵消。確認遞延 RAM 費用為每股稀釋每股 0.19 美元，並扣除每股稀釋股份 0.03 美元的其他因素。

Turning to capital we continue to make significant investments in our water utilities to help ensure the delivery of safe and reliable water service. Group capital investments during the three and six-month periods ended June 30, 2024, and totaled $104.6 million and $214.4 million, respectively, which is an increase of 9.8% and 21%, respectively, over the same period last year.

在資本方面，我們繼續對供水設施進行大量投資，以幫助確保提供安全可靠的供水服務。截至2024年6月30日的三個月及六個月期間，集團資本投資總額分別為1.046億美元及2.144億美元，較去年同期分別成長9.8%及21%。

As of June 30, 2024, we've completed 56% of our annual capital budget of $385 million. As a reminder, our planned 2024 capital investments and our estimated capital investments for 2025 to 2027 do not include $226 million of estimated PFOS projects that will be constructed over multiple years beginning in the second half of 2024.

截至 2024 年 6 月 30 日，我們已完成年度資本預算 3.85 億美元的 56%。需要提醒的是，我們計劃的 2024 年資本投資和估計的 2025 年至 2027 年資本投資不包括預計 2.26 億美元的 PFOS 項目，這些項目將從 2024 年下半年開始分多年建設。

Greg will discuss the planned capital expense for 2025 to 2027 that we apply for in the 2024 GRC and infrastructure improvement plans later on the call the growth of our capital investment program is having a positive impact on our regulated rate base. Our overall rate base grew to an estimated $2.2 billion by the end of 2023. This is an increase of 9.4% over 2022.

Greg 將在稍後的電話會議上討論我們在 2024 年 GRC 和基礎設施改善計劃中申請的 2025 年至 2027 年計劃資本支出，我們的資本投資計劃的增長對我們的監管利率基礎產生積極影響。到 2023 年底，我們的總體費率基數估計將增加至 22 億美元。這比 2022 年增長了 9.4%。

If approved, as requested in the 2024 California General Rate Case and infrastructure improvement plan, coupled with the planned capital investments in our other water utilities would result in a rate base growth of between 9% and 14%.

如果按照 2024 年加州一般費率案例和基礎設施改善計劃的要求獲得批准，再加上我們其他水務公司的計劃資本投資，將導致費率基數增長 9% 至 14%。

Moving to Slide 11, we maintained a strong balance sheet with a capital structure of 59.5% equity and 45.5% debt, during the six months ended June 30, 2024, we raised approximately $52 million from the sale of 1 million shares of stock under our at-the-market, or ATM stock equity program. We have $80 million remaining under the program that can be used to finance general corporate purposes, including planned capital investments and future strategic opportunities.

轉向幻燈片11，我們保持了強勁的資產負債表，資本結構為59.5% 股權和45.5% 債務，在截至2024 年6 月30 日的六個月內，我們透過出售100 萬股股票籌集了約5200萬美元。該計劃剩餘 8000 萬美元，可用於資助一般企業用途，包括計劃的資本投資和未來的戰略機會。

On June 28, S&P affirmed our global credit rating of A plus stable. We are pleased with this upgrade, which speaks to our ability to navigate the credit markets in our California Water utility. On July 22, the CPUC issued a proposed decision authorizing Cal Water to issue up to $1.3 billion in new debt and equity securities. Cal Water anticipates the CPUC will approve the proposed decision during its August meeting.

6 月 28 日，標準普爾確認我們的全球信用評級為 A+ 穩定。我們對此次升級感到滿意，這表明我們有能力駕馭加州自來水公司的信貸市場。7 月 22 日，CPUC 發布了一項擬議決定，授權 Cal Water 發行最多 13 億美元的新債務和股本證券。加州水務公司預計 CPUC 將在 8 月的會議上批准擬議的決定。

And just to mention that yesterday, our Board of Directors declared a $0.28 per share dividend for our stockholders of record on August 12, 2024. This is our 318th consecutive quarterly dividend.

值得一提的是，昨天，我們的董事會宣佈於 2024 年 8 月 12 日向記錄在案的股東派發每股 0.28 美元的股息。這是我們連續第 318 個季度派息。

Wrapping up on Slide 10. We continue to maintain a strong liquidity position. As of June 30, 2024, the company had cash and cash equivalents of $82.7 million, of which $45.4 million was classified as restricted. Further, we had additional short-term borrowing capacity on our lines of credit of $355 million.

投影片 10 結束。我們持續保持強勁的流動性狀況。截至2024年6月30日，該公司擁有現金及現金等價物8,270萬美元，其中4,540萬美元被列為限制性資產。此外，我們的信用額度為 3.55 億美元，還擁有額外的短期借款能力。

With that, I'll turn the call over to Greg to give an update on our 2024 general rate case and other regulatory matters. Greg?

接下來，我會將電話轉給 Greg，以提供有關 2024 年一般費率案例和其他監管事宜的最新資訊。格雷格？

Thanks, Jim. On July 8, 2024, California Water Service submitted our Infrastructure Improvement Plans for 2025 through 2027 as part of its triannual general rate case how Water proposes to invest more than $1.6 billion in its districts from 2025 to 2027. To enhance affordability, particularly for low use, low-income customers, Cal Waters application proposes a low use water equity program that would decouple revenues from water sales across its regulated service areas.

謝謝，吉姆。2024 年7 月8 日，加州水務局提交了2025 年至2027 年基礎設施改善計劃，作為其三年期一般費率案例的一部分，水務局建議從2025 年至2027 年在其各地區投資超過16億美元。為了提高負擔能力，特別是對於低用水量、低收入客戶來說，加州沃特斯申請提出了一項低用水量公平計劃，該計劃將使其監管服務區域的水銷售收入脫鉤。

Filing request total revenue increased of $140.6 million or a 17.1% increase for 2026, $74.2 million or 7.7% for 2027 and $83.6 million or 8.1% for 2028. The triannual filing begins an approximate 18-month review process by the commission.

2026 年，申請請求總收入將增加 1.406 億美元，成長 17.1%，2027 年將成長 7,420 萬美元，成長 7.7%，2028 年將成長 8,360 萬美元，成長 8.1%。每三年一次的備案開始了委員會為期約 18 個月的審查程序。

With that, I'll turn it over to Marty.

