California Water Service Group (CWT) 2025 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Hello. My name is Dustin and I will be your conference operator today. At this time, I would like to welcome you to California Water Service Group third-quarter 2025 earnings conference call. (Operator Instructions)

女士們、先生們，感謝你們的耐心等待。你好。我叫達斯汀，今天我將擔任你們的會議接線生。現在，我謹代表加州水務集團歡迎各位參加2025年第三季財報電話會議。（操作說明）

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

現在我將把會議交給高級副總裁、財務長兼財務主管詹姆斯·P·林奇先生。請繼續。

Thank you, Justin. Welcome, everyone, to the third quarter 2025 results call for California Water Service Group. With me today is Marty Kropelnicki, our Chairman and CEO; and Greg Milleman, our Vice President of Rates and Regulatory Affairs. Replay dial-in information for this call can be found in our quarterly results earnings release, which was issued earlier today. The call replay will be available until November 29, 2025.

謝謝你，賈斯汀。歡迎各位參加加州水務集團2025年第三季業績電話會議。今天陪同我的是我們的董事長兼執行長馬蒂·克羅佩爾尼基，以及我們的費率和監管事務副總裁格雷格·米勒曼。本次電話會議的重播撥入資訊可在我們今天稍早發布的季度業績報告中找到。電話錄音重播將保留至 2025 年 11 月 29 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. Before looking at our third quarter 2025 results, I'd like to cover forward-looking statements.

提醒一下，在開始之前，公司準備了一份投影片，用於今天的財報電話會議。這份簡報配有8K表格，也可在公司網站www.calwatergroup.com上取得。在介紹我們2025年第三季業績之前，我想先談談前瞻性聲明。

During our call, we 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. As a result, we strongly advise all current shareholders and interested parties to carefully read the company's disclosures on risks and uncertainties found in our Form 10-K, Form 10-Q, press releases and other reports filed with the Securities and Exchange Commission.

在電話會議期間，我們可能會發表一些前瞻性聲明。由於這些聲明涉及未來事件，因此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。因此，我們強烈建議所有現有股東和相關人士仔細閱讀公司在 10-K 表格、10-Q 表格、新聞稿以及向美國證券交易委員會提交的其他報告中披露的風險和不確定性資訊。

And now, I will turn the call over to Marty.

現在，我將把電話交給馬蒂。

Thank you, Jim. Good morning, everyone. Thanks for joining us today. Happy Fall. A few items to update you on. First and foremost, I want to start and give a quick update on our 2024 General Rate Case. The administrative law judge assigned to this case a few weeks ago indicated that he may need additional time to process the rate case given the size and complexity. It's a little different than the rate case we had last time that was significantly delayed. We know this judge is actively working on the case.

謝謝你，吉姆。各位早安。感謝您今天收看我們的節目。秋季快樂。有幾件事需要向您報告。首先，我想先簡單介紹一下我們 2024 年一般費率案件的最新進展。幾週前被指派負責此案的行政法官表示，鑑於案件的規模和複雜性，他可能需要更多時間來處理費率案件。這和我們上次一次嚴重延誤的費率調整案略有不同。我們知道這位法官正在積極處理此案。

Additionally, the assigned Commissioner continues to stress the importance of getting decisions out on time if not early. In addition, during that meeting, the judge also authorized us to file a Tier 1 advice letter on January 1 for inflationary offset if their decision is delayed. That is really different than what we've gone through before historically at Cal Water with the California Public Utilities Commission.

此外，指定的專員繼續強調及時（甚至提前）做出決定的重要性。此外，在那次會議上，法官還授權我們如果他們的決定被推遲，可以在 1 月 1 日提交一份一級諮詢信，以抵消通貨膨脹的影響。這與加州水務公司以往與加州公共事業委員會的合作經驗截然不同。

This would essentially, if they are late, allow us to put an inflationary step increase with a Tier 1 advice letter effective January 1. Additionally, the judge also granted us a memo account, which gives us the authority to track and recover our cost, revenue and cost that would normally be recovered if the rate case was effective on January 1, 2026. So I think this is all good news.

如果他們遲到，這實際上將允許我們從 1 月 1 日起透過一級建議信進行通貨膨脹階梯式增長。此外，法官還授予我們備忘錄帳戶，這使我們能夠追蹤和收回如果費率案件於 2026 年 1 月 1 日生效，通常會收回的成本、收入和費用。所以我覺得這都是好消息。

Again, we don't believe the delay is going to be significant given the commissioner's comments both in meetings with us as well as in public forums as well as the judge actively working on the rate case. And I give the Commission some huge kudos for being more transparent. For some of those of you that were with us in the last rate case, we didn't know nothing for a long time while the rate case was delayed.

再次強調，鑑於專員在與我們會面以及在公開論壇上的表態，以及法官積極處理費率案件，我們認為此次延誤不會造成重大影響。我對委員會提高透明度的做法表示高度讚揚。對於上次費率案件中與我們一起經歷這一切的人來說，由於費率案件被推遲，我們很長一段時間都一無所知。

So there's good communication going on. They're putting steps in place in the event that if the decision is slightly delayed. But given where we are right now, I do not believe there will be a significant delay. Greg Milleman will talk about that a little bit later in the deck. Before I turn the call back over to Jim, I want to update you on a couple of things, including a strong financial performance as well as our operational highlights for the first nine months of 2025.

所以溝通很順暢。他們正在製定應對措施，以防決策稍有延遲。但就目前的情況來看，我認為不會有重大延誤。格雷格·米勒曼稍後會在講台上談到這一點。在將電話轉回給吉姆之前，我想向大家匯報幾件事，包括強勁的財務業績以及我們 2025 年前九個月的營運亮點。

First and foremost, we continue to invest in our water infrastructure. During the quarter, we invested $135 million. That's up 14.8% so almost 15% Q3 of this year over Q3 of last year and were up 10% year-to-date over 2024. In addition, during the quarter, Jim's team was busy. They refinanced short-term borrowings with the issuance of $370 million of long-term notes and bonds.

首先，我們將繼續投資於供水基礎設施。本季度，我們投資了 1.35 億美元。今年第三季比去年第三季成長了 14.8%，幾乎成長了 15%，而截至 2024 年，今年迄今成長了 10%。此外，本季吉姆的團隊也很忙。他們透過發行 3.7 億美元的長期票據和債券，為短期借款進行了再融資。

This transaction was significantly oversubscribed. In fact I will tell you for a bond deal, it was the most oversubscribed bond deal I've ever had the pleasure of working on in my 30 years of doing this. The nice thing about having a significantly oversubscribed deal is it helps minimize credit spreads, which lowers costs for our customers over the long run. We have continued our expansion in Texas while we wait for the commission to approve our General Rate Case settlement.

本次交易認購額遠超預期。事實上，我可以告訴你，就債券發行而言，這是我從事這項工作 30 年來參與過的認購最踴躍的債券發行。超額認購交易的好處在於，它有助於最大限度地減少信用利差，從長遠來看，這可以降低客戶的成本。在等待委員會批准我們的一般費率案件和解方案期間，我們繼續在德克薩斯州進行擴張。

We do have an all-party settlement in Texas that we're just waiting for final commission approval on. And we received an additional $24 million in net PFAS settlement proceeds during the quarter, which brings our year-to-date total recovery to about $35 million. Again, this will be a direct offset for customer costs as we implement the new PFAS rules.

