H2O America (HTO) 2024 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the 2024 second-quarter SJW Group financial results conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 SJW 集團 2024 年第二季財務業績電話會議。（操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your first speaker today, Andrew Walters, Chief Financial Officer, Treasurer, Interim Principal Accounting Officer. Please go ahead.

現在我想將會議交給今天的第一位發言人安德魯沃特斯 (Andrew Walters)，他是財務長、財務主管、臨時財務長。請繼續。

Thank you, operator. Welcome to the second-quarter 2024 financial results conference call for SJW Group. I will be presenting today with Eric Thornburg, Chair of the Board, President, and Chief Executive Officer. For those who would like to follow along, slides accompanying our remarks are available on our website at sjwgroup.com.

謝謝你，接線生。歡迎參加 SJW 集團 2024 年第二季財務業績電話會議。今天我將與董事會主席、總裁兼執行長 Eric Thornburg 一起進行演講。對於想要跟進的人，可以在我們的網站 sjwgroup.com 上獲取我們的評論附帶的幻燈片。

Before we begin today, I would like to remind you that this presentation and related materials posted on our website may contain forward-looking statements. These statements are based on estimates and assumptions made by the company in light of its experience, historical trends, current conditions, and expected future results, as well as other factors that the company believes are appropriate under the circumstances.

在今天開始之前，我想提醒您，本簡報和我們網站上發布的相關資料可能包含前瞻性陳述。這些陳述是基於公司根據其經驗、歷史趨勢、當前狀況和預期未來結果以及公司認為在這種情況下適當的其他因素做出的估計和假設。

Many factors could cause the company's actual results and performance to differ materially from those expressed or implied by the forward-looking statements. For a description of some of the factors that could cause actual results to be different from statements in this presentation, we refer you to the financial results press release and our most recent forms, 10-K, 10-Q, and 8-K, filed with the Securities and Exchange Commission, copies of which may be obtained on our website.

許多因素可能導致公司的實際結果和業績與前瞻性陳述中明示或暗示的結果和業績有重大差異。有關可能導致實際結果與本簡報中的陳述不同的一些因素的說明，我們建議您參閱財務結果新聞稿和我們最新的表格 10-K、10-Q 和 8-K，向美國證券交易委員會提交，其副本可在我們的網站上取得。

All forward-looking statements are made as of today, and SJW Group disclaims any duty to update or revise such statements. You will have an opportunity to ask questions at the end of the presentation. This webcast is being recorded, and an archive of the webcast will be available until October 21, 2024. You can access the press release and the webcast at SJW Group's website.

所有前瞻性陳述均截至今日作出，SJW 集團不承擔任何更新或修改此類陳述的責任。您將有機會在演示結束時提問。該網路廣播正在錄製中，網路廣播的存檔將在 2024 年 10 月 21 日之前提供。您可以在 SJW 集團網站上存取新聞稿和網路廣播。

In addition, some of the information discussed today includes the non-GAAP financial measures of adjusted net income and adjusted diluted earnings per share that have not been calculated in accordance with generally accepted accounting principles in the United States or GAAP.

此外，今天討論的一些資訊包括調整後淨利潤和調整後稀釋每股收益的非公認會計原則財務指標，這些指標並未根據美國公認會計原則或公認會計原則計算。

These non-GAAP financial measures should be considered as a supplement to the financial information prepared on a GAAP basis rather than an alternative to the respective GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the table in the appendix of our presentation.

這些非公認會計原則財務指標應被視為以公認會計原則編製的財務資訊的補充，而不是各自公認會計原則財務指標的替代方案。這些非公認會計原則財務指標與最直接可比較的公認會計原則財務指標的調節表列於我們簡報附錄中的表格中。

I will now turn the call over to Eric.

我現在將把電話轉給埃里克。

Welcome, everyone, and thank you for joining us. My name is Eric Thornburg, and it is my honor to serve as Chair, President, and CEO of SJW Group. I'm pleased to share that in the second quarter of 2024, we continued to meet drinking water and environmental regulations, deliver on our public health and environmental stewardship commitments, and provide high-quality water and service to customers.

歡迎大家，感謝您加入我們。我的名字是 Eric Thornburg，我很榮幸能擔任 SJW 集團的董事長、總裁兼執行長。我很高興與大家分享，2024 年第二季度，我們繼續滿足飲用水和環境法規，履行我們的公共衛生和環境管理承諾，並為客戶提供高品質的水和服務。

Importantly, we also experienced the benefits of our focused efforts to listen to, learn from, and meaningfully respond to our stakeholders. For example, in California, we reached an agreement in principle on most issues with the Public Advocates Office and WRATES, a local water rates advocacy organization, in our 2025 through 2027 general rate case.

重要的是，我們也體驗到了集中精力傾聽利害關係人的意見、向利害關係人學習並做出有意義的回應所帶來的好處。例如，在加州，我們在 2025 年至 2027 年一般水費案例中與公共倡導辦公室和當地水費倡導組織 WRATES 就大多數問題達成了原則協議。

We expect the settlement agreement will be filed on or about August the 19. All but two policy issues have been agreed upon, and we are hopeful the CPUC will approve the settlement later this year.

我們預計和解協議將於 8 月 19 日左右提交。除兩個政策問題外，所有政策問題都已達成一致，我們希望 CPUC 將在今年稍後批准解決方案。

In Connecticut, we worked within the constraints of a formidable regulatory environment to complete our general rate case. Now we didn't get all we expected, or frankly, all that we need from that particular rate case. And there is a lot of room for improvement going forward, which we are already thinking about. But it was clearly a step in the right direction.

在康乃狄克州，我們在強大的監管環境的限制下完成了我們的整體費率案例。現在，我們沒有從特定的利率案例中得到我們所期望的一切，或者坦白說，我們需要的一切。未來還有很大的進步空間，我們已經在考慮了。但這顯然是朝著正確方向邁出的一步。

Our team's responsive filing and constructive engagement with local stakeholders helped facilitate significant improvements between the proposed draft decision and the final decision. I'm proud to share that the Connecticut team's strategic approach, hard work, and transparency, was commended by the local regulators, parties to the rate case, and members of the financial industry alike.

我們團隊的積極回應和與當地利益相關者的建設性接觸有助於促進提議的決定草案和最終決定之間的重大改進。我很自豪地與大家分享，康乃狄克州團隊的策略方針、辛勤工作和透明度得到了當地監管機構、利率案件各方以及金融業成員的讚揚。

And we were able to serve our customers by securing additional financial assistance funds in California and expanding eligibility in Connecticut for our water rate assistance program, which is a first-of-its-kind program in that state for water utilities.

我們能夠透過在加州獲得額外的財務援助資金並擴大康乃狄克州水費援助計畫的資格來為客戶提供服務，這是該州首個針對水務公司的此類計畫。

Additionally, across the enterprise, we invested $158 million in water and wastewater utility infrastructure, which constitutes approximately 48% of our $332 million 2024 capital expenditure plan. And we also delivered earnings per diluted share of $0.64 and adjusted non-GAAP earnings per diluted share of $0.66 in the second quarter.

此外，在整個企業範圍內，我們在供水和污水處理基礎設施方面投資了 1.58 億美元，約占我們 2024 年 3.32 億美元資本支出計畫的 48%。第二季度我們還實現了 0.64 美元的稀釋每股收益和 0.66 美元的調整後非 GAAP 稀釋每股收益。

Now you hear me say every quarter that our people make the difference at SJW Group. This is truer than ever before, and we saw that difference from California to Connecticut this quarter. And as we prepare for the future, we know that constructive relationships with our local stakeholders built on mutual trust and respect will be critical.

現在，您每季都會聽到我說，我們的員工在 SJW 集團中發揮著重要作用。這比以往任何時候都更加真實，本季我們看到了從加州到康乃狄克州的差異。當我們為未來做準備時，我們知道與當地利害關係人建立在相互信任和尊重基礎上的建設性關係至關重要。

Our industry has some significant challenges ahead: PFAS remediation, new lead and copper standards, and the replacement of aging infrastructure, just to name a few. And we all know this work needs to get done. There's no question about that.

我們的產業面臨一些重大挑戰：PFAS 修復、新的鉛和銅標準以及老化基礎設施的更換等等。我們都知道這項工作需要完成。毫無疑問。

But how we get it done most effectively for our customers and their communities, well, that's the question we need to tackle with our regulators and legislators. And our local teams are ready and committed to investing in these relationships to ensure that we can achieve our shared mission of providing our local community members with reliable, high-quality water and service.

但是，我們如何才能最有效地為我們的客戶及其社區做到這一點，這就是我們需要與監管機構和立法者一起解決的問題。我們的當地團隊已準備好並致力於投資這些關係，以確保我們能夠實現為當地社區成員提供可靠、優質的水和服務的共同使命。

Sometimes, it's easy to align with local stakeholders on the approach to achieving our common goals, and other times it's a slower process. But we are dedicated to investing the time, effort, and resources needed to advocate and collaborate in service of our customers, their communities, and their communities. our employees, and shareholders. That's our culture, and it's also a competitive advantage of ours.