有了這個，我會把它交給馬蒂。

Thank you, Greg. Thank you, Jim. I want to start off talking about the California Supreme Court case that came out on July 8, as many of you probably have read the California Supreme Court in a unanimous decision ruled in favor of the four investment water utilities that brought to suit against the PUC. It's very important to note that the decision helps preserve decoupling and also protects the rights of utilities to have due process in the rate-making process.

謝謝你，格雷格。謝謝你，吉姆。我想先談談 7 月 8 日加州最高法院公佈的案件，因為你們中的許多人可能已經讀過加州最高法院的一項一致裁決，該裁決有利於對 PUC 提起訴訟的四家投資水務公司。值得注意的是，該決定有助於保持脫鉤，並保護公用事業公司在費率制定過程中享有正當程序的權利。

As you know, we are big believers in conservation decoupling in California goes back to the 70s when it was first used in the electric and gas industry, has played a major role in helping California reach its sustainability and renewability goals we feel the outcome is really important because it enforces the importance of due process and rate making. In other words, the commission has to follow the rules that are set forth in the rate-making process as well as the company. But it also allows us to continue to better align with the state of California's goals around sustainability, reliability, affordability and conservation. If you follow the California rules over the last couple of years, California has gotten very aggressive at the state level about making conservation of water life.

如您所知，我們堅信加州的保護脫鉤可以追溯到 70 年代，當時它首次應用於電力和天然氣行業，在幫助加州實現永續發展和可再生目標方面發揮了重要作用，我們認為結果確實是很重要，因為它強化了正當程序和費率制定的重要性。換句話說，委員會必須遵守利率制定過程和公司製定的規則。但它也使我們能夠繼續更好地與加州在永續性、可靠性、可負擔性和保護方面的目標保持一致。如果您遵守過去幾年加州的規定，您會發現加州在州一級非常積極地保護水生生物。

As I mentioned, decoupling is a very important tool that helps keep our customer rates affordable as we promote conservation to improve sustainability of critical water resources, so we're very happy with the outcome from the states of report. And as Greg mentioned, in the current filing that we just filed earlier this month, we have again submitted plans for approval to reimplement decoupling for our customers in the State of California.

正如我所提到的，脫鉤是一個非常重要的工具，當我們促進保護以提高關鍵水資源的可持續性時，有助於使我們的客戶價格保持在可承受的範圍內，因此我們對報告狀態的結果非常滿意。正如格雷格所提到的，在我們本月早些時候剛提交的當前文件中，我們再次提交了加州客戶重新實施脫鉤的計劃以供批准。

Moving on to Slide 14. I want to talk a little bit about where we are with fire season and our emergency response programs. If you've been watching the news or if you look at the fire maps for the state of California, there are times, it feels like the majority of the state is really on fire. So far this year, we've had three major fires near our service territories. We've got the Thompson fire, the Park fire and the Borel Fire.

轉到投影片 14。我想談談我們在火災季節的情況以及我們的緊急應變計畫。如果您一直在看新聞或查看加州的火災地圖，有時會感覺到該州的大部分地區確實著火了。今年到目前為止，我們的服務區域附近已經發生了三起重大火災。我們有湯普森火災、帕克火災和博雷爾火災。

Currently, as we speak, the Park fire and the Borel Fire are still burning. The Thompson fire, which took place early July was around our Orgill service area and a firm approximately 3,800 acres in a very small community in Northern California, the Park fire and the Borel Fire, which started about a day apart, one was near Chico, California, which is burned to date as of the slowing 391,000 acres that's equivalent to 610 square miles, and it's approximately 18% contained.

目前，帕克火災和博雷爾火災仍在燃燒。Thompson 火災發生在7 月初，發生在我們的Orgill 服務區和位於北加州一個非常小的社區內的一家佔地約3,800 英畝的公司周圍，Park 火災和Borel 火災發生時間相隔大約一天，其中一起發生在Chico 附近，加州迄今已被燒毀的面積已減少至 391,000 英畝（相當於 610 平方英里），其中約 18% 已得到控制。

The Borel Fire, which is in Bakersfield, which is more Central California in the Kern River area has burned approximately 59,000 acres and is 39% contained. I'm very happy to report that despite these fires coming very close to Cal Water assets, none of our assets have been affected are destroyed by fires.

位於加州中部克恩河地區貝克斯菲爾德的博雷爾大火已燒毀約 59,000 英畝土地，目前 39% 已獲得控制。我很高興地報告，儘管這些火災非常接近加州水務公司的資產，但我們的資產都沒有受到影響，也沒有被火災摧毀。

And the company has just done an outstanding job at working with first responders and betting our employees into the county and state DCs to help ordinate water supply and to make sure that we do what we can to make sure the firefighters have what they need to bolt these wildfires.

該公司剛剛在與急救人員合作方面做得非常出色，並將我們的員工投入到縣和州的 DC 中，以幫助協調供水，並確保我們盡我們所能，確保消防員擁有他們需要的東西這些野火。

Unfortunately, it's very indicative that this is going to be a long fire season, and as we get into the months of August, September and October, I believe we'll be expending a lot of resources dealing with the continuation of what was a very wet winter and what now has been a very hot, dry summer.

不幸的是，這非常表明這將是一個漫長的火災季節，隨著我們進入八月、九月和十月，我相信我們將花費大量資源來處理非常嚴重的火災的延續。乾燥。

Along with that, one of the things we do each year is we set certain corporate goals to host a certain number of what we call community EOCs or community emergency operations center exercises. We tend to target these exercises and communities that don't necessarily have all the resources to pull off both tabletop exercises, help communities and first responders better prepare for disasters.

除此之外，我們每年做的一件事是設定一定的企業目標，以舉辦一定數量的社區 EOC 或社區緊急行動中心演習。我們傾向於針對這些演習和社區，這些社區不一定擁有所有資源來完成桌面演習，幫助社區和急救人員更好地為災難做好準備。

Recently, we hosted two of these events in the State of Hawaii, one on the island of Maui and one on the Big Island of Hawaii or what's also known as [Kai Post], both of these events were very well attended by first responders, local state and mobile and state officials, including members of the Hawaii Public Utilities Commission, civil defense, critical infrastructure companies, including the electric company, the county water departments and other people who are playing an important role in dealing with these disasters.