我們在德克薩斯州達成了一項各方參與的和解協議，目前正在等待委員會的最終批准。本季我們又收到了 2,400 萬美元的 PFAS 淨和解款項，使我們今年迄今的總回收額達到約 3,500 萬美元。同樣，隨著我們實施新的 PFAS 規則，這將直接抵消客戶的成本。

In addition to that, we've made steady advancement across multiple regulatory proceedings in the service territories that we operate in. So it was a very, very, very busy third quarter. The third quarter this year is the third year of the rate case, which is always the hardest year for us in California and California is by far our largest operating entity. And as Jim is going to walk through, the financial performance continues to be quite good during the third year of a rate case as we wait for regulatory relief.

除此之外，我們在我們營運的服務區域的多個監管程序中也取得了穩定進展。所以第三季非常非常非常忙碌。今年第三季是費率案件的第三年，這始終是我們在加州最艱難的一年，而加州是我們迄今為止最大的營運實體。正如吉姆將要介紹的那樣，在等待監管部門推出政策豁免措施的第三年，利率申訴期間的財務表現依然相當不錯。

So Jim, I'm going to turn it over back to you.

吉姆，現在我把任務交還給你了。

Great. Thanks, Marty. Well, as Marty mentioned, we did experience a strong financial performance and again, that is all the more meaningful considering we are in the third year of the rate case and that tends to be the year where we're most constrained from an earnings perspective and a cash flow perspective.

偉大的。謝謝你，馬蒂。正如馬蒂所提到的，我們的財務表現確實表現強勁，而且考慮到我們正處於利率調整的第三年，這一成績就顯得更加意義重大，因為第三年往往是我們在盈利和現金流方面受到最大限制的一年。

So we're very pleased with the performance. Q3 2025 revenue increased $11.6 million or 3.9% to $311.2 million and that compares with revenue of $299.6 million in Q3 of 2024. Net income for the quarter was $61.2 million or $1.03 per diluted share and that's consistent with our prior year net income of $60.7 million or $1.03 per diluted share.

我們對這次演出非常滿意。2025 年第三季營收成長 1,160 萬美元，增幅 3.9%，達到 3.112 億美元，而 2024 年第三季營收為 2.996 億美元。本季淨利為 6,120 萬美元，即每股攤薄收益 1.03 美元，與去年同期淨利 6,070 萬美元，即每股攤薄收益 1.03 美元基本一致。

If we move to slide 6, you can see the impact of the activity during the third quarter and the impact that that activity was having on our results as compared to 2024. The primary drivers were the tariff rate increases and income tax rate changes, which combined added $0.30 per diluted share. And that was mainly offset by consumption decreases, unbilled revenue changes and water production rate increases, which combined totaled $0.19 per share. In addition, depreciation and interest rate expenses combined added $0.09 of additional expenses per share.

如果我們翻到第 6 張投影片，您可以看到第三季活動的影響，以及與 2024 年相比，活動對我們業績的影響。主要驅動因素是關稅稅率上調和所得稅稅率變化，這兩項因素合計使每股稀釋收益增加 0.30 美元。而這主要被消費量下降、未計費收入變化和水產量增加所抵消，這些因素加起來每股收益為 0.19 美元。此外，折舊和利息支出合計使每股額外支出增加 0.09 美元。

Slide 7 shows our year-to-date financial results. And as we discussed on our Q2 2025 call, the company's delayed 2021 general rate case decision did result in interim rate relief that was recorded in 2024. In reporting our 2025 year-to-date results, we present both GAAP and non-GAAP metrics for 2024, which you can see on the next several slides.

第 7 張幻燈片展示了我們今年迄今為止的財務表現。正如我們在 2025 年第二季度電話會議上討論的那樣，公司推遲的 2021 年一般費率案件決定確實帶來了臨時費率減免，該減免已於 2024 年記錄在案。在報告我們 2025 年至今的業績時，我們將展示 2024 年的 GAAP 和非 GAAP 指標，您可以在接下來的幾張投影片中看到這些指標。

The non-GAAP financial measures effectively remove the impact of the 2023 interim rate relief from the 2024 results. Operating revenue for the first nine months of 2025 was $780.2 million compared to $814.6 million for the first nine months of 2024. That represents a decrease of $34.4 million or 4.2%.

非GAAP財務指標有效地消除了2023年中期利率減免對2024年業績的影響。2025 年前九個月的營業收入為 7.802 億美元，而 2024 年前九個月的營業收入為 8.146 億美元。這意味著減少了 3,440 萬美元，降幅為 4.2%。

However, when you remove the 2023 interim rate relief from 2024 results, our year-to-date revenue in 2025 actually increased $53.1 million or 7.3% over the non-GAAP 2024 revenue. Net income attributable to group was $116.7 million or $1.96 per diluted share. That's a $54.4 million or 31.8% decrease compared to $171.1 million or $2.93 per diluted share compared to the same period in 2024.

然而，如果從 2024 年的業績中剔除 2023 年的臨時利率減免，我們 2025 年的年初至今收入實際上比 2024 年的非 GAAP 收入增加了 5,310 萬美元，增幅為 7.3%。歸屬於集團的淨利潤為 1.167 億美元，即每股攤薄收益 1.96 美元。與 2024 年同期相比，這一數字減少了 5,440 萬美元，降幅達 31.8%（2024 年同期為 1.711 億美元，即每股攤薄收益 2.93 美元）。

But again, in 2023 when you remove the interim rate relief from the 2024 results, our 2025 year-to-date net income actually increased $9.8 million or 9.9% over non-GAAP 2024 year-to-date net income and earnings per share. That's an increase of $0.12 in terms of our earnings per share. The primary drivers of our year-to-date diluted earnings per share when compared to non-GAAP 2024 results were tariff rate changes, consumption and income tax rate changes, which added $0.76 per diluted share.

但是，在 2023 年，如果從 2024 年的業績中剔除中期利率減免，我們 2025 年迄今的淨收入實際上比 2024 年非 GAAP 迄今為止的淨收入和每股收益增加了 980 萬美元，增幅為 9.9%。這意味著我們的每股收益增加了 0.12 美元。與 2024 年非 GAAP 業績相比，我們今年迄今稀釋後每股收益的主要驅動因素是關稅稅率變化、消費稅率和所得稅稅率變化，這些因素使稀釋後每股收益增加了 0.76 美元。

In addition, recall that in Q1 2025, we recorded the recovery of the California Palos Verdes pipeline memorandum account, which added another $0.05 per share. These increases were partially offset by water production rate volume increases, which totaled $0.29 per share and an increase in depreciation expense that was $0.13 per share.

此外，請記住，在 2025 年第一季度，我們記錄了加州帕洛斯弗迪斯管道備忘錄帳戶的收回，這為每股增加了 0.05 美元。這些成長部分被水產量增加所抵消，總計每股增加 0.29 美元，以及折舊費用增加，每股增加 0.13 美元。

Moving to slide 9. We continue to make significant investments in our water infrastructure, as Marty mentioned, in order to continue the delivery of our safe and reliable water service. Our capital investments for the quarter and year-to-date were $135.2 million and $364.7 million, respectively, and that represents on a year-to-date basis a 9.8% or roughly 10% increase compared to 2024. As a reminder, our capital investments do not include an estimated $217 million of remaining PFAS project expenses. We expect we'll incur those over the next several years.

