Essential Utilities Inc (WTRG) 2024 Q1 法說會逐字稿

Hello, and welcome to the Essential Utilities Q1 2024 Earnings Call. My name is George. I'll be your coordinator for today's event. Please note, this conference is being recorded. (Operator Instructions).

您好，歡迎參加 Essential Utilities 2024 年第一季財報電話會議。我的名字是喬治。我將擔任你們今天活動的協調員。請注意，本次會議正在錄製中。 （操作員說明）。

I'd like to hand over to your host today, Mr. Brian Dingerdissen to begin today's conference. Please go ahead, sir.

今天的會議請主持人 Brian Dingerdissen 先生開始。請繼續，先生。

Thanks, George.

謝謝，喬治。

Good morning, everyone, and thank you for joining us for our First Quarter 2024 Earnings Call. If you did not receive a copy of the press release, you can find it by visiting the Investor Relations section of our website and the slides that we will be referencing in the webcast of this event can also be found there.

大家早安，感謝您參加我們的 2024 年第一季財報電話會議。如果您沒有收到新聞稿的副本，您可以訪問我們網站的投資者關係部分找到它，我們將在本次活動的網路廣播中引用的幻燈片也可以在那裡找到。

As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risk, uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10-Q, 10-K and other SEC filings for a description of such risks and uncertainties. During the course of this call, reference may be made to certain non-GAAP financial measures. Reconciliation of any non-GAAP to GAAP financial measures is posted on the website.

提醒一下，本次電話會議期間討論的一些事項可能包括涉及風險、不確定性和其他因素的前瞻性陳述，這些因素可能導致實際結果與此類前瞻性陳述明示或暗示的任何未來結果存在重大差異。請參閱我們最新的 10-Q、10-K 和其他 SEC 文件，以了解此類風險和不確定性的描述。在本次電話會議期間，可能會參考某些非公認會計準則財務指標。任何非 GAAP 與 GAAP 財務指標的調整表均發佈在網站上。

We will begin the call with Chris, our Chairman and CEO, who will provide an update on the company. Mike Huwar, the President of our Gas business, will then provide an update on the Gas business; and then Dan Schuller, our CFO, will provide an overview of the financial results before Chris closes the call and opens the call up for questions.

我們將首先與我們的董事長兼執行長克里斯進行通話，他將提供公司的最新情況。我們的天然氣業務總裁 Mike Huwar 隨後將介紹天然氣業務的最新情況；然後，我們的財務長 Dan Schuller 將概述財務業績，然後克里斯結束電話會議並開始提問。

With that, I will turn it over to Chris Franklin.

這樣，我將把它交給克里斯·富蘭克林。

Thanks, Brian, and good morning, everyone. Thanks for joining us.

謝謝布萊恩，大家早安。感謝您加入我們。

I'll begin with some highlights from the quarter so far. First, as Dan is going to discuss in a lot more detail our financials. We posted GAAP earnings of $0.97 per share, which includes the significant gain on sale from the energy projects, which closed in January.

我將首先介紹本季迄今為止的一些亮點。首先，丹將更詳細地討論我們的財務狀況。我們公佈的 GAAP 收益為每股 0.97 美元，其中包括 1 月關閉的能源項目銷售帶來的巨額收益。

Now at the start of the year has been unusually warm, underscoring our real need for weather normalization at our Gas utility. Operationally, this was another very strong quarter for both Gas and Water, and we continue to achieve industry-leading operational metrics in both Gas and Water. You'll hear more about the Gas division from Mike Huwar in just a few moments.

今年年初異常溫暖，凸顯了我們天然氣公用事業公司真正需要天氣正常化。從營運角度來看，這是天然氣和水務領域另一個非常強勁的季度，我們繼續在天然氣和水務方面實現領先業界的營運指標。稍後您將從 Mike Huwar 那裡了解到更多有關天然氣部門的資訊。

Now related to our acquisition program, we have seen real progress on the C-motion, which was introduced by Chairman D. Frank. We understand that more than 30 people have contributed to the process of the C-motion comment period, and we expect the PUC to vote on the motion relatively soon. We will continue to monitor the progress here, and we hope the process is completed soon here in Pennsylvania.