最近，我們在夏威夷州舉辦了其中兩場活動，一次在毛伊島，一次在夏威夷大島或也稱為 [Kai Post]，這兩項活動都有很多急救人員參加，當地州政府和流動官員以及州政府官員，包括夏威夷公用事業委員會成員、民防、關鍵基礎設施公司（包括電力公司）、縣水務部門以及在應對這些災難中發揮重要作用的其他人員。

In my part of the presentation that I gave at the classes in Hawaii, and the classes include two pieces. There's a class piece of it, which is really how to use the Incident Command System, which is a basic FEMA model for dealing with emergencies.

在夏威夷的課程中進行的演講中，課程包括兩件作品。其中有一個課程部分，實際上是如何使用事件指揮系統，這是處理緊急情況的基本 FEMA 模型。

So that's the classroom-led part of the day. And the second part of it is a hands-on disaster simulation as I told, the people in the class I was participating in, I called the [threeCs.] It's absolutely critical that we that we connect, we communicate, and we coordinate. And when we do that as critical infrastructure companies helping first responders, we help save lives.

這就是一天中以課堂為主導的部分。正如我所說，第二部分是親身實踐的災難模擬，我參加的班級中的人們，我稱之為[三C]。當我們作為關鍵基礎設施公司幫助急救人員時，我們就幫助拯救了生命。

And that's very, very important in the world that we live in today, in a world that has been planning to change.

這對我們今天所處的世界、一個一直在計畫改變的世界來說非常非常重要。

Moving on to the next slide. I want to give you a brief update on where we are with the new PFAS, PFOS standards. And we're moving forward with our plans to implement our treatments on approximately 101 wells.

轉到下一張投影片。我想向您簡要介紹一下新的 PFAS、PFOS 標準的進展。我們正在推動對大約 101 口井實施處理的計畫。

If you look at the footnote on Jim's slides, which were Slide 9 and 10, you'll see that our estimates have changed a little bit based on more data that we've been able to gather as before project plans together. So that number increased approximately $11 million to $226 million. As of right now, that's our best guess cost to treat the 101 wells that require treatment.

如果您查看 Jim 投影片上的腳註（即投影片 9 和 10），您會發現我們的估計發生了一些變化，這是基於我們能夠像以前一樣收集專案計劃的更多資料。因此，這一數字增加了約 1,100 萬美元，達到 2.26 億美元。截至目前，這是我們對 101 口需要處理的井進行處理的最佳猜測成​​本。

By the way, that's 101 wells at approximately 1,170 wells, so given an idea of what part of our portfolio requires treatment.

順便說一句，這是 101 口井，大約 1,170 口井，因此了解我們的投資組合的哪一部分需要處理。

Just to remind everyone that the $226 million is not included in the capital forecast on the rate base slide or the capital investment slide. It's included in footnote. And the $1.6 billion that was included in the 2024 general rate case does not include these costs. So they're incremental to the investment projections that we've given the Street so far today. And we expect to refine these costs as more information comes in with the project plan.

只是提醒大家，這 2.26 億美元並未包含在利率基礎投影片或資本投資投影片的資本預測中。它包含在腳註中。2024 年一般費率案例中包含的 16 億美元不包括這些成本。因此，它們是我們今天迄今為止向華爾街提供的投資預測的增量。隨著項目計劃中包含更多信息，我們預計會完善這些成本。

But overall, we're moving forward. We believe we will be adopting the standard ahead of schedule within our service territory. Our goal is to have them implemented within the next 3 years. And also, one important milestone that was reached in the quarter is that we did file our Phase 1 plan form in the 3M and DuPont Class Action settlements. So those Class Action settlements discussions are moving forward. As a reminder, Cal Water is the class rep and all PFAS matters representing the industry in those discussions.

但總體而言，我們正在向前邁進。我們相信我們將在我們的服務範圍內提前採用該標準。我們的目標是在未來 3 年內實施它們。此外，本季實現的一個重要里程碑是，我們確實在 3M 和杜邦集體訴訟和解中提交了第一階段計劃表。因此，集體訴訟和解討論正在取得進展。提醒一下，Cal Water 是班級代表，所有 PFAS 事務在這些討論中代表行業。

So overall, moving forward with areas, our estimates moved up a little bit, but we are charging ahead as planned.

因此，總體而言，隨著各個領域的進展，我們的估計略有上升，但我們正在按計劃前進。

Moving on to Slide 16, to give a brief update on what's happening on the business development and M&A side. It was a fairly quiet quarter for us. We did complete one very, very small but strategic acquisition called Kings Mountain Park Mutual Water Company. The significance of this certainly is not in size, but it's the fact that this little system light in between our Bear Gulch system and the Skyline System here in the Bay Area that we acquired about a year ago.

接下來看投影片 16，簡單介紹業務發展和併購的最新情況。對我們來說，這是一個相當安靜的季度。我們確實完成了一項非常非常小的策略性收購，名為 Kings Mountain Park Mutual Water Company。其重要性當然不在於大小，而是事實上，這個小系統位於我們的 Bear Gulch 系統和我們大約一年前在灣區購買的 Skyline 系統之間。

So our roots go back to Bear Gulch for a long, long time. We've owned and operated that system for a long time. Last year, we acquired the Skyline system, and we just closed on the Kings Mountain system. Putting these 3 pieces together allows for a more efficient deployment of capital and improves reliability and allows us to ultimately improve service to the customers in that area.

所以我們的根源可以追溯到熊谷很長很長一段時間。我們已經擁有並運營該系統很長時間了。去年，我們收購了 Skyline 系統，剛關閉了 Kings Mountain 系統。將這三部分結合在一起可以更有效地部署資本並提高可靠性，並使我們最終能夠改善對該領域客戶的服務。

More importantly, I think it's a good example of how we continue to consolidate and grow an existing service area that's been built out the only thing about the San Francisco Bay area, this is on the peninsula side of the Bay Area as you got the 101 corridor. So even where are places that may not look like there might not be opportunities to be more efficient, they clearly are. And I think this acquisition represents a good example of how we do this to continue to grow and try to become more efficient.