切換到第9張投影片。正如馬蒂所提到的那樣，我們將繼續對供水基礎設施進行大量投資，以繼續提供安全可靠的供水服務。本季和年初至今的資本投資分別為 1.352 億美元和 3.647 億美元，與 2024 年相比，年初至今的投資額成長了 9.8% 或約 10%。需要提醒的是，我們的資本投資不包括預計剩餘的 PFAS 項目費用為 2.17 億美元。我們預計未來幾年內將會產生這些費用。

Turning to slide 10. The positive impact of our capital investment program and what it is having on our regulated rate base is presented on this slide. If approved as requested, the 2024 California GRC and infrastructure improvement plan coupled with the planned capital investments in our utilities and other states will result in a compounded annual rate base growth of almost 12%.

翻到第10張投影片。本投影片展示了我們的資本投資計畫的正面影響及其對我們受監管費率基礎的影響。如果按要求獲得批准，2024 年加州 GRC 和基礎設施改善計劃，加上我們公用事業和其他州的計劃資本投資，將導致年複合費率基數增長近 12%。

Moving to slide 11. We continue to maintain a strong liquidity profile to execute our capital plan and explore strategic M&A investments. As of the end of the quarter, we had $76 million in unrestricted cash and $45.6 million in restricted cash. We also had $255 million available on our bank lines of credit. As Marty mentioned, in October we successfully completed $370 million in long-term financing. That included $170 million of senior unsecured notes that we issued at group and $200 million of first mortgage bonds that we issued at Cal Water.

切換到第11張投影片。我們將繼續保持強勁的流動性，以執行我們的資本計劃並探索策略性併購投資。截至本季末，我們有 7,600 萬美元的非限制性現金和 4,560 萬美元的限制性現金。我們還有2.55億美元的銀行信貸額度可用。正如馬蒂所提到的，我們在 10 月成功完成了 3.7 億美元的長期融資。其中包括我們在集團發行的 1.7 億美元優先無擔保票據，以及我們在加州水務公司發行的 2 億美元第一抵押債券。

The notes carry interest rates of 4.87% and 5.22% and have maturities in 2032 and 2035. The notes also received an A rating from S&P. The bonds, again those are at Cal Water, will mature in 2025 and carry an S&P rating of AA-. The transaction closed on October 1 and it will further strengthen our balance sheet and support our ongoing infrastructure investments.

這些票據的利率分別為 4.87% 和 5.22%，到期日分別為 2032 年和 2035 年。這些債券也獲得了標普的 A 級。這些債券（同樣是加州水務公司發行的）將於 2025 年到期，標普評級為 AA-。該交易於10月1日完成，這將進一步增強我們的資產負債表，並支持我們正在進行的基礎建設投資。

With that, I'll now turn the call back over to Marty.

好了，現在我把電話轉回給馬蒂。

Jim, one clarification. The bonds, which will mature in 2055.

吉姆，有一點需要澄清。這些債券將於 2055 年到期。

The bonds do mature in 2055, yes.

是的，這些債券將於 2055 年到期。

Thank you for clarifying that. I'm on slide 12 looking at our dividend program. We're pleased that yesterday, our Board announced and declared our 323rd consecutive quarterly dividend in the amount of $0.30 a share. Earlier this year in January, the Board approved our 58th annual dividend increase as a publicly traded company. This dividend increase for 2025 represents a 10.71% dividend increase and results in a 7.7% five-year compound annual growth rate for our dividend.

謝謝你的澄清。我正在看第12頁投影片，內容是我們的股利計畫。我們很高興地宣布，董事會昨天宣布並批准了連續第 323 個季度派發股息，每股 0.30 美元。今年一月，董事會批准了我們作為上市公司的第58次年度股息成長。2025 年的此次股息成長相當於股息成長 10.71%，五年複合年增長率達 7.7%。

Looking ahead on slide 13 and talking about some of our priorities on growth. As mentioned last quarter, BVRT, which is a joint venture that we own 94% or 95% of, continues to represent a strong area of interest and growth for the company. California Water Service Group made an initial investment in this subsidiary in 2021 with the goal that was to support the water ancillary utility development in the South Austin, San Antonio mega region.

接下來請看第 13 張投影片，談談我們的一些成長重點。正如上個季度所提到的，我們擁有 94% 或 95% 股份的合資企業 BVRT 仍然是公司重點關注和成長的領域。加州水務集團於 2021 年對該子公司進行了首次投資，目標是支持奧斯汀南部、聖安東尼奧大都會地區的水務輔助設施發展。

Year-to-date we've added 1,100 new connections to our utility services, the utilities that we started in that area back in 2021 and 2022. That puts us just shy of 5,000 connections added to our system. In addition to the 1,100 connections that we've added so far year-to-date this year, we have another 15,500 committed, but not connected customers.

今年迄今為止，我們已為公用事業服務新增了 1100 個連接，這些公用事業是我們早在 2021 年和 2022 年就在該地區開設的。這樣一來，我們的系統新增連線數就接近 5000 個了。除了今年迄今為止我們新增的 1100 個連線之外，我們還有 15,500 個已承諾但尚未連線的客戶。

These are customers who have provided deposits or developers who put deposits in escrow waiting to connect to our systems as new houses are being built. This region currently has a population of 5 million people and is projected to exceed 8 million by 2050, which makes it comparable to the Dallas-Fort Worth region today.

這些客戶是已支付定金的客戶，或是已將定金存入第三方託管帳戶的開發商，他們正在建造新房，等待接入我們的系統。該地區目前人口為 500 萬，預計到 2050 年將超過 800 萬，與今天的達拉斯-沃斯堡地區相當。

The biggest challenge for growth in this area is timely infrastructure development, especially roads, water and wastewater systems. We believe this area continues to provide a strong opportunity for Cal Water to partner with state and local and the private sector to align our utility investments to support the state's economic development in this region. So very happy with the growth that we're seeing in BVRT.

該地區發展面臨的最大挑戰是基礎設施的及時建設，特別是道路、供水和污水處理系統。我們相信，該地區將繼續為加州水務公司提供與州政府、地方政府和私營部門合作的良好機會，使我們的公用事業投資與支持該地區的加州經濟發展相協調。我們對BVRT的發展感到非常高興。

And these were greenfield developments that five years ago there was nothing there, basically ranch land where developers went in and established permitting to build large tract family housing. On other fronts on the Texas side, we have reached a full settlement with the Public Utilities Commission in Texas with our first-rate case. We're waiting for approval for that, and we expect that to come in the fourth quarter of this year.

這些都是綠地開發項目，五年前那裡還是一片荒地，基本上是牧場，開發商進入那裡並獲得了建造大片家庭住宅的許可。在德州方面，我們憑藉著一流的案件，與德州公共事業委員會達成了全面和解。我們正在等待審批，預計在今年第四季獲得批准。

From a growth perspective, we're working closely with major developers to support their water and wastewater infrastructure needs and expect several new deals in Q4 of 2025 as well as when we move into 2026. To further that, we're pursuing alternative water resources to serve the growth in that area, including a private public partnership with the Guadalupe Basin River Authority to bring water into that South Austin market through pipeline expansion.