現在，與我們的收購計劃相關的是，我們已經看到了主席 D. Frank 介紹的 C-motion 的真正進展。據我們了解，已有 30 多人參與了 C 動議評議期的進程，我們預計 PUC 會相對快速地對該動議進行投票。我們將繼續關注這裡的進展，我們希望這一過程很快在賓夕法尼亞州完成。

Now as you probably saw, the EPA published the first ever limits on PFAS last month. These were largely in line with what we were expecting, and I'll get some detail in a moment, including our CapEx spending and PFAS -- on PFAS.

正如您可能已經看到的，美國環保署上個月發布了第一個 PFAS 限制。這些基本上符合我們的預期，我稍後會提供一些詳細信息，包括我們的資本支出和 PFAS——關於 PFAS。

Now speaking of CapEx, our significant infrastructure investment program continues to upgrade our pipes and plants which enhance our ability to deliver on our mission of providing reliable water and natural gas to our customers. Through March 31, we have invested approximately $253 million. And as a reminder, we expect to invest between $1.3 billion and $1.4 billion this year, which will be a record capital spend for us, by the way.

現在談到資本支出，我們重要的基礎設施投資計畫繼續升級我們的管道和工廠，這增強了我們履行為客戶提供可靠的水和天然氣的使命的能力。截至 3 月 31 日，我們已投資約 2.53 億美元。提醒一下，我們預計今年將投資 13 億至 14 億美元，順便說一下，這對我們來說將是創紀錄的資本支出。

You've heard me say that many times. And I can't tell you how proud I am of the company's leadership and what they have accomplished in terms of our work to improve customer reliability. As part of our continued focus on operational excellence in 2024, I thought you might enjoy hearing from Mike Huwar, our President of our Natural Gas division. And later in the year, you'll hear from Colleen Arnold, who runs our Water business. But we're leading -- we have leading efforts going on in our Natural Gas business, and I think you'll find it interesting.

你已經聽我說過很多次了。我無法告訴你我對公司的領導層以及他們在提高客戶可靠性方面所取得的成就感到多麼自豪。作為我們在 2024 年繼續關注卓越營運的一部分，我想您可能會喜歡聽我們天然氣部門總裁 Mike Huwar 的演講。今年晚些時候，您將收到負責我們水業務的科琳·阿諾德 (Colleen Arnold) 的來信。但我們正在領先——我們在天然氣業務方面正在進行領先的努力，我想你會發現它很有趣。

And finally, on this slide, it's been a busy week for the company. On Wednesday, we held our Annual Meeting of shareholders, which on all agenda items received over 90% of shareholder support. Notably, I'm pleased to report that Tammy Linde and Chris Bruner, have been elected to the Board. If you take a look at the next slide, I think you'll agree that they will be great additions to the Essential Board.

最後，在這張投影片上，這對公司來說是忙碌的一周。週三，我們召開了年度股東大會，所有議程項目都獲得了超過 90% 的股東支持。值得注意的是，我很高興地報告 Tammy Linde 和 Chris Bruner 已被選為董事會成員。如果您看下一張投影片，我想您會同意它們將成為 Essential Board 的重要補充。

Over the last 10 years, we've really focused on corporate governance. And as a result, I think we have one of the most -- what we consider best-in-class corporate governance guidelines. And I believe we are really a leader in that part of our business. For example, our corporate governance includes tenure limitations and retirement ages.

在過去的十年裡，我們非常關注公司治理。因此，我認為我們擁有我們認為是同類最佳的公司治理準則之一。我相信我們確實是這部分業務的領導者。例如，我們的公司治理包括任期限制和退休年齡。

In fact, Ellen Ruff, our longest tenured Board member, and she was a former Duke Executive; and Lee Stewart, our long-time Audit Committee Chair, reached retirement age over the past year and formally retired from the Board this week. Now through a formal Board succession search process, we identified Tammy and Chris, who I believe will fit seamlessly into what is already a very strong board.