更重要的是，我認為這是一個很好的例子，說明我們如何繼續鞏固和發展現有的服務區，該服務區是在舊金山灣區唯一的基礎上建立的，它位於灣區的半島一側，因為你有101走廊。因此，即使有些地方看起來可能沒有提高效率的機會，但它們顯然也是有機會提高效率的。我認為這次收購是我們如何繼續發展並努力提高效率的一個很好的例子。

Since 2019, we have completed over 36,000 connections that we've added to our platform using this kind of tuck-in strategy, and we anticipate that we will continue to add at least 1%, 1.5% new connections going out forward into the future using the strategy.

自 2019 年以來，我們已經使用這種塞入策略將超過 36,000 個連接添加到我們的平台上，我們預計未來將繼續添加至少 1%、1.5% 的新連接使用該策略。

Next, I want to take a moment to give you an update on our ESG report that was filed in May. If you look if you're interested in ESG, our plan aligns with the sustainability accounting standards board and their water utility service industry standards. It references the Task Force on Climate-Related Financial Disclosures, TCFD, and it references the Global Reporting Initiative Standards GRI. So all that information is available in our plan.

接下來，我想花點時間向您介紹我們 5 月提交的 ESG 報告的最新情況。如果您對 ESG 感興趣，我們的計劃符合永續發展會計準則委員會及其水務公用事業服務產業標準。它引用了氣候相關財務揭露工作小組 (TCFD)，並引用了全球報告倡議標準 GRI。因此，所有這些資訊都可以在我們的計劃中獲得。

In the report that was just filed, we make our commitment to reduce our greenhouse gases. So 1 and Scope two greenhouse gases by 63% by the year 2035. We plan on accomplishing this through a multi-platform approach that includes the electrification of our fleet, continuing aggressive water conservation, building alternative energy sources of supplies in some of our service areas and aggressively going after renewable electricity procurement.

在剛提交的報告中，我們承諾減少溫室氣體排放。因此，到 2035 年，範圍 1 和範圍 2 溫室氣體排放量將減少 63%。我們計劃透過多平台方法來實現這一目標，包括我們的車隊電氣化、持續積極節約用水、在我們的一些服務區域建立替代能源供應以及積極尋求再生電力採購。

As you may recall, water utilities use a lot of energy and pumping and transporting water. And we believe using this multi-platform approach, we can easily achieve these goals by 2035 and hopefully ahead of schedule.

您可能還記得，自來水公司使用大量能源以及抽水和輸水。我們相信，利用這種多平台方法，我們可以在 2035 年輕鬆實現這些目標，並有望提前實現。

In addition, I want to point out just a couple of fun things. Obviously, the water quality compliance, that is a core part of our G&A that we meet and exceed all the primary sector water quality standards every day that we operate in all the states that we operate in. And that's a big part of our bonus plan that our employees participate in.

此外，我想指出一些有趣的事情。顯然，水質合規性是我們 G&A 的核心部分，我們每天都滿足並超越我們在營運所在的所有州運營的所有主要部門水質標準。這是我們員工參與的獎金計劃的重要組成部分。

But if you saw a few weeks ago, we announced that we just completed our 10th year of our scholarship program. So this year, Cal Water again awarded more than $80,000 to 12 students in California, Hawaii and Washington. Since starting the program in 2014, we have awarded more than $750,000 to students in our service area, and we're very, very proud to do that.

但如果您在幾週前看到的話，我們宣布我們剛剛完成了獎學金計劃的第十個年頭。今年，加州水務公司再次向加州、夏威夷州和華盛頓州的 12 名學生提供了超過 8 萬美元的資助。自 2014 年啟動該計劃以來，我們已向服務區域的學生提供了超過 75 萬美元的資助，對此我們感到非常非常自豪。

And one of the things about being a 98 year old water company sometimes as you forget about the younger people, this program that we've been out for executive has been very, very successful and it's a lot of fun going through the application process and looking at some of the students of our customers, many of whom are first-generation college students, what their goals are and what they're studying and how they want to be get their education and come back and help make their communities a better place. So we're very, very proud of that scholarship program.

作為一家擁有 98 年歷史的自來水公司，有一點是很重要的，那就是有時你會忘記年輕人，我們為高管尋找的這個項目非常非常成功，申請過程非常有趣，看看我們客戶的一些學生，其中許多是第一代大學生，他們的目標是什麼，他們正在學習什麼，以及他們希望如何接受教育並回來幫助他們的社區變得更美好。所以我們對這個獎學金計劃感到非常非常自豪。

And then lastly, I want to share with everyone that recently, ISS updated our ESG score to 72.28. That's a raw score of 72.28. On their scale that gives us a B+ and well a B+ is not an A. There are no As that have an ESG score in the water utility space, we are the highest-rated ESG score for an investor on water utility in North America according to ISS. So just kudos to our ESG team on our continuing implementation of our strategy as we move forward in dealing with climate change and how we support our communities, employees and our shareholders.

最後，我想與大家分享的是，最近 ISS 將我們的 ESG 分數更新為 72.28。原分數為 72.28。就他們的規模而言，我們獲得了 B+，而 B+ 並不是 A。因此，我們的 ESG 團隊在應對氣候變遷方面不斷實施我們的策略，以及我們如何支持我們的社區、員工和股東，值得讚揚。

So in conclusion, overall, a solid quarter, as Jim mentioned. I know the numbers are a little bit confusing. I apologize for that. There was circumstances beyond our control. We had to book all of the '21 rate case in '24 and not '23.

總之，正如吉姆所提到的，總體而言，這是一個穩定的季度。我知道這些數字有點令人困惑。我對此表示歉意。出現了我們無法控制的情況。我們必須在 24 年而不是 23 年預訂所有 21 年費率案件。

But clearly, you're seeing the benefit of the rate relief start to flow in with the company. I'm very, very happy with the capital numbers that Jim shared with you, the 9.9% kind of quarter-over-quarter and the 21% kind of year-to-date growth on CapEx. I think that's indicative of our continued focus on our infrastructure improvement plans. And how we're trying to improve sustainability and reliability on behalf of our customers.

但顯然，您會看到利率減免的好處開始惠及公司。我對 Jim 與您分享的資本數字非常非常滿意，資本支出季度環比增長 9.9%，年初至今增長 21%。我認為這表明我們繼續關注基礎設施改善計劃。以及我們如何努力代表客戶提高永續性和可靠性。

Q3 is typically our busiest quarter, and it's usually our peak demand quarter from an operations perspective. As I mentioned, it's going to be busy just in the normal course of operations, but we're also dealing with a very significant fire season this year.