有時，在實現我們共同目標的方法上與當地利害關係人保持一致很容易，而有時這是一個較慢的過程。但我們致力於投入所需的時間、精力和資源來倡導和協作，為我們的客戶、他們的社區和他們的社區提供服務。我們的員工和股東。這是我們的文化，也是我們的競爭優勢。

With that, I will pass it over to Andrew to review our detailed financial results and regulatory updates in our state operations. Andrew?

這樣，我將把它交給安德魯，以審查我們詳細的財務表現和州業務的監管更新。安德魯？

Thank you, Eric. Last evening after the close, we released our second-quarter 2024 operating results. In the second quarter, we reported revenue of $176.2 million, a 12% increase over the $156.9 million reported the same quarter of 2023. The increase was largely driven by rate increases at each of our local operations that included one or more step increases in general rate cases, infrastructure recovery mechanisms, and customer growth.

謝謝你，埃里克。昨晚收盤後，我們發布了 2024 年第二季營運業績。第二季度，我們報告的營收為 1.762 億美元，比 2023 年同季度的 1.569 億美元成長 12%。這一增長主要是由我們每個本地業務的費率上漲推動的，其中包括一般費率案例、基礎設施恢復機制和客戶增長的一步或多步上漲。

Despite higher water production expenses, we were able to deliver net income for the quarter of $20.7 million, which was a 13% increase over the $18.3 million reported in the second quarter of 2023. Diluted earnings per share was $0.64 compared to $0.58 in 2023.

儘管水生產費用較高，我們本季仍實現了 2,070 萬美元的淨利潤，比 2023 年第二季報告的 1,830 萬美元成長了 13%。稀釋後每股收益為 0.64 美元，而 2023 年為 0.58 美元。

Second-quarter real estate transactions that netted $0.9 million pre-tax loss have been excluded in non-GAAP results reflected below with adjusted net income of $21.3 million and adjusted diluted earnings per share of $0.66.

第二季淨虧損 90 萬美元的房地產交易已被排除在非 GAAP 業績中，如下所示，調整後淨利潤為 2,130 萬美元，調整後稀釋每股收益為 0.66 美元。

As you can see, $0.34 of the revenue increase was driven primarily by rate increases in California and Maine and the infrastructure recovery mechanisms in Connecticut, Maine, and Texas. Changes in the allowance for uncollectible customer accounts contributed $0.13, and higher usage and growth added $0.12 cents.

正如您所看到的，0.34 美元的收入成長主要是由加州和緬因州的費率上漲以及康乃狄克州、緬因州和德州的基礎設施恢復機制所推動的。壞帳客戶帳戶備抵的變化貢獻了 0.13 美元，而較高的使用量和成長則貢獻了 0.12 美分。

The revenue increase was offset by higher water production costs of $0.22 and a $0.09 tax reserve release in the same period last year. $13 million of revenue increase was from rate and infrastructure adjustments, and $6 million was attributable to higher usage and regulatory mechanisms.

收入成長被去年同期 0.22 美元的水生產成本增加和 0.09 美元的稅收儲備釋放所抵消。 1300 萬美元的收入成長來自費率和基礎設施的調整，600 萬美元的收入成長歸因於更高的使用率和監管機制。

Water production expense in the quarter increased 14% compared to 2023. The increase was principally driven by rate increases from our water wholesaler in California, higher customer usage, and growth. Total other operating expenses increased 2% year over year and was primarily driven by increases in depreciation and higher administration and general cost, which were partially offset by allowances for uncollectible customer accounts.

與 2023 年相比，本季的水生產費用增加了 14%。這一增長主要是由於我們位於加利福尼亞州的水批發商的費率上漲、客戶使用量的增加以及增長所致。其他營運支出總額年增 2%，主要是由於折舊增加以及管理和一般成本增加，但部分被無法收回的客戶帳戶備抵所抵消。

Year to date, we reported revenue of $325.6 million, an 11% increase over the $294.2 million reported in the same period of 2023. As we noted for the quarter, the increases were largely driven by rate increases, infrastructure recovery mechanisms, and customer growth. Despite higher water production expenses, net income year to date was $32.4 million, a 9% increase. And diluted earnings per share was $1 compared to $0.95 in 2023.

今年迄今為止，我們的營收為 3.256 億美元，比 2023 年同期的 2.942 億美元成長了 11%。正如我們在本季所指出的，成長主要是由費率上漲、基礎設施恢復機制和客戶成長所推動的。儘管水生產費用增加，今年迄今的淨利潤仍達到 3,240 萬美元，成長了 9%。稀釋後每股收益為 1 美元，而 2023 年為 0.95 美元。

As mentioned earlier, second-quarter real estate transactions that netted $0.9 million pre-tax loss have been excluded in non-GAAP results reflected below with adjusted net income of $33 million. Non-GAAP diluted earnings per share was $1.02 compared to $0.92, an 11% increase over 2023.

如前所述，第二季淨虧損 90 萬美元的房地產交易已被排除在非 GAAP 業績中，如下所示，調整後淨利潤為 3,300 萬美元。非公認會計原則稀釋後每股收益為 1.02 美元，較 2023 年的 0.92 美元增加 11%。

As you can see, $0.60 of the revenue increase was driven primarily by rate increases in California and Maine. Higher usage and customer growth contributed $0.19. The revenue increase was partially offset by higher water production cost of $0.35.

如您所見，收入成長的 0.60 美元主要是由加州和緬因州的費率上漲所推動的。更高的使用率和客戶成長貢獻了 0.19 美元。收入成長被 0.35 美元的水生產成本增加部分抵消。

Approximately $33 million in gross equity proceeds was raised year to date through the at-the-market program. At the end of the second quarter, we had $217 million drawn on our $350 million bank line of credit, which left $133 million available for short-term financing of utility plan additions and operating activities.

今年迄今為止，透過市場計劃籌集了約 3,300 萬美元的總股本收益。第二季末，我們從 3.5 億美元的銀行信貸額度中提取了 2.17 億美元，其中 1.33 億美元可用於公用事業計劃新增和營運活動的短期融資。

During the balance of 2024, we plan to raise approximately $160 million in long-term debt to pay down our line of credit. The average borrowing rate for our line of credit advances during the quarter was approximately 6.53%. The average borrowing rate in the same period of 2023 was approximately 5.96%. The effective consolidated income tax rates for second quarter of 2024 and 2023 were approximately 15% and negative 9%, respectively.

在 2024 年剩餘時間裡，我們計劃籌集約 1.6 億美元的長期債務來償還我們的信貸額度。本季我們的信用預付款的平均借款利率約為 6.53%。2023年同期平均借款利率約為5.96%。2024 年第二季和 2023 年第二季的有效綜合所得稅率分別約為 15% 和負 9%。

Turning to California, we are pleased to report that San Jose Water has reached an agreement in principle to settle its 2025 through 2027 general rate case with the Public Advocates Office and Water Rate Advocates for Transparency, Equity, and Sustainability or WRATES. Only two policy issues remain, which we expect will be litigated later this year.

談到加州，我們很高興地報告，聖荷西水務公司已與公共倡議辦公室和透明、公平和可持續水費倡導者組織 (WRATES) 原則上達成協議，解決其 2025 年至 2027 年一般費率案件。現在只剩下兩個政策問題，我們預計將在今年稍後提起訴訟。

As required in the procedural ruling, the formal settlement motion and agreement must be submitted to the California Public Utilities Commission no later than August 19, 2024. Till then, we cannot disclose any additional information.

根據程序裁決的要求，正式和解動議和協議必須在 2024 年 8 月 19 日之前提交給加州公用事業委員會。在此之前，我們無法透露任何其他資訊。

However, as a reminder, the application we filed with the CPUC in January requested a $103 million revenue increase over three years and proposed a three-year $540 million capital expenditure program that would address several key needs, including treating PFAS to meet drinking water standards finalized by the US EPA earlier this year, reducing greenhouse gas emissions through solar generation, energy storage systems to replace diesel generators, fleet electrification, and advanced acoustic leak detection, as well as advancing the CPUC's. Environmental and Social Justice Action Plan to improve access to high-quality water service, climate resiliency, and economic and workforce development.

然而，提醒一下，我們一月份向CPUC 提交的申請要求在三年內增加1.03 億美元的收入，並提出一項為期三年5.4 億美元的資本支出計劃，該計劃將滿足幾個關鍵需求，包括處理PFAS 以滿足飲用水標準美國環保署在今年稍早最終確定了這一目標，透過太陽能發電、替代柴油發電機的儲能係統、車隊電氣化和先進的聲學洩漏檢測以及改進CPUC 來減少溫室氣體排放。環境和社會正義行動計劃，旨在改善獲得高品質供水服務、氣候適應力以及經濟和勞動力發展的機會。

A CPUC decision can come as early as the fourth quarter of 2024, and we expect it to be effective on January 1, 2025. In May, San Jose Water requested a rate base increase of approximately $4.8 million and an annualized revenue increase of $768,000 for investments made to date in our advanced metering infrastructure project.