事實上，艾倫·拉夫（Ellen Ruff）是我們任期最長的董事會成員，她是前杜克大學高管；我們的長期審計委員會主席李·斯圖爾特 (Lee Stewart) 已於過去一年達到退休年齡，並於本周正式從董事會退休。現在，透過正式的董事會繼任搜尋流程，我們確定了塔米和克里斯，我相信他們將無縫融入已經非常強大的董事會。

Tammy, as some of you may already be familiar with is a long-time industry Executive General Counsel at PSEG in New Jersey. She brings a great utility, legal and regulatory bind to our Board. Chris is a retiring audit partner, EY, and he previously served as the Head of the Philadelphia office of EY, and he brings a depth of knowledge and experience of participating in audit committees and Board discussions. Chris (inaudible) year-end and has passed the independent tests of the New York Stock Exchange and the SEC, and of course, declared independent by our Board. We welcome Tammy and Chris to the Board, look forward to their service and I'll just mention one other thing. We disclosed through an 8-K this morning that the Board has offered me and I've accepted a new 3-year contract that will commence on July 1 of this year, go through mid-2027. That will be my fourth 3-year contract since I've been a CEO.

Tammy，你們中的一些人可能已經熟悉了，她是新澤西州 PSEG 的長期行業執行總法律顧問。她為我們的董事會帶來了巨大的效用、法律和監管約束。 Chris 是安永即將退休的審計合夥人，此前曾擔任安永費城辦事處負責人，他在參與審計委員會和董事會討論方面擁有豐富的知識和經驗。 Chris（聽不清楚）年底已通過紐約證券交易所和 SEC 的獨立測試，當然，我們的董事會也宣布獨立。我們歡迎 Tammy 和 Chris 加入董事會，期待他們的服務，我只想提一件事。今天早上我們透過 8-K 披露，董事會已向我提供了一份為期 3 年的新合同，該合約將於今年 7 月 1 日開始，一直持續到 2027 年中期。這將是我擔任執行長以來的第四份三年合約。

Now moving to Slide 7. I want to spend a little bit more time on PFAS, given the final EPA rule that was published last week -- last month. As we've been discussing for more than 5 years, Essential has been an industry leader in setting company-wide standards for PFAS and publicly disclosing all of our sample results where we find PFAS and certainly in creating innovative solutions to address PFAS issue. As a result, we are well positioned to comply with the EPA limits that were just set. Unlike many other utilities in the country, we have tested all of our water sources, identified the sources that need treatment, and we've been implementing mitigation solutions now for years. In fact, Aqua has installed 9 treatment systems to date and mitigated another 10 sites by optimizing the use of its supplies and removing wells from service.

現在轉到幻燈片 7。正如我們 5 多年來所討論的那樣，Essential 一直是製定全公司 PFAS 標準、公開披露我們發現 PFAS 的所有樣本結果以及創建解決 PFAS 問題的創新解決方案方面的行業領導者。因此，我們完全有能力遵守 EPA 剛剛制定的限制。與該國許多其他公用事業公司不同，我們已經測試了所有水源，確定了需要處理的水源，並且多年來我們一直在實施緩解解決方案。事實上，Aqua 迄今已安裝了 9 個處理系統，並透過優化其供應的使用和取消服務井來緩解另外 10 個地點的壓力。

For 2024, we estimate that more than 10 systems will go online by year-end. And by using our modular design tailored to small systems, we anticipate ramping up our capability to mitigate, I think is 100 systems in a single year. Just last month, we held the groundbreaking for a site in New Jersey. The final rule that came out was largely in line with our expectations. So no surprises there. Without getting into too much detail, one of the most significant changes we saw was that the period of compliance was changed to 5 years. You may remember that previously, we were all thinking that the compliance period was going to be a 3-year period. And we think this was a very prudent approach and may be able to ease some of that potential pressure on supply chain for many of us utilities rushing to implement our mitigation solutions.