第三季通常是我們最繁忙的季度，從營運角度來看，這通常是我們的需求高峰。正如我所提到的，在正常運作過程中，它會很忙，但今年我們也面臨著一個非常重要的火災季節。

And so as I mentioned, we have two fires right now that we've been allocating resources to the Boral fire and the Park fire. And so it's going to be a very, very busy quarter from a fire prevention perspective and working our first responders to make sure they have what they need to spike fires.

正如我所提到的，我們現在有兩場火災，我們一直在為博拉爾火災和公園火災分配資源。因此，從防火的角度來看，這將是一個非常非常繁忙的季度，我們的第一個響應人員將確保他們擁有撲滅火災所需的一切。

Having said that, it's also we're in the middle of the rate case. And so all the data requests are coming in and going through working with through the request of the California advocates so we'll continue to try to keep our general rate case on schedule.

話雖如此，我們也處於利率狀況的中間。因此，所有數據請求都會收到並根據加州倡導者的要求進行處理，因此我們將繼續努力按計劃保持我們的一般費率情況。

But overall, I'm very happy with the performance for the quarter. I'm happy we've got our rate case filed on time. I'm happy that we are continuing our growth and our capital programs. And more importantly, I think I'm happy that we're doing what we do on the emergency response side because, again, if you follow those 3Cs, you help save lives. And at the end of the day, I think that's one of the most important things that we do.

但總的來說，我對本季的表現非常滿意。我很高興我們按時提交了費率案件。我很高興我們正在繼續我們的成長和我們的資本計劃。更重要的是，我認為我很高興我們在緊急應變方面所做的事情，因為，如果您遵循這些 3C，您就可以幫助拯救生命。歸根結底，我認為這是我們所做的最重要的事情之一。

So, with that Dee, I'm going to hand it back to you, and we will open it up for questions.

因此，對於迪伊，我將把它交還給您，我們將開放它以供提問。

Thank you. We will now begin the question-and-answer session. (Operator Instructions).

謝謝。我們現在開始問答環節。（操作員說明）。

Michael Gaugler from Janney Montgomery Scott.

珍妮·蒙哥馬利·斯科特的邁克爾·高格勒。

Just one question. Back on Slide 9, your CapEx deck. Looking out, the note at the bottom, Marty, I think you referenced this that the estimates for 2024 to 2027 exclude PFAS, related capital investments. Given those investments are probably going to kind of be made, I'm wondering what the cadence of that would look like across the years, maybe not so much 2025, but maybe '26, '27, '28. And kind of where are your thoughts are there?

只有一個問題。回到投影片 9，您的資本支出平台。看看底部的註釋，Marty，我認為您提到了 2024 年至 2027 年的估計不包括 PFAS 和相關資本投資。考慮到這些投資可能會進行，我想知道這些年的節奏會是什麼樣子，也許不是 2025 年，但可能是 26 年、27 年、28 年。你的想法在哪裡？

So let's go back to what our kind of basic goal is, which is we try to balance affordability and new capital while keeping the investment rate at about 3 times the rate of depreciation. So that usually gives us about a 9% to 10% compound annual growth rate on the CapEx line. Clearly, as you can see, there's a big step up in 2025 and '26 associated with the rate case.

那麼，讓我們回到我們的基本目標是什麼，即我們試圖平衡負擔能力和新資本，同時將投資率保持在折舊率的 3 倍左右。因此，這通常會為我們帶來 9% 到 10% 的資本支出複合年增長率。顯然，正如您所看到的，2025 年和 26 年與費率情況相關的有一個很大的進步。

Now those numbers, that's the full ask to the rate case. You never get 100% of what you asked for in the last rate case [Greg] I think including advice letters, we got about 79% of what we requested, which in the rate case prior to that, I guess that would have been 18 rate case in California, we're in the 80s.

現在這些數字，就是對費率案的完整要求。在上一個費率案例中，你永遠不會得到100% 的要求[Greg] 我認為，包括建議信在內，我們得到了大約79% 的要求，而在此之前的費率案例中，我想這將是18以加州為例，我們正處於 80 年代。

So for planning purposes, Michael, we're planning around that 9%, 10% CAGR on the CapEx. And the importance of that is it allows us to try to balance affordability on the rate side. The PFAS piece of it is that's a new standard that we have to comply with.

因此，出於規劃目的，邁克爾，我們計劃資本支出的複合年增長率約為 9%、10%。其重要性在於，它使我們能夠嘗試平衡利率方面的承受能力。PFAS 的一部分是我們必須遵守的新標準。

And there was a lot of speculation on that because the EPA was a little slow on the uptake in getting the new requirements out. We run things like that, so things that are kind of newly being introduced into our portfolio as a separate program because in the case of PFAS, we have one project team within our company that's coordinated all of PFAS projects across our enterprise.

對此有很多猜測，因為美國環保署在製定新要求方面有點緩慢。我們運行類似的東西，所以這些東西是作為一個單獨的專案新引入到我們的投資組合中的，因為就 PFAS 而言，我們公司內部有一個專案團隊，負責協調整個企業的所有 PFAS 專案。

And so that will be incremental. So I think you can expect a higher number probably in that '26 and '27 year driven by the PFAS investment and a number of variables will come into that. Obviously, PFOS and PFOA and the forever chemicals had a lot of press and if you remember early on in the draft information that was communicated.

所以這將是漸進的。因此，我認為在 PFAS 投資的推動下，您可以預期在 26 和 27 年可能會出現更高的數字，並且會出現許多變數。顯然，PFOS 和 PFOA 以及永久化學物質受到了很多媒體的關注，如果您還記得草案早期傳達的訊息的話。

They said, Oh yeah, you have to implement three years and they say, okay, no, I'll ask a five-year implementation. It's really hard to look at customers in the eye and say, okay, five years from now, your water is not going to be safe, but don't worry about it until then, which is why we made the commitment that we're going to invest the money upfront.

他們說，哦，是的，你必須實施三年，他們說，好吧，不，我會要求實施五年。真的很難看著客戶的眼睛說，好吧，五年後，您的水將不再安全，但在那之前不要擔心，這就是為什麼我們做出承諾，我們將預先投資這筆錢。

We're going after the PFOS treatments now and we're starting to process this year to implement those implemented treatment on those wells that require treatment. So I think you're probably looking at of '25 and '26. It will be higher of the 9.9% driven by the PFOS.