從成長的角度來看，我們正在與主要開發商密切合作，以支持他們的供水和污水處理基礎設施需求，並預計在 2025 年第四季以及進入 2026 年時將達成幾項新交易。為了進一步實現這一目標，我們正在尋求替代水資源來滿足該地區的成長需求，包括與瓜達盧佩河流域管理局建立公私合作關係，透過擴建管道將水引入奧斯汀南部市場。

I'd like to move on to slide 14 to give you an update on PFAS. The EPA has reaffirmed the maximum contaminant level for PFOA and PFAS at four parts per trillion and we continue to assess the standards for additional PFAS compounds. So this is really the start of the PFAS family in forever chemicals.

接下來我想轉到第 14 張投影片，向大家介紹一下 PFAS 的最新情況。美國環保署重申了 PFOA 和 PFAS 的最大污染物濃度限值為兆分之四，我們將繼續評估其他 PFAS 化合物的標準。所以這才是永久性化學物質中 PFAS 家族的真正開端。

For those of you that have really studied it, you'll know there's an estimated 5,000 elements out there they think that are these PFOA and PFAS families that still have to be discovered and researched. So this is the first two PFOA and PFAS and the EPA has reaffirmed the target four parts per trillion.

對於那些真正研究過它的人來說，你們會知道，據估計還有 5000 種元素被認為是 PFOA 和 PFAS 家族的成員，這些元素仍有待發現和研究。所以這是前兩種 PFOA 和 PFAS，美國環保署重申了每萬億分之四的目標。

The agency has proposed extending the compliance deadline for PFOA and PFAS treatment for the first two from 2029 to 2031 with the final rule expected in 2026. States are taking varied approaches. Some like the State of Washington, as I mentioned last quarter, have adopted their own rules, which align to the prior EPA guidelines while others continue to evaluate the local implementation timelines and the effects within their state.

該機構提議將 PFOA 和 PFAS 處理的合規期限從 2029 年延長至 2031 年，最終規則預計將於 2026 年出台。各國採取的因應措施各不相同。正如我上個季度提到的，一些州，例如華盛頓州，已經制定了自己的規則，這些規則與先前的 EPA 指導方針相一致，而其他州則繼續評估當地的實施時間表以及在本州的影響。

From a group perspective, we are managing our PFOA and PFAS programs across the enterprise with one project team that's responsible for coordinating across the enterprise. Cal Water remains focused on delivering safe high-quality water through continued investment in treatment systems and well replacements across California, Washington and New Mexico.

從集團的角度來看，我們透過一個專案團隊負責協調整個企業的 PFOA 和 PFAS 項目，從而管理整個企業的 PFOA 和 PFAS 項目。加州水務公司將繼續致力於透過對加州、華盛頓州和新墨西哥州的水處理系統和水井更換進行持續投資，提供安全優質的飲用水。

As part of this effort, certain treatment will potentially shift between the years. And as Jim talked about our capital growth rate, and just to remind everyone, we have separated out PFAS and it's not included in those estimates. It's included in the footnotes on that slide. So we estimate there's approximately $217 million of PFAS investment needed between 2025 and 2029 to better align with the requirements that are coming out.

作為這項工作的一部分，某些治療方法可能會逐年改變。正如吉姆談到我們的資本成長率時所說，為了提醒大家，我們已經將 PFAS 單獨列出，它不包含在這些估算中。內容包含在那張投影片的註腳中。因此，我們估計在 2025 年至 2029 年間，大約需要 2.17 億美元的 PFAS 投資，以更好地符合即將到來的要求。

Our phased adoptive approach helps ensure that we meet the compliance requirements while managing our capital deployment to minimize the impact on our customers. Speaking of minimizing the impact on customers: from a legal standpoint, we continue to make progress recovering PFAS related costs through litigation. Cal Water is a participant in four separate class action settlements related to PFAS contamination. Shawn Bunting, our General Counsel, has played a leadership role for the water industry in these proceedings.

我們分階段實施的方法有助於確保我們滿足合規要求，同時管理我們的資本部署，以最大限度地減少對客戶的影響。說到盡量減少對客戶的影響：從法律角度來看，我們繼續透過訴訟追回與 PFAS 相關的成本。加州水務公司參與了四項與 PFAS 污染相關的集體訴訟和解協議。我們的總法律顧問肖恩·邦廷在這些訴訟中為水務行業發揮了領導作用。

In May of '25, we received $10.6 million in proceedings net of legal fees from the first 3M settlement, the first of 10 scheduled installments. In addition, in September of this year, we received an additional $24.2 million in net proceeds bringing the total year-to-date net of legal fees to almost $35 million.

2025 年 5 月，我們從 3M 公司的第一筆和解金中獲得了 1,060 萬美元的淨收益（扣除法律費用），這是 10 筆預定分期付款中的第一筆。此外，今年 9 月，我們又收到了 2,420 萬美元的淨收益，使今年迄今扣除法律費用後的淨收益總額接近 3,500 萬美元。

This $35 million will be a direct offset to the $217 million that we're talking about, again in an effort to keep rates affordable for our customers and to hold flouters accountable for the damage they've done to the water systems. We expect to begin receiving payments from the remaining settlements later this year and well into 2026.

這 3,500 萬美元將直接抵銷我們正在討論的 2.17 億美元，再次努力維持客戶能夠負擔得起的水費，並追究那些藐視水費者對其對供水系統造成的損害的責任。我們預計今年稍後以及 2026 年陸續收到剩餘和解款項。

I'm now going to turn the call over to Greg Milleman for an update on the regulatory side. Greg?

現在我將把電話交給格雷格·米勒曼，讓他介紹一下監管方面的最新情況。格雷格？

Thank you, Marty. If you'd please turn to slide 15, I'd like to provide some additional comments on our California 2024 General Rate Case. Our General Rate Case continues to move forward. As we mentioned last quarter, hearings before the administrative law judge occurred in May. After the hearings, the ALJ requested additional information that the parties to the proceeding responded to in June.

謝謝你，馬蒂。請翻到第 15 頁，我想就我們的加州 2024 年一般費率案補充一些意見。我們的一般費率案件繼續推進。正如我們上個季度提到的，行政法官的聽證會在5月份舉行。聽證會結束後，行政法官要求提供補充訊息，訴訟各方於 6 月作出了回應。

We then filed our briefs on July 7 and our reply briefs were filed on July 28. A final law and motion hearing was scheduled for August 5, at which point the case was turned over to the ALJ to draft a proposed decision. As Marty mentioned, in October, the ALJ requested more time due to the complexity and size of the case.

我們於 7 月 7 日提交了訴訟摘要，並於 7 月 28 日提交了答辯摘要。最終的法律動議聽證會定於 8 月 5 日舉行，屆時該案將移交給行政法官起草擬議裁決。正如馬蒂所提到的，10 月份，行政法官因案件的複雜性和規模要求更多時間。

At the same time in the event of a decision delayed beyond January 1, 2026, he authorized the company to implement an interim rate increase effective January 1, 2026, tied to CPI. He also approved an Interim Rate Memorandum Account to capture lost revenues resulting from a decision delay. While we are disappointed with the prospect of a delayed decision, we are pleased with the ALJ's action to allow an interim rate increase and the lost revenue tracking account and are still confident that we will see a resolution in the near term.