2024年，我們預計年底將有超過10個系統上線。透過使用我們針對小型系統量身定制的模組化設計，我們預計將提高我們的緩解能力，我認為一年內可以緩解 100 個系統。就在上個月，我們在新澤西州舉行了奠基儀式。最終出來的規則基本上符合我們的預期。所以這並不奇怪。無需贅述，我們看到的最重要的變化之一是合規期限更改為 5 年。您可能還記得，之前我們都認為合規期是三年。我們認為這是一種非常謹慎的方法，對於我們許多急於實施緩解解決方案的公用事業公司來說，可能能夠緩解供應鏈上的一些潛在壓力。

Recently, we named one of our internal experts to a newly created role solely focused on the rollout of the treatment technology. And one of his preference to charges is to standardize our approach and minimize design and construction costs. (inaudible) is a leading -- is leading this work from headquarters to ensure that our standard is adopted across all of our subsidiaries, no matter what state, and all impacted operations. And we're seeing the benefits of this structure already.

最近，我們任命了一位內部專家來擔任新設立的職位，專門負責治療技術的推廣。他對收費的偏好之一是標準化我們的方法並最大限度地減少設計和施工成本。 （聽不清楚）是一個領導者——正在總部領導這項工作，以確保我們的所有子公司（無論哪個州）以及所有受影響的營運部門都採用我們的標準。我們已經看到了這種結構的好處。

Our work to mitigate PFAS -- PFAS-related cost to our customers also continued as we pursue lawsuits against the manufacturers and apply for state and federal loans and grants. We're going to stay focused on keeping costs down for our customers. Now while our costs may change as we move through the process, we currently estimate that we'll spend at least $450 million to complete this PFAS mitigation.

我們繼續努力減輕 PFAS 為客戶帶來的與 PFAS 相關的成本，同時我們對製造商提起訴訟併申請州和聯邦貸款和贈款。我們將繼續專注於為客戶降低成本。現在，雖然隨著流程的推進，我們的成本可能會發生變化，但我們目前估計將花費至少 4.5 億美元來完成這項 PFAS 緩解措施。

I'll leave you with one final thought on this topic. We were a pioneer on our PFAS commitment 5 years ago. We will plan, we expect to remain a leader in this area. And we also see opportunities to help other utilities with their PFAS mitigation plans, which obviously could help some of our corporate development work.

我將留給您關於這個主題的最後一個想法。五年前，我們是 PFAS 承諾的先驅。我們會計劃，我們希望繼續在這個領域保持領先地位。我們也看到了幫助其他公用事業公司製定 PFAS 緩解計畫的機會，這顯然可以幫助我們的一些企業發展工作。

So next, it's really my pleasure to introduce the President of our Natural Gas division, Mike Huwar. Mike has over 38 years of industry experience. He joined us from NiSource back in 2020, when we completed the transaction with Peoples. He's been a tremendous addition to the team. And I've asked Mike to join us today and provide some details on our Natural Gas utility that he leads. And by the way, just to give you a sense of size, we provide service to 750,000 customers in Pennsylvania and Kentucky.

接下來，我很高興向大家介紹我們天然氣部門的總裁 Mike Huwar。 Mike 擁有超過 38 年的行業經驗。他於 2020 年從 NiSource 加入我們，當時我們完成了與 Peoples 的交易。他對團隊來說是一個巨大的補充。我今天邀請麥克加入我們，並提供有關他領導的天然氣公用事業公司的一些詳細資訊。順便說一句，為了讓您了解規模，我們為賓州和肯塔基州的 75 萬名客戶提供服務。

Mike, do you want to take it away?

麥克，你想把它拿走嗎？

Sure. Thanks, Chris, and I'm happy to be here today and appreciate the opportunity to highlight the significant and important work that the team of Peoples and Delta's Gas is doing.

當然。謝謝克里斯，我很高興今天來到這裡，並感謝有機會強調 Peoples 和達美天然氣團隊正在進行的重要且重要的工作。

So moving to Slide 9. As noted on the slide, Peoples is the largest LDC in PA with over 703,000 customers and $3.5 billion of rate base as of the end of 2023. Additionally, our Gas segment includes Delta Gas, now serving over 40,000 customers in Kentucky. When you think of these 2 jurisdictions, it's important to be mindful that both Pennsylvania and Kentucky are supportive regulatory environments. And in Pennsylvania, People's service territory sits directly on top of the Marcellus and Utica shale production zones that continue to give customers a lower-cost commodity to the national average, and that's helping keep bills affordable.