我們現在正在進行 PFOS 處理，今年我們將開始對那些需要處理的油井實施已實施的處理。所以我想你可能正在看 '25 和 '26。它將高於由 PFOS 驅動的 9.9%。

That's all I had, gentlemen. Thank you.

這就是我所擁有的一切，先生們。謝謝。

Thanks, Michael.

謝謝，麥可。

Davis Sunderland from Baird.

來自貝爾德的戴維斯桑德蘭。

Hey, Marty, Jim, Greg, good morning, guys. Thank you for taking my question. Sir,I wanted to ask, going back to the business development pipeline. And I apologize it might have been an error on my end but I had some choppiness coming through when you were talking about that. Maybe just any thoughts on how things are shaping up with smaller systems maybe having difficulties complying with the PFAS standards? And just any changes you've seen or opportunities that you've seen pop up related to some of these smaller systems that may sold into the acquisition pipeline or how you see this playing out? And then I have one follow-up.

嘿，馬蒂、吉姆、格雷格，早安，夥計們。感謝您回答我的問題。先生，我想問一下，回到業務開發管道。我很抱歉，這可能是我的一個錯誤，但當你談論這個問題時，我有點不穩定。也許只是對小型系統如何發展可能難以遵守 PFAS 標準的任何想法？您所看到的任何變化或您所看到的與這些可能被出售到收購管道中的一些較小系統相關的機會，或者您如何看待這種情況的發生？然後我有一個後續行動。

It's interesting to asked that question this week, we had our persons in charge of water quality out in one of the states that we operate in, giving a presentation to commissioners about what does PFOS, PFOA mean. And the good news is we got really good feedback that they love what we're doing, but they said, wow, what are all these small systems in our state going to do?

本週問這個問題很有趣，我們派了負責水質的人員到我們營運所在的一個州，向委員們介紹了 PFOS、PFOA 的含義。好消息是我們得到了非常好的回饋，他們喜歡我們正在做的事情，但他們說，哇，我們州的這些小系統要做什麼？

So I think you're starting to see an awakening that there's going to be a huge capital requirement in some of these small systems that are probably undercapitalized and lack liquidity, and I think that will play to our benefit the other thing in talking to our Head of Business Development, Shilen Patel, interfaces have been higher, the cost of capital has been up and seller expectations have remained pretty high. We're starting to see the seller expectations soften up a little bit, which is nice.

因此，我認為您開始意識到，在這些可能資本不足且缺乏流動性的小型系統中，將存在巨大的資本需求，我認為這將在與我們的談判中發揮作用，這對我們有利。主管Shilen Patel 表示，介面更高，資金成本上升，賣家期望仍然很高。我們開始看到賣家的期望減弱，這很好。

And in the case of the deal I mentioned, the Kings Mountain, we actually purchased that system for $1, right, because the company just that they couldn't weren't the best operators. It requires capital. We have the ability to put that capital in the system, improve their service levels and more importantly, it allows us to connect kind of the three systems and get that synergy of operating the three systems and those three sources of supply.

就我提到的 Kings Mountain 交易而言，我們實際上以 1 美元的價格購買了該系統，對吧，因為該公司不是最好的運營商。它需要資本。我們有能力將資金投入到系統中，提高他們的服務水平，更重要的是，它使我們能夠連接這三個系統，並獲得運營這三個系統和這三個供應來源的協同作用。

So I think you're starting to see a little bit more movement in that area. Now business development M&A, right, in the water space just moved slow. How fast of a catalyst will it be? I think that's to be determined. I think the larger IOUs are held to a very, very high standard on water quality. And if we miss any new requirements, they fine the heck out of us.

所以我認為你開始看到該領域有更多的變化。現在，業務發展併購在水領域進展緩慢。催化劑的速度有多快？我認為這是有待確定的。我認為較大的欠條對水質的標準非常非常高。如果我們錯過任何新的要求，他們就會對我們進行罰款。

But I think, generally speaking, the EPA has a hard time enforcing those standards with private small companies that just aren't registering. And I think that piece will be interesting to watch. But certainly, we're seeing a softening of expectations with sellers, and I think we're starting to see a little bit more activity in small systems as the PFAS PFOA requirements come into play. And I think it's really important to keep talking about those new requirements, what does that mean and why they're important.

但我認為，一般來說，美國環保署很難對那些沒有註冊的私人小公司執行這些標準。我認為那篇文章會很有趣。但可以肯定的是，我們看到賣家的期望有所減弱，而且我認為隨著 PFAS PFOA 要求的發揮作用，我們開始看到小型系統中的活動增加。我認為繼續討論這些新要求、這意味著什麼以及它們為何重要非常重要。

And then the only other one for me, you actually started to talk about it with Michael's question previously, just about never getting 100% of what you asked for. And I guess my question is to frame it up a little differently is have you had any pushback, or do you anticipate any pushback with the proposed rate increases or any friction from the consumer how to get to your thoughts there?

然後對我來說唯一的另一個問題是，你實際上之前就開始談論邁克爾的問題，只是從來沒有得到 100% 的你要求的東西。我想我的問題是，以稍微不同的方式來表述，您是否有任何阻力，或者您是否預計提議的費率上漲會出現任何阻力，或者消費者如何表達您的想法會有任何阻力？

It's still too early in the case. I mean, we just filed it July 8, and we've started receiving data requests on it. But it's really still what we're three weeks in, so it's still too early to tell what their overall feeling will be.

現在該案還為時過早。我的意思是，我們剛剛在 7 月 8 日提交了該文件，並且已經開始收到有關它的資料請求。但這實際上仍然是我們三週後的情況，所以現在判斷他們的整體感受還為時過早。

Yeah, I would just add to that, look, inflation is high and everyone's feeling it, and our customers are not exempt from that, look how waters not exempt from that and when we last plant, I gave a presentation or an update to the Board about our rate cases. And before I gave them kind of what the numbers looked like I talked about what some of our cost increases were over the last three years. Labor is up 15% to 20%. Chemicals are up 35% is up 200% since 2022.