CPUC 的決定最早可能會在 2024 年第四季做出，我們預計該決定將於 2025 年 1 月 1 日生效。5 月，聖荷西水務公司要求將我們先進計量基礎設施項目迄今為止的投資增加約 480 萬美元的費率基數，並將年化收入增加 768,000 美元。

As you may recall, we are planning to invest approximately $27 million in this project in 2024. It is a $100 million project that is separate from the general rate case capital budget. And the majority of the insulation is expected between 2024 and 2026.

您可能還記得，我們​​計劃在 2024 年為該專案投資約 2,700 萬美元。這是一個 1 億美元的項目，獨立於一般費率案例資本預算。預計大部分絕緣工程將於 2024 年至 2026 年間完成。

Turning to Connecticut, on June 28, we received a final decision in Connecticut Water's general rate case. As Eric shared earlier, this case demonstrated the value of meaningfully engaging with our local stakeholders and approaching the filing and hearings with transparency, responsiveness, and a desire for constructive collaboration.

談到康乃狄克州，6 月 28 日，我們收到了康乃狄克州自來水公司一般費率案件的最終決定。正如艾瑞克早些時候分享的那樣，這個案例證明了與當地利益相關者進行有意義的接觸，並以透明度、響應能力和建設性合作的願望來處理備案和聽證會的價值。

We believe our approach resulted in significant improvements between the preliminary and final decisions issued by the Public Utility Regulatory Authority. The final decision was effective as of July 1, 2024, and provides for an annualized increase of $6.5 million in revenue. It authorized a return on equity of 9.3%, which is up from 9% in our prior case and up from 9.2% in the draft decision. Our capital structure remains near the level authorized in our last case of 53% and our equity at 47% debt.

我們相信我們的方法使公用事業監管機構發布的初步決定和最終決定之間有了顯著的改進。最終決定自 2024 年 7 月 1 日起生效，並規定年收入增加 650 萬美元。它授權的股本回報率為 9.3%，高於我們先前案例中的 9%，也高於決定草案中的 9.2%。我們的資本結構仍然接近我們上次案例中授權的 53% 水平，我們的股本結構為 47% 債務。

The decision gave us mixed expense recovery. We saw approximately $3.9 million in unrecovered expenses. However, for the first time, our company had the opportunity to earn additional revenues of $1.1 million in executive compensation for meeting performance metrics set by PURA.

這項決定為我們帶來了混合費用回收。我們發現大約 390 萬美元的未收回費用。然而，我們公司第一次有機會獲得 110 萬美元的額外收入，以達到 PURA 設定的績效指標的高階主管薪酬。

As part of the general rate case process, our WICA surcharge, which is an infrastructure recovery mechanism used primarily for the replacement of pipe, was reset to zero. We had requested $21.4 million or an 18.1% increase in annual revenue. The final decision granted us approximately 38% of our asks when the opportunity to earn the additional $1.1 million is included and the $1.7 million in depreciation is excluded.

作為一般費率案例流程的一部分，我們的 WICA 附加費（一種主要用於更換管道的基礎設施恢復機制）被重置為零。我們要求年收入增加 2,140 萬美元，即 18.1%。當包括賺取額外 110 萬美元的機會且不包括 170 萬美元的折舊時，最終決定滿足了我們約 38% 的要求。

It is important to note that none of our infrastructure investment was disallowed, though some projects were excluded because of timing. We expect to recover these investments in future rate cases.

值得注意的是，我們的基礎設施投資沒有一項被禁止，儘管一些項目因時間因素被排除在外。我們預計在未來的利率情況下收回這些投資。

To build on what Eric said earlier, we need more from this final decision, and we are going to continue to need more going forward to address several of the pressing water quality and infrastructure issues facing Connecticut.

為了以埃里克之前所說的為基礎，我們需要從這一最終決定中獲得更多信息，並且我們將繼續需要更多信息來解決康涅狄格州面臨的幾個緊迫的水質和基礎設施問題。

In approaching our most recent rate case, we went to school on the cases that came before us, and we learned a lot through the process and from our own rate case. We're going to use all of this experience and insight along with continued engagement with regulators and legislators to figure out a way we can move forward together to recover major upcoming expenditures, such as PFAS treatment and the replacement of aging above-ground infrastructure.

在處理我們最近的費率案例時，我們學習了先前的案例，透過這個過程並從我們自己的費率案例中學到了很多東西。我們將利用所有這些經驗和洞察力，以及與監管機構和立法者的持續接觸，找到一種共同前進的方法，以收回即將到來的主要支出，例如 PFAS 處理和更換老化的地上基礎設施。

We hear from customers that they would prefer a smooth and gradual approach to rate increases driven by essential infrastructure investments. And we would like to work collaboratively with local decision makers to identify the right mechanisms to avoid abrupt and significant rate hikes.

我們從客戶那裡得知，他們更喜歡在必要的基礎設施投資驅動下採取平穩、漸進的方式來提高費率。我們希望與當地決策者合作，確定正確的機制，以避免突然大幅升息。

However, we acknowledge that a part of the equation is on us to communicate effectively with customers on the need for these investments and the benefits they will provide. We will also continue to find and create opportunities to sustainably reduce operating costs and pass through to customers, such as our company-owned solar generation initiatives that reduce purchase electricity costs or our shared vendor procurement program that leverages our national scale.

然而，我們承認，我們需要與客戶有效溝通這些投資的需求及其將提供的好處。我們也將繼續尋找和創造機會來持續降低營運成本並傳遞給客戶，例如我們公司擁有的太陽能發電計劃，可降低購買電力成本，或我們的共享供應商採購計劃，可利用我們的全國規模。

It will be a combination of all of these efforts that will help us effectively tackle the challenges lying ahead for our industry. On June 24, Maine Water filed with the Maine Public Utilities Commission for a water infrastructure charge increase in two of its divisions. In Texas, the US Drought Monitor classifies our service area as being in severe to extreme drought, and conservation measures are in place as a result of the weather.

所有這些努力的結合將幫助我們有效應對產業面臨的挑戰。6 月 24 日，緬因州水務公司向緬因州公共事業委員會提出申請，要求提高其兩個部門的水基礎設施費用。在德州，美國乾旱監測機構將我們的服務區域歸類為嚴重至極端乾旱，並根據天氣情況採取了保護措施。

Because of this, we expect lower water usage in 2024 compared to 2023. However, we are not changing our earnings guidance range due to the situation in Texas, but we are continuing to monitor the drought and its potential impact on guidance.

因此，我們預計 2024 年的用水量將低於 2023 年。然而，我們不會因德克薩斯州的情況而改變我們的盈利指導範圍，但我們將繼續監測乾旱及其對指導的潛在影響。

The KT Water Resources acquisition we made last August will add approximately 6,000-acre feet of water to our existing water supplies, but it will take time to bring the additional supply online. Additionally, the Public Utility Commission of Texas has approved our request to acquire the 3009 water system, which serves approximately 270 customers. We expect to close later this year.

我們去年 8 月收購的 KT Water Resources 將為我們現有的供水系統增加約 6,000 英畝英尺的水量，但將額外的供水系統投入運作需要時間。此外，德州公用事業委員會還批准了我們收購 3009 供水系統的請求，該系統為約 270 個客戶提供服務。我們預計將在今年稍後關閉。

Our guidance for 2024: $2.66 to $2.76 per diluted share and $2.68 to $2.78 per diluted share on a non-GAAP basis; equity issuance of $55 million to $65 million, excluding acquisition growth to support a strong capital investment program. We maintain our five-year capital investment outlook of $1.6 billion, which includes approximately $230 million in investment in PFAS remediation based on finalized maximum contaminant levels.

我們對 2024 年的指引：以非公認會計準則計算，稀釋後每股盈餘為 2.66 至 2.76 美元，稀釋後每股盈餘為 2.68 至 2.78 美元；股票發行額為 5,500 萬至 6,500 萬美元，不包括支持強大資本投資計畫的收購成長。我們維持 16 億美元的五年資本投資前景，其中包括基於最終確定的最高污染物水準的 PFAS 修復投資約 2.3 億美元。

The factors underlying our 2024 guidance include the return on equity increase in California, which went from 9.31% to 9.81%, net of the 20-basis-point reduction for reimplementation of the WCMA, was effective January 1, 2024. The impact of the completed Biddeford-Saco rate case with a 9.5% ROE and 51% equity and 49% debt capital structure was effective January 1, 2024, as well.

我們 2024 年指導的因素包括加州的股本回報率增長，扣除 2024 年 1 月 1 日生效的重新實施 WCMA 導致的 20 個基點減少後，股本回報率從 9.31% 上升至 9.81%。已完成的 Biddeford-Saco 利率案例（ROE 為 9.5%、股本結構為 51%、債務資本結構為 49%）的影響也於 2024 年 1 月 1 日生效。

Finally, constructive regulatory decisions on current and prospective regulatory filings with Connecticut now behind us that leaves us with California, as well as strategic reinvestments in the business in 2024. Our 2024 guidance is independent of real estate sales or M&A activities. Further, we reaffirm our stated long-term growth rate of 5% to 7% that is anchored off of our 2022 diluted earnings per share of $2.43, which is non-linear because of rate case cycles.