同時，如果決定推遲到 2026 年 1 月 1 日之後，他授權公司實施一項與消費者物價指數 (CPI) 掛鉤的臨時加息，該加息自 2026 年 1 月 1 日起生效。他還批准設立臨時費率備忘錄帳戶，以彌補因決策延遲而造成的收入損失。雖然我們對可能延遲做出決定感到失望，但我們對行政法官允許臨時提高費率和設立損失收入追蹤帳戶的做法感到滿意，並且仍然相信我們會在近期看到解決方案。

Turning to slide 16. We have other regulatory updates in the other states where we operate. In Hawaii, the Public Utility Commission approved a $4.7 million revenue increase for Hawaii Water's five Waikoloa systems effective October 9, 2025. In Washington State, Washington Water filed a rate case with the Washington Utilities and Transportation Commission seeking a $4.9 million revenue increase to recover system investments and higher operating costs.

翻到第16張幻燈片。我們在其他營運所在州也有其他監管方面的更新。夏威夷公共事業委員會批准夏威夷水務公司旗下五個 Waikoloa 供水系統的收入增加 470 萬美元，該增幅將於 2025 年 10 月 9 日生效。在華盛頓州，華盛頓水務公司向華盛頓州公用事業和運輸委員會提交了一份費率申請，尋求增加 490 萬美元的收入，以彌補系統投資和更高的營運成本。

The utility also has completed key infrastructures aimed at enhancing reliability and water quality. The proposed effective date of these new rates would be December 15, 2025. And finally, as Marty mentioned, in Texas, our BVRT utility filed a rate case in June 2024 with the Public Utility Commission of Texas covering five systems. During the second quarter of 2025, BVRT reached a settlement with consumer advocates and the Public Utility Commission of Texas approval is currently pending.

該公用事業公司還完成了旨在提高可靠性和水質的關鍵基礎設施建設。這些新費率的擬定生效日期為 2025 年 12 月 15 日。最後，正如馬蒂所提到的，在德克薩斯州，我們的 BVRT 公用事業公司於 2024 年 6 月向德克薩斯州公共事業委員會提交了一份費率申請，涵蓋五個系統。2025 年第二季度，BVRT 與消費者權益倡議者達成和解，目前正在等待德州公共事業委員會的批准。

With that, I will now turn the call back over to you, Marty.

那麼，我現在把電話交還給你，馬蒂。

Greg, can you just comment the communications of the commission this rate case cycle versus the last rate case cycle in California? Because from my perspective, it's been really different, a huge improvement in terms of transparency and communication with the Commissioner and judges. Can you please just give me your perspective on that as well?

Greg，你能否就加州本次費率調整週期與上一次費率調整週期中委員會的溝通情況發表一下看法？因為從我的角度來看，情況真的大不相同了，在與專員和法官的透明度和溝通方面有了巨大的改進。您能否也談談您的看法？

Yes, absolutely. Actually since we received the -- had the October 3 update from the ALJ, we've spoken with the Commissioner 4 times during that time frame at various meetings and events. And all 4 times, he's commented that he would like to see this decision moved out on a timely basis. We've never had that in the 2021 case. And so I think that's why we're optimistic that even if the case is delayed a little bit, we will be seeing something much sooner in this 2024 case.

是的，絕對的。事實上，自從我們收到 10 月 3 日 ALJ 的更新後，我們在此期間在各種會議和活動中與專員進行了 4 次交談。他四次都表示希望這項決定能夠及時公佈。2021 年我們從未遇過這種情況。所以我認為，這就是為什麼我們樂觀地認為，即使案件審理會稍微延遲一下，我們也會在 2024 年的這個案件中很快看到一些進展。

Yes. It's great seeing the Commissioner was really the assigned hearing officers where the Commissioner is so involved in the rate case and really sticking to it as well as the communications from the judge I think have been, I would almost call them, outstanding. I don't want to get too far ahead of our skis, but I mean the proactiveness on both the judge and the Commissioner I think is really different than what we've experienced before.

是的。很高興看到專員確實擔任了指定的聽證官，專員本人也積極參與費率案件，並堅持到底。我認為法官的溝通也堪稱出色。我不想操之過急，但我的意思是，法官和專員的積極主動性確實與我們以前經歷過的截然不同。

Absolutely.

絕對地。

Thanks, Greg. Before I close out, I want to take a moment to reflect on what we achieved so far this year. Despite operating in the third and most challenging year of our rate case cycle in California, we delivered solid financial performance and operational performance. We've continued to strengthen our balance sheet with the $370 million of long-term financing that Jim and his team concluded in the third quarter.

謝謝你，格雷格。在結束之前，我想花點時間回顧一下我們今年迄今為止的成就。儘管我們正處於加州費率調整週期的第三年，也是最具挑戰性的一年，但我們仍然取得了穩健的財務表現和營運表現。我們透過吉姆和他的團隊在第三季完成的 3.7 億美元長期融資，繼續加強了我們的資產負債表。

And we've continued to invest heavily in sustainability and the reliability and the quality of our water systems with the $365 million invested in the nine months year-to-date for 2025. We've also continued to make meaningful progress on PFAS treatment and the recovery of the $35 million in net settlement proceeds received year-to-date.

我們持續增加對永續性、供水系統的可靠性和品質的投入，截至2025年9月9日，已投入3.65億美元。我們在 PFAS 處理方面也繼續取得了實質進展，並收回了今年迄今收到的 3500 萬美元淨和解款項。

Again, the PFAS treatments, we'll continue to call those out separate from our normal capital program so you can clearly see what the net impact is to our customers as well as to rate base and any offset on the recoveries that we have. As Greg said, we've been busy on the regulatory side making meaningful progress in Hawaii as well as Washington and Texas as we stayed laser focused on getting our 2021 rate case done -- 2023 rate case done for California '24.

再次強調，PFAS 處理項目，我們將繼續單獨列出，與我們的正常資本計劃分開，以便您清楚地看到對我們的客戶、費率基礎以及我們回收款項的任何抵消的淨影響。正如格雷格所說，我們在監管方面一直很忙，在夏威夷、華盛頓州和德克薩斯州都取得了實質性進展，同時我們始終專注於完成 2021 年的費率案件——2023 年的費率案件，以及 2024 年加州的費率案件。

As we look ahead to 2025, a couple of things I think are important. On October 14 of this year, we celebrated our 99th anniversary since our founding in 1926. Some of you heard me talk about this. We were founded by three World War I veterans who came back from the war who had a profound sense of service not only to their country, but to customers, communities and the stockholders. As we move into 2026, which will be our 100th year or our centennial year of operations, our priorities really haven't changed.

展望 2025 年，我認為有幾件事很重要。今年10月14日，我們慶祝了公司成立99週年，公司成立於1926年。你們當中有些人聽我說過這件事。我們公司由三位參與第一次世界大戰的老兵創立，他們從戰場歸來後，不僅對國家，而且對客戶、社區和股東都懷有強烈的服務意識。展望 2026 年，也就是我們營運的第 100 個年頭，我們的優先事項並沒有真正改變。

It's maintaining operational excellence, executing our capital programs responsibly and achieving timely outcomes in our rate cases and continue to deliver value for both our customers and our stockholders. With our disciplined financial approach, constructive regulatory relations and our commitment to sustainable and reliable growth, we're confident that California Water Service Group is well positioned as we move into our 100th year of operations, which we look forward to celebrating next year.