是的，我想補充一點，看，通貨膨脹很高，每個人都感覺到了，我們的客戶也不能倖免，看看水也不能倖免，當我們上次工廠時，我做了一個演示或更新了董事會關於我們的費率案例。在我向他們提供具體數字之前，我談到了過去三年中我們的一些成本增長。勞動力上漲 15% 至 20%。自 2022 年以來，化學品價格上漲了 35%，漲幅為 200%。

So that's one of the reasons why we try to balance affordability that's why decoupling is really important, frankly, because it allows you to implement a rate design that people who use less water and especially people in underserved communities and people on fixed income, it allows you to potentially sell that water at below a marginal cost and for the super users of the water, the people can afford to use a lot of water, and you charge them more.

因此，這就是我們嘗試平衡負擔能力的原因之一，坦白說，這就是為什麼脫鉤非常重要，因為它允許您實施一種費率設計，使用水量較少的人們，特別是服務不足的社區的人們和固定收入的人們，它允許你有可能以低於邊際成本的價格出售這些水，對於水的超級用戶來說，人們有能力使用大量的水，你向他們收取更高的費用。

And so one of the things I like in the GRC application is the fact that we have a really nice rate design that really benefits the softer uses a water who are typically the fixed income and may be underserved communities and really ramps up the charging the people who can afford to pay the water bills and we want to use a lot more water.

因此，我在GRC 應用程式中喜歡的一件事是，我們有一個非常好的費率設計，這確實有利於軟用水者，他們通常是固定收入且可能是服務不足的社區，並且確實提高了人們的收費誰有能力支付水費，我們希望使用更多的水。

So, I think it will be interesting to see, but obviously, affordability and inflation, it's a tough time right now.

所以，我認為這會很有趣，但顯然，就負擔能力和通貨膨脹而言，現在是一個艱難的時期。

Great. Thanks, guys. Appreciate the time.

偉大的。謝謝，夥計們。珍惜時間。

Thank you.

謝謝。

Jonathan Reeder from Wells Fargo.

來自富國銀行的喬納森·里德。

Good morning, team for the data. You just addressed my questions around kind of the RC. and the CapEx and the rate impact. But on results itself, was there anything in the $0.7 of EPS that was kind of nonrecurring or maybe a result of the retroactive notice of the 2021 GRC decision?

早上好，數據團隊。您剛剛回答了我關於 RC 的問題。以及資本支出和利率影響。但就結果本身而言，0.7 美元的 EPS 中是否有任何屬於非經常性的內容，或者可能是 2021 年 GRC 決定的追溯通知的結果？

Well, certainly, in the year-to-date numbers, we had the I think there's $64 million of net income in the year-to-date numbers that well, I think we recorded $64 million in 2024 of 2023 income that will not repeat itself. In the deck I think I also mentioned that we carved out $18.7 million of interim rate relief, so $18.7 million of that $64 million was attributable to the second quarter of 2023. So people kind of want to get a sense of what the impact would have been had we had timely rate relief that kind of gives you a little bit of sense of how 2023 was impacted.

嗯，當然，在年初至今的數字中，我認為年初至今的數字中有 6400 萬美元的淨利潤，我認為我們在 2024 年記錄了 2023 年收入的 6400 萬美元，不會重複本身。在演講中，我想我還提到，我們劃出了 1,870 萬美元的臨時利率減免，因此這 6,400 萬美元中的 1,870 萬美元歸因於 2023 年第二季。因此，人們想了解一下，如果我們及時降低利率，會產生什麼影響，這會讓你對 2023 年受到的影響有一點了解。

Now as far as the quarterly results go, there really wasn't anything that was unique to the quarter other than the new rates, and those will continue on going forward that we did get in the 2021 rate case. So I guess if you're looking at year-to-date, I'd consider the fact that we did record the $64 million in Q1 of 2024 that will impact the entire year. But as far as the quarter goes, there was really nothing that was unique to the quarter.

現在就季度業績而言，除了新利率之外，本季確實沒有什麼獨特之處，而且我們在 2021 年利率情況下確實得到的這些結果將繼續下去。因此，我想如果您關注的是今年迄今為止的情況，我會考慮這樣一個事實：我們確實在 2024 年第一季度記錄了 6400 萬美元，這將影響全年。但就本季而言，確實沒有什麼獨特之處。

Okay. That's helpful. And then along those lines, can you just help me understand what's included in the buckets on the Q2, like EPS bridge slide like -- specifically like the 2021 GRC bucket versus the rate increase bucket? Like where did the new mechanisms -- having the new mechanisms fall versus just the '23 base rate increase over that interim that you're talking about versus the '24 attrition increase? Like where do each of those falls in those two different bars?

好的。這很有幫助。然後，沿著這些思路，您能幫我了解 Q2 的桶中包含哪些內容，例如 EPS 橋滑道 - 特別是 2021 年 GRC 桶與速率增加桶？就像新機制在哪裡——新機制下降了，而你所說的過渡時期的 23 年基本費率增加了，而 24 年自然減員增加了？就像這兩個不同的酒吧中的每一個都落在哪裡？

So looking at the diluted earnings per share bridge, the Q2 2023 to Q2 2024 bridge, if you take a look at the general rate case bucket or bar, that really relates to the impact of the new rate structure and the new rates that we implemented in 2023 -- or I'm sorry, in 2024 as it relates specifically to the 2021 rate case. The rate increases, column or bar, if you will, that really relates to increases that we've had for water offsets, for advice letter filings and for the delta, the change in our cost of capital mechanism.

因此，看看稀釋後的每股盈餘橋樑，即2023 年第二季到2024 年第二季的橋樑，如果您看一下一般利率案例桶或長條圖，這確實與新利率結構和我們實施的新利率的影響有關2023 年——或者抱歉，是 2024 年，因為它與 2021 年的利率情況特別相關。如果你願意的話，無論是柱形或柱形，利率的增加確實與我們在水補償、建議信備案和三角洲方面的增加有關，也就是我們資本成本機制的變化。

So that really captures rates outside of the new rate design and outside of the new rate structure of the 2021 rate case and then the change in accrued revenue there, that's principally a result of the change that we had in unbilled -- our unbilled revenue, both in the number of days and the rate impact from the 2021 general rate case.

因此，這確實捕捉了新費率設計和 2021 年費率案例的新費率結構之外的費率，以及應計收入的變化，這主要是我們未開票收入變化的結果，無論是天數還是2021年一般費率情況對費率的影響。

So the $0.26 from a rate increase, does that include the '24 attrition increase related to the 2021 GRC?