最後，針對康乃狄克州當前和未來監管文件的建設性監管決策現已成為過去，我們只剩下加州，以及 2024 年對該業務的策略再投資。我們的 2024 年指導獨立於房地產銷售或併購活動。此外，我們重申我們所宣稱的 5% 至 7% 的長期增長率，這是基於我們 2022 年攤薄後每股收益 2.43 美元，由於利率情況週期，這是非線性的。

With that, I will turn the call over to Eric.

這樣，我會將電話轉給艾瑞克。

Thank you, Andrew. One of the ways we measure our impact and success as a company is how have we been a force for good. One area where we have achieved exciting outcomes is in expanding access and financial support for our customers.

謝謝你，安德魯。作為一家公司，我們衡量影響力和成功的方法之一就是我們如何成為一股行善的力量。我們令人興奮成果的領域之一是擴大對客戶的訪問和財務支持。

Over the past two years, San Jose water has secured $15.3 million in arrearage relief for its customers from the California Water and Wastewater Arrearage Payment Program. The most recent installment of $9.1 million was received this past May and will help support customers who experienced financial hardship due to COVID.

過去兩年，聖荷西水務公司已透過加州供水和廢水欠費支付計畫為其客戶獲得了 1,530 萬美元的欠費減免。最近一筆 910 萬美元的款項於今年 5 月收到，將有助於支持因新冠肺炎而遭受財務困難的客戶。

At Connecticut Water, PURA approved our request to expand income eligibility for the Water Rate Assistance Program or WRAP, a first-of-its-kind program in the state that offers water bill discounts for income-eligible customers. The company looks forward to expanding the program to more customers and providing deeper discounts to those customers who need it most.

在康乃狄克州水務公司，PURA 批准了我們擴大水費援助計劃 (WRAP) 收入資格的請求，這是該州首個此類計劃，為符合收入資格的客戶提供水費折扣。該公司期待將該計劃擴展到更多客戶，並為最需要的客戶提供更大的折扣。

Just a little history on WRAP, we first introduced the program in Connecticut in our last general rate case based on the good work San Jose Water was doing in California, assisting customers in need. As you can see, it has since expanded and evolved at Connecticut Water to support more customers more meaningfully.

簡單介紹一下 WRAP 的歷史，我們在上一個一般費率案例中首先在康涅狄格州引入了該計劃，這是基於聖何塞水務公司在加利福尼亞州為有需要的客戶所做的出色工作。正如您所看到的，康乃狄克水務公司自此不斷擴展和發展，以更有意義地支持更多客戶。

Importantly, it has also inspired similar programs by regional peers, amplifying the impact of our force-for-good initiatives beyond our own service areas. Over the last several years, we've built a strong national platform to support our growing local operations through the good times and the inevitable headwinds.

重要的是，它也激發了區域同行的類似計劃，擴大了我們的力行善舉措在我們自己的服務領域之外的影響。在過去的幾年裡，我們建立了一個強大的全國性平台，以支持我們不斷成長的本地業務，度過美好時光和不可避免的逆風。

And with a lot of effort and intention, we have maintained our fundamental values and culture through this growth. And that culture continues to guide us and distinguish us as we make business decisions that build trust with stakeholders.

經過大量的努力和意圖，我們在這成長過程中保持了我們的基本價值和文化。當我們做出與利害關係人建立信任的商業決策時，這種文化繼續指導我們並使我們與眾不同。

I continue to be inspired by the contributions of our talented teams across our local operations as they consistently provide an essential service with integrity, reliability, genuine care, and transparency. I'm confident our team's commitment to serving customers, communities, and the environment will continue to excel SJW Group's ability to deliver value to our stakeholders and reinforce our strong position for a successful future.

我繼續受到我們本地業務中才華橫溢的團隊所做貢獻的啟發，因為他們始終如一地提供誠信、可靠、真誠關懷和透明的基本服務。我相信，我們團隊對服務客戶、社區和環境的承諾將繼續超越 SJW 集團為利害關係人提供價值的能力，並鞏固我們在成功未來的強勢地位。

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

這樣，我會將電話轉回給接線生。

(Operator Instructions) Richard Sunderland, JPMorgan.

（操作員指令）Richard Sunderland，摩根大通。

Hi, good morning. Can you hear me?

嗨，早安。你聽得到我嗎？

Yes, we can, Richard. Thank you.

是的，我們可以，理查德。謝謝。

Great. Thank you very much for the time. I wanted to touch maybe first on the Texas drought. I know you mentioned the drought risk a little bit, but could you quantify some of that risk both to 2024 guidance overall on an EPS basis, as well as just what the year-to-date impacts you've seen and results are as well?

偉大的。非常感謝您抽出時間。我想先談談德州的乾旱。我知道您提到了一點乾旱風險，但您能否以 EPS 為基礎量化 2024 年總體指導的一些風險，以及您今年迄今為止所看到的影響和結果？

It's a great question, Rich. I think they have just gone to the next stage of drought. And at this stage, I don't have an exact quantification of where that's going to be until we see where the usage settles out at. I would say that under the base case scenario, we have taken this into account. And it's just if it becomes more biting than what we expect as a base case scenario that we will have to come revisit that at that point.

這是一個很好的問題，里奇。我認為他們剛剛進入乾旱的下一階段。在現階段，在我們看到使用情況穩定在哪裡之前，我無法準確量化其將在哪裡。我想說，在基本情況下，我們已經考慮到了這一點。只是如果它變得比我們預期的基本案例場景更尖銳，我們就必須在那時重新審視它。

Okay, understood. Very clear. And then turning to Connecticut, how does the Connecticut order compare to your long-term plan assumptions embedded in the 5% to 7% EPS growth rate?

好的，明白了。非常清楚。然後轉向康乃狄克州，康乃狄克州訂單與您嵌入 5% 至 7% 每股盈餘成長率的長期計畫假設相比如何？

That's an excellent question. Look, it is not -- it's definitely not additive to the growth rates that we have, but it is well within the range of where we expected at this point or could expect on a potential range of outcomes. So it is -- while it might itself be dilutive, we are seeing other parts of the business that are overcoming any of the issues with that as it stands today.

這是一個很好的問題。看，事實並非如此——它絕對不會增加我們的成長率，但它完全在我們目前預期或可能預期的潛在結果範圍內。事實就是如此——雖然它本身可能會被稀釋，但我們看到業務的其他部分正在克服目前存在的任何問題。

Got it. Understood. And then one final one on Connecticut. I know you had a lot of commentary around engagement in the process, but also balance that against the reality of the outcome and the order itself. Thinking about the state at a high level and given all the public attention on Aquarion, does the rate case outcome impact any thinking or interest around that asset?

知道了。明白了。最後一場是在康乃狄克州。我知道您對流程的參與有很多評論，但也將其與結果和訂單本身的現實進行平衡。從較高的層面考慮國家狀況並考慮到公眾對 Aquarion 的關注，利率案件的結果是否會影響圍繞該資產的任何想法或興趣？

I think that stands on its own, but of course, the regulatory climate, Richard, is a key factor of that. Certainly, as I mentioned, a good step forward here. I was also heartened with some of the regulatory decisions just announced for Eversource and United Illuminating involving their EV charging deployment work.

我認為這是獨立的，但當然，監管環境，理查德，是其中的關鍵因素。當然，正如我所提到的，這是向前邁出的一大步。我還對 Eversource 和 United Illuminating 剛剛宣布的涉及電動車充電部署工作的一些監管決定感到振奮。

There were some proposed decisions announced, which is just encouraging to see that getting back on track. And so we are optimistic, and we will continue to lean in and educate and build trust with regulators. And I might also mention, this morning there was an announcement. Governor Lamont announced that a new Commissioner was going to be appointed in January.

宣布了一些擬議的決定，看到一切回到正軌真是令人鼓舞。因此，我們很樂觀，我們將繼續向監管機構傾斜、教育和建立信任。我還可能提到，今天早上有一個公告。拉蒙特州長宣布將於一月任命一位新專員。

His name is David Arconti. He is a former state representative, and he is currently the Vice President of Government Affairs for United Illuminating. Governor Lamont also announced the retirement in January of Jack Betkoski. And Jack has served for 27 years at PURA.

他的名字叫大衛‧阿孔蒂。他是前州代表，現任聯合照明政府事務副總裁。州長拉蒙特還在一月宣布傑克貝特科斯基退休。Jack 在 PURA 工作了 27 年。

So some very recent regulatory developments there, and we would like to think that former State Rep. Arconti's service at United Illuminating would also provide some additional perspectives that could be valuable down the road as he serves as a Regulator in Connecticut.

因此，最近在那裡的一些監管進展，我們認為前州眾議員阿孔蒂在聯合照明公司的服務也將提供一些額外的觀點，這些觀點在他擔任康乃狄克州的監管者時可能很有價值。

Got it. Very helpful overall. Thank you for the time today.

知道了。整體來說非常有幫助。謝謝你今天的時間。

Thank you, Richard. Appreciate it.

謝謝你，理查。欣賞它。

Michael Gaugler, Janney.