現在轉到幻燈片9。 ，目前為超過40,000 名客戶提供服務在肯塔基州。當您想到這兩個司法管轄區時，請務必注意賓州和肯塔基州都是支持性的監管環境。在賓州，人民服務區直接位於馬塞勒斯和尤蒂卡頁岩生產區的頂部，這些生產區繼續為客戶提供低於全國平均水平的成本較低的商品，這有助於保持帳單負擔得起。

Since the acquisition by Essential, the clear focus of our Gas segment has been the increased safety and reliability of our 15,000 mile distribution system. The best example of that focus has been the reduction of year-end outstanding leakage on our annual DOT Report, having reduced outstanding leaks by 83% over the past 5 years. It should also be noted People has maintained its really strong focus on customer service, continuing to lead its peer group on the annual PA PUC customer satisfaction survey.

自從被 Essential 收購以來，我們天然氣部門的明確重點是提高我們 15,000 英里配送系統的安全性和可靠性。這一重點的最佳例子是我們年度 DOT 報告中年終未清洩漏的減少，在過去 5 年中已將未清洩漏減少了 83%。還應該指出的是，People 一直非常關注客戶服務，在年度 PA PUC 客戶滿意度調查中繼續領先同業。

Moving to Slide 10. You will recall that we filed a Pennsylvania gas rate case just before the new year, it's the first case under Essential ownership, after staying out since 2019. And it includes a doubling of rate base from the last fully projected future test year as compared to this case from $2.1 billion to $4.2 billion primarily for replacement of aging bare steel and cast iron mains, work that both increases safety and reliability and reduces greenhouse gas emissions.

轉到幻燈片10。倍的情況與本案例相比，測試年的費用從21 億美元增加到42 億美元，主要用於更換老化的裸鋼和鑄鐵總管，這項工作既提高了安全性和可靠性，又減少了溫室氣體排放。

In this case, Peoples has included a weather normalization mechanism like many of our peers currently have available to them. The case is proceeding as planned, evidentiary hearings are scheduled for May 9. And as you would know, this is the typical time during the rate case process when conversations are happening between stakeholders. Finally, we expect rates to go into effect before the winter heating season.

在這種情況下，Peoples 包含了一個天氣正常化機制，就像我們的許多同行目前可以使用的機制一樣。該案件正在按計劃進行，證據聽證會定於 5 月 9 日舉行。最後，我們預計費率將在冬季供暖季節之前生效。

On Slide 11. Beyond the operational focus and customer satisfaction performance, the Peoples and Essential teams continue to execute on aggressive pipeline modernization programs. Under the currently active long-term infrastructure improvement plan in PA, Peoples has replaced over 510 miles of pipeline or 60% of the current LTIP target, while again, enhancing the safety and reliability of our distribution system. This effort is leading our way to the target of reducing CO2 emissions by 60% by 2035.

在投影片 11 上。 除了營運重點和客戶滿意度表現之外，Peoples 和 Essential 團隊還繼續執行積極的管道現代化計劃。根據賓州目前正在進行的長期基礎設施改善計劃，Peoples 已經更換了超過 510 英里的管道，即當前 LTIP 目標的 60%，同時再次增強了我們配電系統的安全性和可靠性。這項努力正在引領我們實現 2035 年將二氧化碳排放量減少 60% 的目標。

At the conclusion of our current LTIP, Peoples will assess our progress and continue this critical infrastructure improvement work in a series of 5-year plans. It should be noted the runway of needed safety and reliability enhancements continues to grow as the industry focused on rebuilding infrastructure and reducing greenhouse gas emissions.

在我們目前的 LTIP 結束時，Peoples 將評估我們的進展，並在一系列 5 年計劃中繼續這項關鍵的基礎設施改善工作。應該指出的是，隨著業界專注於重建基礎設施和減少溫室氣體排放，所需的安全性和可靠性增強的跑道不斷增長。

Beyond the pipeline replacement and modernization, Peoples has been active in implementing technology improvements that have short-term and long-term benefits to system operation. Our ability to reduce the potential of overpressure events and the GPS functionality of our tracking and traceability program highlight this opportunity.