保持卓越的營運水平，負責任地執行我們的資本計劃，及時處理費率案件並取得成果，繼續為我們的客戶和股東創造價值。憑藉我們嚴謹的財務管理、建設性的監管關係以及對可持續可靠增長的承諾，我們有信心，加州水務集團已做好充分準備，迎接我們即將迎來的第 100 個運營年，我們期待著明年慶祝這一里程碑。

So Dustin, with that, I'm going to turn it over to you and we'll start the Q&A, please.

那麼，達斯汀，接下來就交給你了，我們開始問答環節吧。

(Operator Instructions)

（操作說明）

Angie Storozynski, Seaport.

安吉·斯托羅津斯基，海港。

Thank you. So my main question is about your rate base growth projections. I understand that those are slide, I don't see even the number. Again, the rate base growth implying 11.7%. That's based on a filed rate case, GRC rate case.

謝謝。所以我的主要問題是關於你們的費率基礎成長預測。我知道那些是投影片，但我連數字都看不到。再次，利率基礎成長意味著 11.7%。這是根據已提交的費率申請（GRC費率申請）得出的結論。

Now we have a partial settlement in this rate case, which seems to take down CapEx projections, and I know that there's PFAS spending that could be additive here. But as we sit today, how much of a drag do I have on those projections for rate base versus what you're showing in that slide, in slide 10?

現在，我們在此次費率案件中達成了部分和解，這似乎降低了資本支出預測，而且我知道還有 PFAS 支出可能會增加這部分支出。但就目前而言，與您在第 10 張投影片中所展示的內容相比，我對這些利率基礎預測的阻力有多大？

So Angie, thanks for the question. So right now we don't have a partial settlement in California, which is the largest driver of our capital expenditures. We are building in anticipation of achieving most of what we have asked for in the rate case. As you know, 2025 is the first year of the '26 rate case just because of the wonkiness in California and the way that they line their capital requirements up with the rate case delivery.

安吉，謝謝你的提問。所以目前我們在加州還沒有達成部分和解協議，而加州是我們資本支出的最大動力。我們正在積極建設，以期實現我們在費率調整案中提出的大部分要求。如您所知，2025 年是 2026 年費率案的第一年，這僅僅是因為加州的規章制度比較複雜，以及他們將資本要求與費率案的實施時間安排在一起的方式。

So at this point, the settlements that we've talked about -- the settlement that we did talk about was the one in Texas, which we're really pleased on and we're waiting for regulatory approval there on that particular rate case. We still feel committed to the projections that we've provided in the slide.

所以目前為止，我們談到的和解方案——我們確實談到了德克薩斯州的和解方案，我們對此非常滿意，我們正在等待該特定費率案件的監管部門批准。我們仍然堅持我們在幻燈片中提供的預測。

We think that we have made a good case in California to get the majority, if not all, of what we have asked for recognizing the fact that historically, there's a discount that we receive from the commission as we go through the remaining portions of the rate case to get to the final decision. I don't know, Marty, if you want to --

我們認為，我們在加州已經充分論證了我們要求的大部分（如果不是全部）款項，因為從歷史上看，在我們完成費率案件的剩餘部分並最終做出決定之前，我們會從委員會獲得折扣。我不知道，馬蒂，你是否願意--

Yes. I think Angie's question so if you look at the forecasted growth those three years out, they're kind of boxed and I say this is what we filed for. And as Greg always reminds me, we never get 100% of what we ask for in the rate case process. Having said that, if you go back and look at the last 10- to 15-year average, we typically average about a 10% compound annual growth rate on our capital spending year-over-year, which ultimately flows into the rate base. So for planning purposes, Angie, probably around 10% is probably a decent number to use excluding the PFAS.

是的。我認為安吉的問題是，如果你看一下未來三年的預測成長，它們有點局限，我說這是我們提交的申請。正如格雷格總是提醒我的那樣，在費率調整過程中，我們永遠無法 100% 得到我們要求的。話雖如此，如果你回顧過去 10 到 15 年的平均情況，我們的資本支出通常每年平均複合年增長率約為 10%，這最終會流入利率基礎。所以，安吉，出於規劃目的，排除 PFAS 後，10% 左右可能是比較合適的數字。

And Jim has been very careful on all the slides that we put out there to footnote what our estimates are and those estimates are still evolving, but they're obviously getting more firmed up every time we go into another quarter because the engineers are doing more and more work on the treatment that we need to provide. But that will be incremental rate base growth net any legal proceeds.

吉姆在我們發布的所有幻燈片中都非常謹慎地標註了我們的估算值，這些估算值仍在不斷變化，但顯然每進入下一個季度，它們都會變得更加確定，因為工程師們正在對我們需要提供的治療方案進行越來越多的研究。但這將是扣除任何法律收益後的增量稅率基礎增長。

And that's also why we'll update everyone every quarter on what we've recovered on the legal side. So right now you could take that $217 million less the $35 million. That would be the net rate base estimate as of right now when we have to be in full PFAS compliance. But I expect we'll get some more legal proceeds to come in to help bring that number down.

這也是為什麼我們會每季向大家報告我們在法律上所追回的款項。所以現在你可以用這 2.17 億美元減去 3500 萬美元。這將是目前我們必須全面遵守 PFAS 標準時的淨費率基數估算值。但我預計我們會獲得更多合法收益，以幫助降低這個數字。

Right. I understand the PFAS component that seems relatively small vis-a-vis what's actually in the GRC. But I'm looking at the August filing, right, the undisputed parts with the California advocates, even based on that, there is actually more than this reduction to that rate base projection versus what you're guiding to.

正確的。我理解 PFAS 成分，它相對於 GRC 中的實際成分似乎很小。但是，我正在查看 8 月提交的文件，對吧？即使基於加州倡議者提出的無可爭議的部分，實際上，與你所指導的相比，費率基數預測的減少幅度也不止於此。

Again, it seems like it's actually pretty substantial. It's almost like a 20% reduction versus what you have projected in the rate base. Again just a rough math. And again, I understand that this is just the portion of the settlement. But there was a filing August 4, I mean I'm looking at it right now.

再次看來，這似乎確實相當可觀。這幾乎相當於比您在費率基數中預測的金額減少了 20%。這只是粗略的計算。我再次強調，這只是和解協議的一部分。但8月4日提交了一份文件，我現在正在看。

Angie, what that would be is it's a listing of undisputed items that per the commission, we needed to file it as a settlement and most likely what you're looking in that in there, you're seeing what Cal Water proposed contrasted to what the public advocates proposed. Those are not settlement numbers of capital. That's just the parties' positions and it needed to be attached to the document.

安吉，那份清單列出了委員會要求我們作為和解方案提交的無爭議事項，你很可能在裡面看到的是加州水務公司提出的方案與公共倡導者提出的方案的對比。這些並非資本結算數量。這只是各方的立場，需要附在文件中。

And in fact I think the judge asked the parties to do that to help him expedite doing his legal review to make his conclusion and finding the facts while comparing the two parties. So he lined everything up and this is just one of the areas that he lined up what we asked for versus what the advocates are saying.

事實上，我認為法官要求雙方這樣做是為了幫助他加快法律審查，以便得出結論並找出事實，同時比較雙方的情況。所以他把一切都安排妥當了，這只是他把我們要求的和倡導者們的說法進行對比的其中一個方面。

Okay. So the hope is that the judge doesn't adopt the advocates position basically?

好的。所以，大家希望法官不會採納辯護律師的立場？

Correct, yes.