麥可高格勒，珍妮.

Hello, everyone. Congrats on the quarter.

大家好。恭喜本季。

Hey, thank you, Michael.

嘿，謝謝你，麥可。

I'd like to start on the Connecticut operations. With you coming just out of the rate case, do you expect the rate case cycle to condense going forward, given the outcome?

我想從康乃狄克州的業務開始。當您剛結束利率案例時，考慮到結果，您是否預期利率案例週期會繼續壓縮？

Look, I think, Michael, that's definitely a potential mechanism that we will utilize as we think about this. And what we will do is we'll continue to monitor where we stand from a recovery standpoint and make the best decisions to go in when that fits with where we're seeing our recovery at.

邁克爾，我想，這絕對是我們在考慮這個問題時會利用的潛在機制。我們要做的是，我們將繼續從復甦的角度監控我們的處境，並在符合我們所看到的復甦情況時做出最佳決定。

The other thing to keep in mind that we've talked about in the past is we do want to also continue to distribute our rate cases so that we don't have any crowding of rate cases where California is going in at the same time as Connecticut, so we have our larger divisions going in at different times. So that will be a second factor, but you can absolutely expect that we will be paying attention to the timing of our next rate case.

另一件要記住的事情是，我們過去談到過，我們確實希望繼續分發我們的費率案件，這樣我們就不會在加利福尼亞州同時進入的情況下出現任何擁擠的費率案件。 ，所以我們在不同的時間有更大的部門。因此，這將是第二個因素，但您絕對可以預期我們將關注下一次利率案例的時間。

Okay. And then over in the California rate case, given the settlement agreement, just wondering how confident are you that you could get a decision by year end.

好的。然後在加州利率案件中，鑑於和解協議，只是想知道您對年底前做出決定有多大信心。

Yes, Mike. I'd be highly confident that we can. We achieved an all-party settlement, which makes that all the more likely. And the remaining items are two small policy matters that were just brief, and the Commission can then decide. So I think all parties are highly confident in this case that we'll be approved and ready to introduce new rates on January 1, 2025.

是的，麥克。我非常有信心我們能做到。我們達成了各方和解，這使得這種情況更有可能發生。剩下的項目是兩個簡短的小政策問題，然後委員會就可以做出決定。因此，我認為各方對此都非常有信心，我們將在 2025 年 1 月 1 日獲得批准並準備好引入新費率。

Great. Then just one more on Texas. You mentioned the drought, and Richard had some questions on it as well. Just wondering what your supplies through the remainder of the year look like.

偉大的。然後又是一篇關於德州的文章。你提到了乾旱，理查德也對此提出了一些問題。只是想知道今年剩餘時間你們的供應情況如何。

Canyon Lake is our -- is a significant portion of our source of supply, and that lake is down to 55% of its normal capacity or full capacity, I should say. And so that's a pretty significant variance from what you would normally expect to see in the summer.

峽谷湖是我們供應源的重要組成部分，我應該說，該湖的容量已降至正常容量或滿容量的 55%。因此，這與您通常期望在夏天看到的情況有很大差異。

We also have significant groundwater supplies that we use. But because of the condition of the lake, we introduced the Stage 4 drought declaration. And what that requires is customers cannot -- in certain counties cannot use water for irrigation. So that's a pretty significant request of our customers.

我們也擁有大量使用的地下水資源。但由於湖泊的狀況，我們推出了第四階段乾旱聲明。而這需要的是客戶不能──在某些縣不能使用水來灌溉。所以這是我們客戶的一個非常重要的要求。

But at the same time, I would put it in perspective, Texas is 5% of our overall business, and our team there will work very hard to offset the earnings implications for that particular business. So as Andrew said, with our guidance affirmation today, we still feel like we're on track there, but we'll watch it very carefully.

但同時，我認為，德州占我們整體業務的 5%，我們在那裡的團隊將非常努力地工作，以抵消對該特定業務的獲利影響。因此，正如安德魯所說，透過我們今天的指導確認，我們仍然感覺我們正走在正軌上，但我們會非常仔細地觀察。

Yes. And the one thing too to add to what Eric just talked about, coming into this quarter, we were already down to one watering day every two weeks for our major areas. And so on one hand, you can say that it's not that big of a move. But when you have no watering, there's no forgetting which day you're supposed to water in this case. And so I think that's going to be the part that we'll have to take a look at as what the ultimate impact is.

是的。艾瑞克剛才談到的還有一件事要補充，進入本季度，我們的主要區域已經減少到每兩週澆水一次。因此，一方面，你可以說這並不是什麼大的舉動。但是，當您沒有澆水時，就不會忘記在這種情況下應該在哪一天澆水。所以我認為這將是我們必須考慮的最終影響是什麼的部分。

All right. Thank you, gentlemen.

好的。謝謝你們，先生們。

Thank you.

謝謝。

Thank you, Michael.

謝謝你，麥可。

Jonathan Reeder, Wells Fargo Securities.

喬納森·里德，富國銀行證券公司。

Hi, Eric and Andrew. How are you guys doing?

嗨，埃里克和安德魯。你們好嗎？

Hey. Hi, Jonathan. Doing great. Thanks for calling in today.

嘿。嗨，喬納森。做得很好。感謝您今天打電話來。

Yes, thanks for taking the time. So first, I wanted to start on the A&G expenses. They decreased $3.1 million during the quarter. Was that expected when guidance was first initiated, or are there some timing issues or things that might reverse during the rest of 2024? For instance, did that receipt of the $9.1 million in arrearage release in California during May -- did that help drive that lower allowance for uncollectible accounts in the quarter?

是的，感謝您抽空。首先，我想從 A&G 費用開始。該季度減少了 310 萬美元。這是首次啟動指導時的預期嗎？例如，加州 5 月收到的 910 萬美元欠款釋放的收據是否有助於推動本季壞帳準備金的降低？

Yes, so Jonathan, it did. And the more important part is the ability. When we applied for that program, we were not in a position at that point to start shutting off customers that were part of that program because that was a condition. So given the ability for us to start shutting off customers who are not paying their bills, that drives the release as well.

是的，喬納森，確實如此。而更重要的是能力。當我們申請該計劃時，我們當時無法開始關閉屬於該計劃的客戶，因為這是一個條件。因此，鑑於我們有能力開始關閉那些不支付帳單的客戶，這也推動了該版本的發布。

And the other component to keep in mind, while we knew that we were going to get this during the year at some point, what we didn't have guarantees amounts or the total amount that was going to happen. We had an expectation. And the other piece is we certainly didn't know the timing, so which quarter it would come in.

還有另一個要記住的部分，雖然我們知道我們會在一年中的某個時候得到這個，但我們沒有保證金額或將要發生的總金額。我們有一個期望。另一件事是我們當然不知道時間，所以它會在哪個季度出現。

So yes, it was part of our standard operations, and it's why it's not highlighted differently. But it is something that we will continue to watch because we do have an expectation that our customers will pick up their payments to us, and we have seen that already on people that were not part of the program that we started doing shuts on. We saw a very positive response to those folks paying their bills, and now it's for these remaining items.

所以，是的，這是我們標準操作的一部分，這就是為什麼它沒有以不同方式突出顯示。但這是我們將繼續關注的事情，因為我們確實期望我們的客戶會收到向我們支付的款項，而且我們已經看到，那些不屬於我們開始實施的計劃的人已經被關閉了。我們看到人們對支付帳單的反應非常積極，現在是針對這些剩餘的項目。

The other thing I will just highlight is with the arrearage program, it cleared out any balances of people that were prior to 2022, so the balances are, generally speaking, fairly fresh at 2023/into this year.

我要強調的另一件事是拖欠計劃，它清除了 2022 年之前的所有餘額，因此一般來說，2023 年/今年的餘額相當新鮮。

Okay. And then I guess, can you also remind us whether Q3 '23 or Q4 '23, if the results included any significant benefits that won't be occurring, I guess, in the second half of 2024? It just seems that otherwise, I guess, Q2's favorable revenue drivers like the California rate increases and now the Connecticut rate case order would have the full-year '24 results trending at or above the high end of the guidance range.

好的。然後我想，您能否提醒我們，無論是 23 年第三季還是 23 年第四季度，如果結果包含任何我想在 2024 年下半年不會出現的重大效益？看來，否則，我猜，第二季有利的收入驅動因素，如加州利率上漲，以及現在康乃狄克州利率案件命令，將使 24 年全年結果趨於或高於指導範圍的高端。

Obviously, there's Texas to keep in mind. But I guess if you just say it a little differently, if the second-half '24 EPS are just flat compared to second half of '23, it puts you just above the midpoint of your guidance range.

顯然，要記住德克薩斯州。但我想，如果你說得有點不同，如果 24 年下半年的每股盈餘與 23 年下半年相比持平，那麼它就略高於你的指導範圍的中點。

Right. So I think it's a very fair way to look at it. As I think about the items that were there that I remember off the top of my head, most of the one-time items that would have impacted the real estate happened in the beginning of last year, in the first six months. And so that would not be a repeat.