除了管道更換和現代化改造之外，Peoples 還積極實施技術改進，為系統運作帶來短期和長期效益。我們減少超壓事件可能性的能力以及我們的追蹤和可追溯性計劃的 GPS 功能凸顯了這一機會。

Lastly, Peoples will pilot a game-changing meter technology in 2024 that allows utilities to interact with customers and have greater control over the distribution system. At Peoples and Essential, we are excited about the progress we have made and look forward to our future and continued focus on safety, reliability, affordability and our customers.

最後，Peoples 將在 2024 年試行一項改變遊戲規則的電錶技術，使公用事業公司能夠與客戶互動，並對配電系統有更大的控制權。在 Peoples 和 Essential，我們對所取得的進步感到興奮，並對未來充滿期待，並繼續專注於安全性、可靠性、可負擔性和客戶。

Chris, thank you, and back to you.

克里斯，謝謝你，回到你。

Mike, thanks for your leadership. Thanks for being with us today.

麥克，謝謝你的領導。感謝您今天和我們在一起。

View of the financial results. Dan?

查看財務業績。擔？

Thanks, Chris, and good morning, everyone.

謝謝克里斯，大家早安。

On this slide, let's talk high level, and then we'll get into the details of the waterfall. The quarterly performance was strong, especially when factoring in the gain in the energy project sale that was completed in January.

在這張投影片上，我們先進行高層次的討論，然後我們將深入了解瀑布的細節。季度業績強勁，尤其是考慮到一月份完成的能源項目銷售的收益。

Operating revenues were down due to the decline in natural gas commodity prices year-over-year, which positively impacted customer bills. Weather was warmer than normal, what was largely comparable to last year. We continued our focus on managing O&M expenses with a slight decline there year-over-year. I'll cover this more in detail when we talk through the waterfalls. These items, combined with the after-tax gain of $66 million from the sale of 3 district energy projects, resulted in net income growth of 38.8% and earnings per share grew up to 34.7%, compared to last year.

由於天然氣商品價格年減，營業收入下降，這對客戶帳單產生了積極影響。天氣比正常溫暖，與去年基本相當。我們繼續專注於管理運維費用，較去年同期略有下降。當我們談論瀑布時，我將更詳細地介紹這一點。這些項目，加上出售 3 個區域能源項目帶來的 6,600 萬美元稅後收益，與去年相比，淨利潤增長了 38.8%，每股收益增長了 34.7%。

Next, let's walk through the first quarter waterfalls. On Slide 14, we have the revenue waterfall for the first quarter. Moving left to right, we have regulatory recoveries or rate increases and surcharges of nearly $14 million. Acquisitions and organic growth in the Water business contributed $3 million and that slow increase is due to increased volumes of both Water and Gas. This was then offset by a decline in other and a significant reduction in purchase gas costs. The decline in other reflects a positive onetime impact of contract to deposit fees in Q1 2023 and lower PNG -- lower PNG Universal Service rider revenue this year due to lower customer bills. The lower purchased gas reflects the significantly lower gas commodity price that our customers enjoyed relative to 2023.

接下來我們就來遊覽第一季的瀑佈吧。在投影片 14 上，我們看到了第一季的營收瀑布圖。從左到右，我們有近 1400 萬美元的監管追償或加息以及附加費。水業務的收購和有機成長貢獻了 300 萬美元，成長緩慢是由於水和天然氣用量的增加。隨後，這被其他業務的下降以及購買天然氣成本的大幅下降所抵消。其他收入的下降反映出 2023 年第一季合約存款費和巴布亞紐幾內亞較低的合約費的一次性影響——由於客戶帳單減少，今年巴布亞新幾內亞普遍服務乘客收入較低。購買的天然氣數量減少反映了我們的客戶享受的天然氣商品價格相對 2023 年大幅下降。

I'll note that one thing you don't see here is a large change in the volume of gas due to weather. This is because the same period in 2023 also had materially warmer than normal weather. For the first quarter of 2024, it was about 15% warmer than normal, which resulted in weather-related natural gas sales net of purchase gas costs, think about $20 million below projections or an earnings impact of $0.05 per share.