那麼，升息帶來的 0.26 美元，是否包括與 2021 年 GRC 相關的 24 年員工流失增加？

No. That would I believe that's also captured let me get back to you on that, Jonathan, but I believe that's also captured in the 2021 general rate case. I think that, that captures all of the impact of the rate changes from the rate case.

不。我相信這也被抓住了，讓我回到你身邊，喬納森，但我相信這也被抓住在 2021 年一般利率案例中。我認為，這體現了利率案例中利率變化的所有影響。

You think the $0.23 out of the attrition?

您認為這 0.23 美元是由損耗造成的嗎？

I think so, yes.

我想是的，是的。

And then on that change in accrued revenue, does that kind of pull forward earnings from Q3 then?

然後，根據應計收入的變化，這是否會拉動第三季的收益？

No, that represents principally what we have already delivered in terms of water service but have not yet billed our customers. So we record that revenue as an unbilled amount at the end of the quarter. We'll have a similar amount that we will bill at the end of Q3.

不，這主要代表我們已經提供的供水服務，但尚未向客戶收取費用。因此，我們在季度末將該收入記錄為未開票金額。我們將在第三季末收取類似的金額。

And if there is a delta between the two of them, then we would certainly take that into consideration in terms of what the net impact is on the change in the unbilled revenue. The fact that there is days involved in the Q2 number would imply that potentially there will be less in the unbilled amount going into Q3, but it's not going to be meaningful.

如果兩者之間存在增量，那麼我們肯定會考慮對未開票收入變化的淨影響。事實上，第二季的數字涉及天數，這意味著進入第三季的未開票金額可能會減少，但這沒有意義。

And I don't know certainly not the numbers for me, but it's been a warm summer.

我當然不知道具體的數字，但那是一個溫暖的夏天。

It's been a very warm summer and yes, to Marty's point, especially if you take a look at the end of the quarter, so the last couple of weeks of July I'm sorry, the last couple of weeks of June were very warm across all of our service territories, especially in California, but across all of our service territories. And we actually saw that in the first month of the Q3.

這是一個非常溫暖的夏天，是的，就馬蒂而言，特別是如果你看一下季度末，所以七月的最後幾週我很抱歉，六月的最後幾周非常溫暖我們所有的服務區域，特別是在加利福尼亞州，但跨越我們所有的服務區域。我們實際上在第三季的第一個月就看到了這一點。

So I think you'll see some of that that if you're just focused on the number of days, that difference is going to be mitigated significantly by the weather, and I think by usage and rates. I don't think it's going to have a meaningful impact.

因此，我認為，如果您只關注天數，那麼這種差異將因天氣、使用情況和費率而顯著減輕。我認為這不會產生有意義的影響。

Okay, and then last question, just kind of segue to usage like given the loss of decoupling and the warm summer and everything, how has the usage been tracking versus what the rate case assumed?

好的，然後是最後一個問題，只是繼續討論使用情況，例如考慮到脫鉤的損失和溫暖的夏季等等，與費率情況假設的情況相比，使用情況的跟踪情況如何？

Right now, we're tracking about 2% ahead of where we were at this time last year and that's principally driven by the fact that the first quarter of last year was very wet and rainy. In the first quarter of this year, we experienced more normal conditions. We still had a very good level of precipitation in the first quarter, but not to the same extent we did in the prior year. And then we had a really good July.

目前，我們的成長率比去年同期高出約 2%，這主要是由於去年第一季非常潮濕多雨。今年第一季度，我們的情況比較正常。第一季的降水量仍然很好，但程度不如去年。然後我們度過了一個非常美好的七月。

So we're tracking or June rather the second quarter. So we're tracking pretty well in terms of our usage going into Q3, as it relates I haven't gone back and check to see how it relates in terms of the rate case. If I can get back to you on that but I think we were probably around 96% or right thereabouts, but I'll get the exact number for you and can circle back with you on that.

所以我們追蹤的是六月而不是第二季。因此，我們在進入第三季度的使用情況方面跟踪得很好，因為它與我沒有回去檢查它與費率情況的關係如何。如果我可以就此回覆您，但我認為我們可能在 96% 左右或大約是這樣，但我會為您提供確切的數字，並可以就此與您聯繫。

That 96% might be on a year-to-date basis?

96% 可能是今年迄今的數據？

Yes, that's the year-to-date.

是的，這就是今年迄今為止的情況。

There is no more question at this time. I will now turn the conference back over to Martin Kropelnicki, Chairman, President and Chief Executive Officer, for closing remarks.

目前沒有更多問題了。現在我將把會議轉回主席、總裁兼執行長 Martin Kropelnicki 致閉幕詞。

Great. Thanks, everyone, for joining us here today. As we move into Q3, again, it's going to be the busiest quarter for us operationally. It's usually our quarter that we experienced peak demand in terms of the services and the product that we provide. Look forward to giving you an update on Q3 and meaningful progress we're making on our infrastructure improvement plans and also the progress that we make on our PFOS, PFOA implementation plans.

偉大的。謝謝大家今天加入我們。當我們進入第三季時，這將再次成為我們營運最繁忙的季度。通常在我們提供的服務和產品方面，我們的季度會經歷高峰需求。期待向您提供第三季度的最新情況、我們在基礎設施改進計劃方面取得的有意義的進展以及我們在 PFOS、PFOA 實施計劃方面取得的進展。

And really keep an eye on fire season. As I mentioned, so far, this has been a really busy fire season. I don't know what the future holds. I don't have a crystal ball, but I will tell you, it has been very busy from a fire season perspective so far this year. So we look forward to giving everyone a detailed update in Q3. And I tell them, please be safe, and we'll talk to everyone again real soon.

並真正關注火災季節。正如我所提到的，到目前為止，這是一個非常繁忙的火災季節。我不知道未來會怎樣。我沒有水晶球，但我會告訴你，從火災季節的角度來看，今年到目前為止一直非常繁忙。所以我們期待在第三季為大家提供詳細的更新。我告訴他們，請注意安全，我們很快就會再次與大家交談。

Thank you for joining us here today. Thanks.

感謝您今天加入我們。謝謝。

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝大家的加入。您現在可以斷開連線。