沒錯。

Yes. I think, Angie, if you go back and look at the last 3 rate cases, kind of the thing I look at is kind of how successful have we been in the last 3 rate cases. And Greg, I think we've been north of 80% of our ask as high as 90% of our ask over the last 3 cycles.

是的。安吉，我覺得，如果你回顧最近 3 個費率案例，我關注的重點是我們在最近 3 個費率案例中取得了多大的成功。格雷格，我認為在過去的三個週期裡，我們的成交量一直超過預期目標的 80%，最高達到 90%。

Correct. Yes.

正確的。是的。

Okay. I understand. But yes, okay. I'm going to actually look at the 2021 rate case, how it compared to the position of (inaudible). It's just that the way I look at it is that you're overstating the rate base growth again at this stage of the rate case proceeding and I'm rooting for you. It's just that I'm looking at the current status of the proceeding. It doesn't seem like you can get close to these numbers.

好的。我明白。好的。我打算仔細研究2021年的利率方案，看看它與之前的利率方案相比如何。（聽不清楚）我只是覺得，在利率調整案審理的這個階段，你又一次誇大了利率基數的成長，我支持你。我只是想了解目前的訴訟進度。看來你不可能接近這些數字。

Angie, let me correct something you said. We haven't overstated anything. That is a really bad word as a public company. Again, what we put in the disclosures is what was asked for in the rate case and that's why we carefully footnoted it so people can clearly see it.

安吉，讓我糾正你剛才說的一句話。我們沒有誇大其詞。對於一家上市公司來說，這是一個非常糟糕的詞。再次強調，我們在揭露文件中列出的內容正是費率案件中要求的，因此我們特意添加了腳註，以便人們能夠清楚地看到。

Our typical growth rate is about 10% on the CapEx line kind of year-over-year over the long haul and obviously those numbers will change. But I'm a little cautious when you say what you said because the disclosures are pretty clear and that's also that way in the 10-Q and 10-K.

從長遠來看，我們資本支出方面的年增長率通常約為 10%，但顯然這些數字會改變。但我對你剛才的說法有點謹慎，因為披露的內容非常清楚，10-Q 和 10-K 文件也是如此。

And Angie, I just would encourage you to give me a call if you take a look at the 2021 rate case because the way the actual capital delivery number was in that rate case was divided between what was allowed in the rate case and subsequently allowed through advice letter filings and it's differentiated in there. Our view is to take a look at what was allowed through both avenues in order to evaluate how successful we were in our capital ask.

安吉，我建議你如果查看 2021 年的費率案例，請給我打個電話，因為該費率案例中實際的資本交付數量被分為費率案例中允許的數量和隨後通過諮詢函備案允許的數量，兩者之間存在區別。我們的觀點是，要看看透過這兩種途徑分別獲得了哪些資金，以便評估我們的資金需求是否成功。

Okay, will do. Thank you.

好的，我會的。謝謝。

(Operator Instructions)

（操作說明）

Davis Sunderland, Baird.

戴維斯桑德蘭，貝爾德。

Thank you, operator, and good morning, guys. As you said, Happy Fall, Marty. Actually I should give credit to Angie for this question, who asked a similar question on the H2O call earlier this week. So I'm going to steal and just kind of modify a little bit.

謝謝接線員，各位早安。正如你所說，秋天快樂，馬蒂。實際上，我應該把這個問題歸功於 Angie，她在本週早些時候的 H2O 電話會議上也問過類似的問題。所以我打算借鏡一下，然後稍微修改一下。

But I guess my first question is just obviously big news earlier this week with American and Essential and the merger, which will bring American into the State of Texas. And I guess my question is does this change how you guys think about growth or willingness to lean into this market or the opportunity there? And then I have one follow-up.

但我想我的第一個問題顯然是關於本週早些時候美國航空和Essential航空合併的大新聞，合併將使美國航空進入德克薩斯州。我想問的是，這是否會改變你們對成長的看法，或改變你們進入這個市場或抓住這個機會的意願？然後我還有一個後續問題。

Yes. I think our stated position kind of on M&A and growth is really kind of the same. Obviously from a planning standpoint, we've been very happy with our organic rate base growth because it's been kind of north of 10% for the last 15 to 20 years. So we're clearly focused on executing our business plans internally. Our primary growth engine is that reinvestment in our existing infrastructure.

是的。我認為我們對併購和成長的既定立場其實基本上相同。從規劃的角度來看，我們對自身的有機費率基礎成長非常滿意，因為在過去的 15 到 20 年裡，這一成長率一直保持在 10% 以上。因此，我們顯然專注於內部執行我們的業務計劃。我們主要的成長引擎是對現有基礎設施的再投資。

Being a West Coast utility, a lot of our infrastructure was built out kind of post World War II and it's now coming to the end of its useful life. So we think we're going to be busy just with replacement infrastructure on the West Coast for the foreseeable future and we don't see that piece of the business slowing down anytime soon.

作為一家西海岸公用事業公司，我們的許多基礎設施都是在二戰後建造的，現在這些基礎設施已經接近使用壽命的終點。因此，我們認為在可預見的未來，我們將忙於西海岸的基礎設施更換工作，我們預計這部分業務不會很快放緩。

From a growth perspective, we think our investment in BVRT has proven to be very, very valuable in terms of being in the right market. Real estate is about location, location, location and that is such a rapidly growing corridor. So we now own seven utilities in that area. We have the partnership with GBRA to bring water in for another 10,000 customers in the South Austin market. So we'll continue to build out that market. And then from an M&A perspective, it's about being opportunistic.

從成長的角度來看，我們認為我們對 BVRT 的投資已被證明非常有價值，因為我們進入了正確的市場。房地產的關鍵在於地段、地段、地段，而這條走廊正處於快速發展階段。所以我們現在在該地區擁有七家公用事業公司。我們與 GBRA 建立了合作關係，將為奧斯汀南部市場的另外 10,000 名客戶提供用水。所以我們會繼續拓展這個市場。從併購的角度來看，關鍵在於把握機會。

I think American and Essential, we know them really well, they're great companies. I'm sure they had their reasons for why they ended up merging. I'm sure those will be in their proxy agreements when they put those out. And so I think there's a lot of reasons why the overlap service territories in our East Coast-based utility. I think Essential has been more in Texas and not as much American.

我認為American和Essential這兩家公司我們都很了解，它們都是很棒的公司。我相信他們最終合併肯定有他們的理由。我相信這些內容都會寫進他們的代理協議裡。所以我認為，我們這家總部位於東岸的公用事業公司出現服務區域重疊的原因有很多。我認為Essential更多是在德克薩斯州，而不是在美國。

So I think with Chris Franklin being in charge of kind of the integration work, they will be evaluating all that, what the footprint is going to look like. So I think there'll be more to come on that. For us, obviously, we're kind of Western states focused from Texas all the way to Hawaii and we're going to stay focused on our business plan as it's developed.

所以我認為，由克里斯富蘭克林負責整合工作，他們會評估所有這些，以及最終的佈局會是什麼樣子。所以我覺得這方面還會有更多進展。很顯然，對我們來說，我們的業務主要集中在從德克薩斯州到夏威夷的西部各州，我們將繼續專注於我們正在製定的商業計劃。

That is super helpful. And then maybe just one more for me. We've obviously been in this higher for longer rate environment for a lot longer than many expected, myself included, and some hawkish comments yesterday from Powell and potentially a lesser likelihood, I'll say, of rates coming down quickly. Just wondering how you guys build this into your guys' planning for the rest of the year looking into 2026 and any other thoughts on that? Thank you.