我要指出的是，您在這裡看不到的一件事是由於天氣而導致的氣體體積的巨大變化。這是因為 2023 年同期的天氣也比正常天氣暖和得多。 2024 年第一季度，氣溫比正常情況高出約 15%，這導致與天氣相關的天然氣銷售（扣除購買天然氣成本），比預測低 2,000 萬美元，或每股收益影響 0.05 美元。

Next, let's take a look at the O&M on Slide 15. Here, we have the O&M waterfall. We saw increases in production costs of $2.4 million and employee-related costs of $2 million. Employee-related costs are largely in line with inflation. However, we saw some larger increases in production expenses due to purchased water, purchased wastewater and power prices.

接下來我們來看看第15張幻燈片的運維，這裡有一個運維瀑布。我們發現生產成本增加了 240 萬美元，員工相關成本增加了 200 萬美元。與員工相關的成本很大程度與通貨膨脹一致。然而，由於外購水、外購廢水和電價的影響，生產費用出現了較大幅度的成長。

Next, we had an increase due to customer growth in the Water segment. These increases were offset by the lower costs from the Gas segment Universal Services rider, which decreased due to the lower gas commodity prices this year as well as lower other expenses. Other includes a number of items, increases in bad debt and materials and supplies, decreases in year-over-year Gas segment expenses and the impact of the sales of both West Virginia utility assets and the energy projects. This resulted in an O&M that was down slightly from last year. So overall, a positive story here. For the year, we expect O&M to be largely in line with our historic norms.

接下來，由於水領域客戶的成長，我們的業績有所成長。這些增長被天然氣部門普遍服務附加成本的降低所抵消，該附加成本由於今年天然氣商品價格下降以及其他費用降低而下降。其他包括許多項目、壞帳以及材料和供應的增加、天然氣部門費用同比減少以及西維吉尼亞州公用事業資產和能源項目銷售的影響。這導致運維比去年略有下降。總的來說，這是一個正面的故事。今年，我們預計營運和維護將基本符合我們的歷史標準。

Next, let's look at the EPS waterfall on Slide 16. Starting on the left side of the EPS waterfall was $0.72 from last year. And the next thing we see is the $0.20 pickup in the Other category. This increase in EPS includes the $66 million after-tax gain on sale from the energy projects, which closed in January. This was offset by increases in depreciation, interest and taxes other than income.

接下來，讓我們看看幻燈片 16 上的 EPS 瀑布。接下來我們看到的是「其他」類別中的 0.20 美元提貨。 EPS 的成長包括 1 月關閉的能源項目銷售帶來的 6,600 萬美元稅後收益。這被收入以外的折舊、利息和稅收的增加所抵消。

Next, we have the impact of the rates and surcharges, which contributed almost $0.04. Then we have slight increases due to Water growth and additional volumes for both Water and Gas. And finally, an insignificant impact of increased expenses. That lands then at $0.97 of EPS for the quarter. When we gave you that $0.97 of GAAP earnings per share for the quarter, and we subtracted off the gain on sale of $0.24, and then we add back the $0.05 for weather that I mentioned earlier, we get to a number that exceeds our Q1 consensus.

接下來，我們考慮費率和附加費的影響，其中貢獻了近 0.04 美元。然後，由於水的增長以及水和天然氣的增加量，我們略有增加。最後，費用增加的影響微不足道。該季度每股收益為 0.97 美元。當我們給出本季 0.97 美元的 GAAP 每股收益，減去 0.24 美元的銷售收益，然後再加上我之前提到的天氣因素 0.05 美元時，我們得到的數字超出了我們第一季的共識。

Next, let's turn to Slide 16 to provide an update on regulatory activity. This slide depicts our regulatory activity so far this year. We continue to manage our regulatory activity to maintain safe and reliable service, earn a return on the capital we invest and minimize regulatory lag while always considering affordability for our customers. Thus far, we received authorization to increase Water segment revenues by $13.7 million annually in Illinois, North Carolina, Ohio and Pennsylvania and the Kentucky and Pennsylvania gas businesses have surcharges that will increase revenues by $1 million annually. We have Water segment rate cases or surcharges pending in Illinois, New Jersey, Texas and Virginia that totaled $43.2 million. The detailed breakdown of these can be found in the Appendix. And of course, Mike just covered the Peoples rate case, which is underway currently.