正確的。所以我認為這是一種非常公平的看法。當我想起那些我腦海中浮現的項目時，大多數對房地產產生影響的一次性項目都發生在去年年初的前六個月。這樣就不會重複了。

Outside of that, I can't think of something that was a very unique item. There's always -- the one thing when I make comments like that, Jonathan, there are always pluses and minuses all over the place. And that's what we do. It's just managing all those pluses and minuses. But for something that significant, I don't have something off the top of my head.

除此之外，我想不出有什麼東西是非常獨特的。喬納森，當我發表這樣的評論時，總是會有一件事，到處都是優點和缺點。這就是我們所做的。它只是管理所有這些優點和缺點。但對於如此重要的事情，我沒有任何想法。

Okay. Yes. I mean, it just seems like -- I think it was Eric who made the point. Texas is only 5%. Obviously, there's the unknowns around the revenue impact there. But overall, it seems like based on the first half of the year, you're in a pretty strong position with regards to your guidance range and maybe being in the upper half or above prior to potentially some of those puts and takes.

好的。是的。我的意思是，看起來——我認為是埃里克提出了這個觀點。德克薩斯州僅為 5%。顯然，收入影響存在未知數。但總體而言，從今年上半年來看，您的指導範圍似乎處於相當有利的位置，並且可能在某些看跌期權和看跌期權之前處於上半部分或以上。

Yes. Let me just be clear that we're not seeing us being above the guidance range at this time. So I don't want you to feel that confident. But I do see that we've had a positive performance year to date. But there has been -- as we highlighted in the press release, there has been inflationary impacts that impacted the business.

是的。讓我澄清一下，目前我們沒有看到我們的價格高於指導範圍。所以我不希望你感到那麼自信。但我確實看到我們今年迄今為止取得了積極的表現。但正如我們在新聞稿中所強調的那樣，通貨膨脹的影響已經對業務產生了影響。

So you do have to keep that in mind when you're thinking about the impacts. So there are positives that we're seeing in there, but there are some negatives that we're having to manage through as well.

因此，當您考慮影響時，您必須牢記這一點。因此，我們看到了一些正面的一面，但也存在著一些我們必須克服的負面因素。

Sure. Okay. I'm kind of shifting gears a little bit. How do you think about the California Supreme Court's recent ruling on decoupling, and how does that impact the prospects of decoupling getting restored for water utilities by the CPUC?

當然。好的。我正在稍微改變一下態度。您如何看待加州最高法院最近關於脫鉤的裁決？

You know what, Jonathan? A great development. Really pleased the collaboration across the industry to go about getting the legislation that made clear to the California PUC that this was a very viable regulatory tool. And now further with the Supreme Court ruling on the prior cases for some of our peers, I think it all bodes well.

你知道嗎，喬納森？一個偉大的發展。非常高興整個產業的合作能夠推動立法，向加州公用事業委員會明確表明這是一個非常可行的監管工具。現在，隨著最高法院對我們一些同行之前的案件做出進一步裁決，我認為這一切都是好兆頭。

But the Public Advocate's Office has strong views in opposition to using decoupling. So there's still work to be done from that standpoint. And we're going to watch carefully our peers, see how they do in their cases. And then our next cycle around, we'll take a very hard look at it.

但公共倡議辦公室強烈反對使用脫鉤措施。因此，從這個角度來看，仍有工作要做。我們將仔細觀察我們的同行，看看他們在自己的情況下表現如何。然後我們的下一個週期，我們將仔細研究它。

I'm in favor of using them. And as you know, because we didn't think we had that option, we've worked very hard on the fixed-charge component and recovering more and more of our fixed costs through our service charge, which -- we've achieved that.

我贊成使用它們。如您所知，因為我們認為我們沒有這種選擇，所以我們在固定費用部分非常努力，並透過服務費收回越來越多的固定成本，我們已經實現了這一點。

But we do like the decoupling. We'll watch it carefully. And hopefully, we continue to track and trend towards the reintroduction of that tool. And again, just one final comment, of course. We have a form of decoupling in place with ourselves, with our WCMA that we're benefiting from currently.

但我們確實喜歡這種脫鉤。我們會仔細觀察。希望我們能夠繼續追蹤並趨勢重新引入該工具。當然，再次強調最後的評論。我們與自己建立了某種形式的脫鉤，目前我們正在從 WCMA 中受益。

Yes, you guys are already in a position of strength relative to some of the others in there. But last for me, can you provide the latest thoughts on the potential Aquarion opportunity, including the timing of when the sale process might be conducted as you understand it?

是的，相對於其他人來說，你們已經處於優勢地位。最後，您能否提供有關 Aquarion 潛在機會的最新想法，包括您所理解的銷售流程的時間表？

It's a difficult one, just because as you would guess, there's confidentiality agreements and the like for events such as that. But we're very excited about the potential opportunity there, Jonathan. We're very familiar with the assets, and we think it would be a great combination with our company. And we look forward to the process ahead here.

這是一件困難的事情，因為正如你所猜測的，對於此類事件有保密協議之類的。但我們對那裡的潛在機會感到非常興奮，喬納森。我們對這些資產非常熟悉，我們認為這將是與我們公司的完美結合。我們期待著接下來的進程。

Okay. Fair enough. Thanks so much for the time today.

好的。很公平。非常感謝今天的時間。

Thank you, Jonathan. All the best.

謝謝你，喬納森。一切順利。

Angie Storozynski, Seaport.

安吉·斯托羅辛斯基，海港。

Thank you. So I have somewhat of a weird question. I'm just bracing for rising electric prices, electricity prices overall. And I'm just wondering just two things. One, just talk to us about your recovery methodology for rising electricity capacity prices, you name it. Is there a way for you to either maybe lock in rates ahead of time or just try to mitigate that impact?

謝謝。所以我有一個有點奇怪的問題。我只是為電價上漲做好準備，整體電價上漲。我只是想知道兩件事。第一，請與我們談談您對不斷上漲的電價的恢復方法，凡是您能想到的。有沒有辦法讓您提前鎖定利率或只是嘗試減輕這種影響？

And then number two, mostly, how do you think in this rising electricity price environment, you as a water utility will be treated by regulators and potentially investors? Do you actually think that you will regain your competitive advantage given that water bill affordability will be probably meaningfully improved than that versus electric bills? So again, just this whole issue of likely rising electric bills that we are currently forgetting about.

其次，主要是，您認為在電價上漲的環境下，您作為水務公司將如何受到監管機構和潛在投資者的對待？鑑於水費負擔能力可能比電費負擔能力顯著提高，您是否真的認為您將重新獲得競爭優勢？再說一遍，我們目前忘記了電費可能上漲的整個問題。

Yes. Look, it's an excellent point to bring up, Angie. And it's something that we do not overlook on the impact on our customers. In California, we have a balancing account that allows us to put that through. So California is not something that -- where we would see an impact directly on us. But we do have impacts on our customers.

是的。聽著，這是一個很好的提出點，安吉。我們不會忽視這一點對客戶的影響。在加州，我們有一個平衡帳戶，可以幫助我們解決這個問題。因此，加州不會對我們產生直接影響。但我們確實對客戶產生了影響。

So we have been out there continuing to convert facilities over to solar, which fixes the charge for that electricity over a longer period of time and does also allow for the benefit of providing a greener source of electricity for the communities that it's based in.

因此，我們一直在繼續將設施轉換為太陽能，這可以在較長時間內固定電力費用，並且也可以為其所在社區提供更綠色的電力來源。

The second aspect, as we think about our Connecticut and Maine businesses, we tend to contract for that power. And so we buy the power in advance. We have seen an increase in those rates, to be clear, even for the contracted rates over where we were before. Because of last time when we purchased power, they were significantly lower than they are today.

第二個方面，當我們考慮康乃狄克州和緬因州的業務時，我們傾向於簽訂合約來獲得這種權力。所以我們提前購買電力。需要明確的是，我們已經看到這些費率有所增加，即使是合約費率也比我們之前的水平有所提高。因為上次我們買電的時候，價格比今天低很多。

That being said, those increases, at least some of them, have already reflected in the current rate case that we have seen with more to come. It's something that we will have to manage as we look at that.

話雖這麼說，這些增加，至少其中一些，已經反映在當前的利率情況中，我們已經看到了更多的增加。當我們考慮這個問題時，我們必須對此進行管理。

For your third item, though, of affordability, there is a tremendous value, from my perspective, in water relative to some of the other commodities that other utilities are responsible for delivering. And if we look at our affordability relative to the metrics that are out there and in overall bills, and just to remind you of that page that we have in the back of our Investor deck that highlights what our cost is to customers as an average bill relative to their median household income, we are below 1% in all of our jurisdictions, which is a very solid place to be.

不過，對於您的第三個項目，即負擔能力，從我的角度來看，相對於其他公用事業公司負責提供的其他一些商品，水俱有巨大的價值。如果我們看看我們相對於現有指標和整體帳單的承受能力，並提醒您我們在投資者平台後面的頁面，該頁面強調了我們對客戶的平均帳單成本相對於家庭收入中位數，我們所有轄區的收入均低於1%，這是一個非常穩定的水平。

The other thing that we are continuing to do, Angie, is we are not -- we are never done trying to save money for our customers. And we are continuing to come up with new ways and new programs in order to save money for our customers, with solar being a great example. We actually put that in, and it earns for our shareholders. But it reduces costs for our customers, and what an outstanding outcome for that.