這太有幫助了。然後，也許就再給我來一杯吧。顯然，我們處於高利率環境的時間比許多人（包括我自己）預期的要長得多，而且鮑威爾昨天發表了一些鷹派言論，我認為利率快速下降的可能性也較小。想問各位是如何將此事納入你們今年剩餘時間的規劃，並展望2026年，以及你們對此還有其他什麼想法嗎？謝謝。

That's a really good question, Davis. For us and look, I'm really happy with our financial results this quarter because if you lay out the timing of the rate case, all the inflation we saw in the last three years, we've really absorbed in the P&L and we've been able to still kind of grow the company. So getting the rate case done in California is going to be really important because that kind of trues up our costs, including that inflationary bubble that we lived in.

戴維斯，你問得真好。對我們來說，我對本季的財務業績非常滿意，因為如果你考慮到利率變動的時間節點，以及過去三年我們所經歷的所有通貨膨脹，我們已經將其完全消化在損益表中，並且我們仍然能夠實現公司的成長。因此，在加州完成費率調整案非常重要，因為這可以校正我們的成本，包括我們曾經經歷的通貨膨脹泡沫。

A couple of things that I think are important especially given California is our largest operating entity is we do have that cost of capital adjustment mechanism. That's a two-way mechanism. So as rates kind of move up and down annually, we are going to evaluate that and we can apply for changes using that mechanism, which I think is a very beneficial mechanism that a lot of people tend to overlook.

我認為有兩件事很重要，尤其考慮到加州是我們最大的營運實體，那就是我們確實有資本成本調整機制。這是一個雙向機制。因此，由於利率每年都會上下波動，我們將對此進行評估，並可以利用這種機制申請調整，我認為這是一個非常有益的機制，但很多人往往忽略了它。

So I think for us, we like to focus on earning our regulatory rate of return. As an economist, my team knows I keep a keen eye on interest rates and what's happening in the economy and we try to stay a step ahead of what's happening. And so we've been able to preserve the balance sheet, continue to grow rate base, continue to grow earnings despite some of the economic headwinds we've really had the last three years or four years.

所以我覺得對我們來說，我們更願意專注於獲得監管規定的報酬率。身為經濟學家，我的團隊知道我密切關注利率和經濟狀況，我們努力做到領先一步。因此，儘管過去三、四年我們確實遇到了一些經濟逆風，但我們仍然能夠保持資產負債表的穩定，繼續擴大費率基礎，繼續提高收益。

And really what will be nice about the next rate case in California assuming rates start to stabilize a little bit more is this bubble that we have, the inflationary bubble that we've had to absorb will be behind us. But again, not too much worried about the bubble because we do have that cost of capital adjustment mechanism in California and that is our largest operating entity. I don't know, Greg, if you want to add anything or Jim, add anything on that?

假設加州利率開始趨於穩定，那麼加州下一次利率調整真正令人欣慰的地方在於，我們不得不承受的通膨泡沫將會消失。但是，我並不太擔心泡沫問題，因為我們在加州有資本成本調整機制，而加州是我們最大的營運實體。格雷格，你或吉姆，你們還有什麼要補充的嗎？

Yes. I would only say, Davis, we did talk a little bit about the fact that we refinanced our short-term debt into long-term debt. I think we got some really favorable rates on that long-term debt and we basically took almost $355 million off of the lines of credit and moved that into the longer-term interest rate environment, if you will.

是的。我只想說，戴維斯，我們確實稍微談了一下我們將短期債務重新融資為長期債務。我認為我們為這筆長期債務爭取到了一些非常優惠的利率，我們基本上從信貸額度中取出了近 3.55 億美元，並將其轉移到了長期利率環境下。

So I think we're positioned very well right now in terms of moving forward. I don't think that if the Fed slows down significantly in terms of bringing the short-term rates down, that would give us any cause to change our current plans.

所以我認為，就未來發展而言，我們目前處於非常有利的位置。我認為，即使聯準會大幅放緩降低短期利率的步伐，也不會給我們改變目前計劃的任何理由。

Yes. I think one of the challenges for the Fed is most people forget about the fact that the Fed is very quant-based. They look at numbers. While with the government shutdown, they have a limited data set that they're evaluating off of. And I think while it wasn't too bad for them for the meeting yesterday, the longer this government shutdown goes on, the more absentee data they won't have to look at as they do their evaluations.

是的。我認為聯準會面臨的挑戰之一是，大多數人忘記了聯準會是一個非常依賴量化分析的機構。他們看數據。由於政府停擺，他們只能利用有限的數據集進行評估。我認為，雖然昨天的會議對他們來說不太糟糕，但政府停擺的時間越長，他們在進行評估時就越不需要查看缺席數據。

And again, if anyone's ever gone to any of the regional quarterly Fed meetings, they are very, very quant focused. And obviously the big thing I think they were focused on yesterday, I haven't read the minutes of the meeting, but I would speculate is that you're seeing a kind of a rapid softening on labor. And I think that was the key component that the Feds were looking at and certainly we're seeing that right now.

再說一遍，如果有人參加過聯準會的任何地區季度會議，就會發現這些會議非常非常注重量化分析。顯然，我認為他們昨天關注的重點是，我還沒有看過會議記錄，但我猜測，勞工問題正在迅速軟化。我認為這正是聯邦政府關注的關鍵因素，而我們現在也確實看到了這一點。

This is all super helpful. Appreciate the time, guys. Thank you very much and best of luck with the rate case rest of the year.

這都非常有幫助。感謝各位抽出時間。非常感謝，祝您今年餘下的利率案件一切順利。

And we'll see you in a few weeks at the Baird Industrial Conference in Chicago. We look forward to seeing you.

幾週後，我們將在芝加哥舉行的貝爾德工業大會上與您會面。我們期待與您見面。

Looking forward to it. Thank you.

非常期待。謝謝。

Thank you. There are no further questions. I will now turn the call back over to our Chairman, President and CEO, Marty Kropelnicki, for closing remarks.

謝謝。沒有其他問題了。現在我將把電話轉回給我們的董事長、總裁兼執行長馬蒂·克羅佩爾尼基，請他作總結發言。

Thanks, Davis. That was a good robust discussion today. Obviously if you may ask any questions, feel free to reach out to us. There's a lot of investor stuff happening in the fourth quarter so Jim and I will be on the road quite a bit; Chicago, New York, et cetera.

謝謝你，戴維斯。今天進行了一場精彩而深入的討論。如果您有任何疑問，歡迎隨時與我們聯繫。第四季有很多與投資者相關的事情發生，所以吉姆和我將經常出差；芝加哥、紐約等等。

So please reach out if you have questions. And we look forward to reporting our year-end results to everyone in February of 2026. So have a great Thanksgiving and a happy holiday. Be safe and we'll talk to everyone really soon. Thank you.

如有任何疑問，請隨時與我們聯繫。我們期待在 2026 年 2 月向大家公佈我們的年終業績。祝您感恩節快樂，假期愉快！注意安全，我們很快就會和大家聯絡。謝謝。

The meeting has now concluded. Thank you all for joining. You may now disconnect.

會議已經結束。感謝各位的參與。您現在可以斷開連線了。