安吉，我們正在繼續做的另一件事是，我們從未停止為客戶省錢的努力。我們正在繼續想出新的方法和新的計劃，以便為我們的客戶省錢，太陽能就是一個很好的例子。我們實際上把它投入了，它為我們的股東帶來了收益。但它降低了我們客戶的成本，這是多麼出色的成果。

Some really good points. I love the question. By the end of this year, we will be generating 6,200 megawatts of solar power for our companies. I was delighted when I saw our sustainability report in Texas. 100% of our electricity comes from renewables. And Connecticut is 70%, and then California and Maine is 50% and rising. So we've been tapping into that market as well and really trying to be a force for good there.

一些非常好的觀點。我喜歡這個問題。今年年底，我們將為我們的公司生產 6,200 兆瓦的太陽能。當我看到我們在德克薩斯州的可持續發展報告時，我很高興。我們 100% 的電力來自再生能源。康乃狄克州為 70%，加州和緬因州為 50%，而且還在上升。因此，我們也一直在開拓這個市場，並真正努力成為那裡的一股正義力量。

And then the other question about -- maybe just in general, like M&A transactions. So you clearly should have some economies-of-scale benefits for Aquarion, but also any other utility in the same state where you currently operate.

然後是另一個問題——也許只是一般性的，例如併購交易。因此，您顯然應該為 Aquarion 帶來一些規模經濟效益，而且還應該為您目前營運所在州的任何其他公用事業帶來效益。

Is there a rule of thumb, for example, as far as O&M savings or SG&A savings or any sort of operational benefits of basically enlarging your operations in the state in which you currently operate? Again, I can quote those, for example, for power. And I'm just wondering if the same is true on the water side.

例如，就 O&M 節省或 SG&A 節省或基本上擴大您目前所在州的業務所帶來的任何營運效益而言，是否存在經驗法則？再說一次，我可以引用這些，例如，權力。我只是想知道在水邊是否也是如此。

I guess, Angie, I would say from my understanding what power numbers are, for what I expect -- and I remember numbers of 10% approximately of non-fuel O&M savings. Those are consistent with where water utilities can expect to potentially have savings now.

我想，安吉，我會根據我的理解說出我所期望的功率數字——我記得大約有 10% 的非燃料運營和維護節省。這些與水務公司現在預計可能節省的費用是一致的。

It changes from opportunity to opportunity. So you have to be careful with rules of thumb like that. Because there are places where you can do better, and there's times when you can't do as well. And so I think that's something that has to be paid attention to. That being said, if there were to happen to be a contiguous consolidation, you tend to have good performance in those contiguous consolidations.

它隨著機會的變化而改變。所以你必須小心這樣的經驗法則。因為有些地方你可以做得更好，有些時候你不能做得更好。所以我認為這是必須注意的事情。話雖這麼說，如果碰巧發生連續整合，您往往會在這些連續整合中獲得良好的效能。

Thank you. Thanks.

謝謝。謝謝。

Thank you.

謝謝。

Thank you, Angie. Great questions.

謝謝你，安吉。很好的問題。

Roger Liddell, Clear Harbor Asset Management.

羅傑·利德爾，Clear Harbor 資產管理公司。

Thank you and good morning.

謝謝你，早安。

Good morning, Roger. Great to hear from you.

早安，羅傑。很高興收到你的來信。

All right. Thank you. Good to be with you. A couple of questions dealing with Connecticut. The $3.9 million of unrecovered expenses, I take it those are separate and distinct from uncollectibles. Is that true?

好的。謝謝。很高興和你在一起。關於康乃狄克州的幾個問題。我認為 390 萬美元的未收回費用是獨立的，與無法收回的費用不同。這是真的嗎？

That is true, Roger.

確實如此，羅傑。

Yes, okay. The recent rate increase in Connecticut that you referred to incorporated a make-whole for Eversource and United on unpaid bills, all of the, call it the baggage from the pandemic period. So the combined public benefit charge went up about 130% that component of the monthly bill.

是的，好的。您提到的康乃狄克州最近的費率上漲，包括了對 Eversource 和 United 未付帳單的補償，所有這些，都可以稱之為疫情期間的包袱。因此，公共福利費用總計增加了每月帳單的 130% 左右。

So that looked to be clearing the decks for Eversource and also on the unrecovered Millstone purchase power -- keeping Millstone in operation. They have been made whole up through July 1. So there appeared to be sensitivity at PURA for at least those issues. And on hanging you with a $3.9 million of unrecovered, can you talk to us just even briefly on why they did that and how you can -- how you are dealing with it?

因此，這看起來是在為 Eversource 掃清障礙，同時也為未恢復的 Millstone 購買力做好了準備——讓 Millstone 繼續運作。到 7 月 1 日為止，它們已經全部完成。因此，PURA 似乎至少對這些問題很敏感。在以未追回的 390 萬美元絞刑時，您能簡單地跟我們談談他們為什麼這樣做以及您可以如何處理嗎？

So there were a few different factors that impacted the decision. So there was -- just to take one component of it offline, there was Senate Bill 7 that had some expenses that were removed because of what Senate Bill 7 said. That was less than $1 million of that total number that was there. So while it was there, it was not as significant as some of the other key items.

因此，有幾個不同的因素影響了這個決定。因此，為了取消其中的一個組成部分，參議院第 7 號法案中的一些費用根據參議院第 7 號法案的規定而被取消。這還不到總金額的 100 萬美元。因此，雖然它在那裡，但它並不像其他一些關鍵項目那麼重要。

I'll give you another example of -- and this is not to be all-inclusive, but they reduced the audit fees that were being charged, the internal audit fees, external audit fees, and said that that was really a shareholder benefit. We obviously very much disagree with that because the fact the audit requirements have nothing to do with equity shareholders. It's 100% to do with the debt providers that provide debt to those entities.

我再舉一個例子——這並不是包羅萬象的，但他們減少了所收取的審計費用，內部審計費用，外部審計費用，並表示這確實是股東的利益。我們顯然非常不同意這一點，因為審計要求與股東無關。這100%與向這些實體提供債務的債務提供者有關。

And so that's something that we hope to continue to work to communicate the reasons why those expenses are in place. But it does give us a fresh opportunity, Roger. Like always, when you have a challenge like this, how can we address the situation and reduce our costs? And so those are the things that we're looking at. It's how can we reduce those audit expenses that are going into the next three years plus.

因此，我們希望繼續努力傳達這些費用的原因。但這確實給了我們一個新的機會，羅傑。像往常一樣，當您遇到這樣的挑戰時，我們如何應對這種情況並降低成本？這些就是我們正在關注的事情。這是我們如何減少未來三年以上的審計費用。

Okay, thank you. And on the performance metrics for management, are they in the public domain? And is there any reason to discuss them here?

好的，謝謝。至於管理績效指標，它們是否屬於公共領域？有什麼理由在這裡討論它們嗎？

Sure. I mean, look, they are in the public domain. It's part of the decision. And it's largely around the metrics associated with our customers and how we -- affordability. And so I think from that perspective, we feel very good about our ability to affect our operations in a way to meet those performance metrics.

當然。我的意思是，看，它們屬於公共領域。這是決定的一部分。它主要圍繞著與我們的客戶以及我們的承受能力相關的指標。因此，我認為從這個角度來看，我們對自己影響營運以滿足這些績效指標的能力感到非常滿意。

And I think that's important to note that like performance, metrics by themselves, some people get nervous about them. But I think as long as they're properly set in a way that you can have a pathway to get there and they can affect what they're trying to affect and we can get to those numbers, it can be a very effective way to increase the efficiency of utilities as well as increase specific objectives that PURA is after as well.

我認為值得注意的是，就像績效、指標本身一樣，有些人會對它們感到緊張。但我認為，只要它們設置得當，你就可以有一條途徑到達那裡，它們可以影響他們想要影響的東西，我們可以得到這些數字，這可能是一種非常有效的方法提高公用事業的效率並提高PURA 所追求的具體目標。

Yes. The plus side, of course, it was the first time we'll be able to have the opportunity to recover components of executive comp at the long-term incentive level. And in the past, we've not been eligible to recover that. So that was a win, as Andrew said.

是的。當然，有利的一面是，這是我們第一次有機會在長期激勵水平上恢復高階主管薪酬的組成部分。在過去，我們沒有資格恢復這一點。正如安德魯所說，這是一場勝利。

Yes, okay. Thank you. The next question is on the advanced metering infrastructure program. Big bucks, I take it, significant reward for all stakeholders from it. But the term advanced metering infrastructure means so many different things, whether it's electric or gas or water. And in many cases, AMI is effectively just a way of keeping the meter reader from getting bitten by the dog.

是的，好的。謝謝。下一個問題是關於先進計量基礎設施計劃。我認為這是一筆巨款，對所有利害關係人來說都是巨大的回報。但先進計量基礎設施這個術語意味著很多不同的東西，無論是電力、天然氣還是水。在許多情況下，AMI 實際上只是防止抄表員被狗咬傷的一種方法。

But the leak detection, I take it, replacement of mechanical meters with ultrasonic-based ones and leak detection, the ability to have notifications to even resi customers on a potential leak, is that all part of the package?

但是洩漏檢測，我認為，用基於超音波的機械儀表替換機械儀表和洩漏檢測，甚至能夠向潛在洩漏的客戶發出通知，這都是一攬子計劃的一部分嗎？

Roger, that's exactly right. We're not installing the drive-by meter-reading system. This will all be automated. We're installing antennas around our service area, so it will be picked up through those signals. So that will eliminate all these truck runs and manual intervention.

羅傑，完全正確。我們不會安裝路過式抄表系統。這一切都將自動化。我們正在服務區域周圍安裝天線，因此將透過這些訊號接收到該訊號。這樣就可以消除所有這些卡車運作和人工幹預。

Customers will have a portal that they can track their daily water use. They will get alerts if they have continuous usage for 24 hours indicating a leak. And so all those benefits that we've long been excited about are going to be available to our customers here in the next couple of years. So we're just starting the implementation now. It's exciting. And we're really, really pleased to get this opportunity, the first of its kind in California for major water utilities.

客戶將擁有一個可以追蹤日常用水情況的門戶。如果連續使用 24 小時，表示發生洩漏，他們將收到警報。因此，我們長期以來一直感到興奮的所有這些好處都將在未來幾年內提​​供給我們的客戶。所以我們現在才開始實施。這很令人興奮。我們真的非常非常高興能獲得這個機會，這是加州大型水務公司的首次此類機會。

And I'm just going to add to Eric, I'm glad you brought up that it was the first of a kind because I think that's something that really highlights the unique area that we're in. Our customer base actually is requesting that they have this access to this type of technology. It fits very well with the Silicon Valley area that we are based in and the high-tech focus. So that part is great.

我想補充一點，艾瑞克，我很高興你提到這是第一次，因為我認為這真正突出了我們所處的獨特領域。我們的客戶群實際上要求他們能夠存取此類技術。它與我們所在的矽谷地區和高科技重點非常契合。所以這部分很棒。

But the part that I find particularly satisfying is the ability for us to help save customers' money with that leak detection that Eric just talked about. That was a major component. There were many others in terms of the savings, but the savings for the customer side on leaks that they were paying for is significant.

但我覺得特別滿意的部分是我們能夠透過艾瑞克剛才談到的洩漏檢測來幫助客戶節省金錢。這是一個主要組成部分。在節省成本方面還有很多其他方面，但對於客戶方來說，他們所支付的洩漏費用所節省的成本是巨大的。

And when you have a valuable water resource that is in California that has different levels of availability, you don't want to waste water. You want to make sure that it's being delivered to its ultimate intended use.

當您在加利福尼亞州擁有不同程度可用的寶貴水資源時，您不想浪費水。您需要確保將其交付至最終預期用途。

As I recall the figure -- my figure may be stale. I hope you can update me. But unaccounted-for water, system wide across the country, was in the range of 30%. I'm hoping that figure is a lot lower. But everything you're speaking of is at the customer end as I think you have described it. And I get those benefits.

當我回憶起這個人物時——我的人物可能已經陳舊了。我希望你能更新我的情況。但全國範圍內的水下落不明率在 30% 左右。我希望這個數字能低很多。但正如我認為您所描述的那樣，您所說的一切都在客戶端。我得到了這些好處。

But how about you managing the system and everything from the production plant to those advanced meters? Are you also instrumenting your systems and able to get the same kind of leak detection that way? And what percentage do you have at the current time for leakage from -- and I suppose any wastewater applications it is leakage into?

但是，您管理系統以及從生產工廠到那些先進儀表的一切怎麼樣？您是否也在對您的系統進行檢測並能夠以這種方式獲得相同類型的洩漏檢測？目前，從任何廢水應用中洩漏的百分比是多少？

Yes. Thank you for the question, Roger. In California, we deployed over 10,000 devices that are built into the steamer nozzle of fire hydrants. And at night, these are activated, and they listen to the pipe. And through various technology, we're able to determine, well, is it a leak or is it water usage in a home or what have you.

是的。謝謝你的提問，羅傑。在加州，我們部署了 10,000 多個內建於消防栓蒸汽噴嘴中的設備。到了晚上，它們就會被激活，它們會聽管子的聲音。透過各種技術，我們能夠確定是漏水還是家裡用水或其他什麼原因。

So we're able to go out and find leaks before they surface as a result of these listening devices that are incorporated into the hydrant caps. And we've deployed those throughout California and in Connecticut. And they're just a fantastic way to preemptively fix small leaks before they devolve into a major leak and blow up the street, et cetera.

因此，由於消防栓蓋中裝有這些監聽裝置，我們能夠在洩漏出現之前就出去發現它們。我們已經在整個加州和康乃狄克州部署了這些設備。它們是在小洩漏演變成大洩漏並炸毀街道等之前先發製人地修復小洩漏的絕佳方法。

So we are in the 7% unaccounted-for range in California. We think that it's world class, but we think we can do even better. And in the other states, we're more in that 15% range. Unfortunately, the national average still is in that 25% to 30% range. And that goes to our hesitancy across the nation to replace the old pipe.

因此，我們處於加州 7% 下落不明的範圍內。我們認為它是世界一流的，但我們認為我們可以做得更好。在其他州，我們更多地處於 15% 的範圍內。不幸的是，全國平均水平仍然在 25% 到 30% 的範圍內。這導致我們在全國範圍內對更換舊管道猶豫不決。

We're committed to 1% replacement a year. That's industry leading, but gee whiz, that's still saying 100 years. And so we'd like to see the rest of the industry adopt that 1% replacement rate at a minimum so we can reduce water loss through leakage.

我們承諾每年更換 1%。這是行業領先的，但是天哪，這仍然是 100 年。因此，我們希望看到該行業的其他公司至少採用 1% 的替代率，這樣我們就可以減少滲漏造成的水損失。

Yes. Eric, I may just add just one thing to that too. The system you just talked about uses artificial intelligence to listen to those signatures. And we also use artificial intelligence on picking pipes just as part of our regular program here in California, which pipe is the right pipe to pick so that it not only looks at the failure but also the impact of failure, which I think is another industry-leading aspect of the utility.

是的。艾瑞克，我也可以增加一件事。你剛才談到的系統使用人工智慧來監聽這些簽名。我們還使用人工智慧來挑選管道，作為我們在加州常規計劃的一部分，挑選哪種管道是正確的管道，這樣它不僅會查看故障，還會查看故障的影響，我認為這是另一個行業-實用程式的主要方面。

That's great. Thank you. Complete and useful answers.

那太棒了。謝謝。完整且有用的答案。

Thank you, Roger. Appreciate your call.

謝謝你，羅傑。感謝您的來電。

Thank you. I'm showing no further questions at this time. I'd now like to turn back to Eric Thornbug for closing remarks.

謝謝。我目前沒有提出任何進一步的問題。現在我想請 Eric Thornbug 作結束語。

Thank you, everyone, for joining us today. We're halfway through the year. We've got a lot more to look forward to into 2024, including a decision on our California rate case, implementation of our AMI initiative in California, progress with bringing greater water supply online in Texas, and advancing our PFAS remediation strategy.

謝謝大家今天加入我們。我們今年已經過一半了。進入 2024 年，我們還有很多值得期待的事情，包括對加州費率案例的決定、在加州實施 AMI 計劃、在德克薩斯州增加在線供水方面取得進展，以及推進我們的 PFAS 修復策略。

SJW Group proudly leverages our national platform to support our distinct local operations in our shared mission to reliably serve high-quality water to 1.5 million people across four states. And while we do this, we make sure we execute on our growth strategy and deliver shareholder value, including paying a dividend, which we have faithfully done for 80 straight years. And we've raised that dividend for 56 consecutive years.

SJW 集團自豪地利用我們的國家平台來支持我們獨特的本地業務，以實現我們的共同使命，即為四個州的 150 萬人可靠地提供優質水。在我們這樣做的同時，我們確保執行我們的成長策略並提供股東價值，包括支付股息，我們已經連續 80 年忠實地這樣做了。我們已連續 56 年提高股利。

I recognize that it's our culture of service to our customers and the local communities that underlies our success. And I'm very proud of our people who make it all possible. Thanks again for your time today and your questions. We look forward to sharing our progress with you next quarter. And in the meantime, Andrew and I, along with the rest of the SJW Group team, are always available for follow up. Thank you again for your interest in SJW Group.

我認識到，我們為客戶和當地社區提供服務的文化是我們成功的基礎。我為我們的員工感到非常自豪，他們使這一切成為可能。再次感謝您今天抽出時間並提出問題。我們期待下個季度與您分享我們的進展。同時，Andrew 和我以及 SJW 集團團隊的其他成員隨時可以跟進。再次感謝您對SJW集團的關注。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。