接下來，讓我們轉向投影片 16，了解監管活動的最新情況。這張投影片描述了我們今年迄今的監管活動。我們繼續管理我們的監管活動，以維持安全可靠的服務，獲得我們投資的資本回報，並最大限度地減少監管滯後，同時始終考慮客戶的承受能力。到目前為止，我們已獲授權將伊利諾伊州、北卡羅來納州、俄亥俄州和賓夕法尼亞州的水務部門收入每年增加1370 萬美元，而肯塔基州和賓夕法尼亞州天然氣業務的附加費將使收入每年增加100 萬美元。我們在伊利諾州、新澤西州、德州和維吉尼亞州有待處理的水費案件或附加費，總額為 4,320 萬美元。這些的詳細分類可以在附錄中找到。當然，麥克剛剛報道了目前正在進行的人民利率案件。

Finally, we expect to file a Pennsylvania water rate case during the third full week of May, which is nearly 3 years since the last trials. We'll provide more details on that case on our Q2 call in August.

最後，我們預計將在 5 月的第三週內提交賓州水費案件，距離上次審判已近 3 年。我們將在 8 月的第二季電話會議上提供有關該案例的更多詳細資訊。

And with that, I'll hand the mic back to Chris. Chris?

然後，我會將麥克風交還給克里斯。克里斯？

Alright Dan, thanks.

好的，丹，謝謝。

So next, let's touch briefly on the municipal acquisition program. As of this call, we have 6 signed asset purchase agreements in 2 states where we already have existing water and wastewater operations. These acquisitions will add over 215,000 customer equivalents and about $385 million in purchase price. We continue to see strong and healthy pipeline of opportunities for additional growth, and we're currently engaged in active discussions with many municipalities. In fact, the customer count is over 400,000, and that would be on the water and wastewater side.

接下來，讓我們簡單介紹一下市政收購計畫。截至本次電話會議，我們已在 2 個州簽署了 6 項資產購買協議，在這些州我們已經擁有現有的供水和廢水處理業務。這些收購將增加超過 215,000 個客戶等價物以及約 3.85 億美元的收購價格。我們繼續看到強勁而健康的額外成長機會，目前我們正在與許多城市進行積極討論。事實上，客戶數量超過 40 萬人，其中涉及水和廢水方面。

As we mentioned, if Chairman De Frank's proposal and any of the associated bills in the legislature are successful, there should be a much clearer path to closing municipal acquisitions in Pennsylvania in the future. And I think that will free some of the municipals that are currently thinking about it but maybe standing still for the moment.

正如我們所提到的，如果德弗蘭克主席的提議以及立法機構中的任何相關法案獲得成功，那麼未來賓州的市政收購交易應該有一條更清晰的路徑。我認為這將釋放一些目前正在考慮這個問題但可能暫時停滯不前的市政當局。

We continue to believe increasing compliance requirements, such as PFAS, should lead to continued consolidation in what, as you all know, in a very fragmented industry with over 50,000 water systems and 14,000 wastewater systems throughout the country.

我們仍然相信，不斷增加的合規要求（例如 PFAS）應該會導致全國範圍內擁有 50,000 多個供水系統和 14,000 個廢水系統的非常分散的行業的持續整合。

All right. So in closing, let's update the guidance we provided in February so you have a clear line of sight to the opportunities in front of us. In February, we provided guidance for 2024 of net income per diluted common share of $1.96 to $2. And at the time, we clearly indicated that that guidance was based on normal weather as most utilities do. And then as mentioned, the weather in Q1 has been much warmer than normal. So for clarity's sake, if we assume normal weather from this point forward, we would finish the year on a GAAP basis above our guidance range due to the gain on sale. Dan took you through the -- some of the calculations there just a moment ago.

好的。最後，讓我們更新 2 月提供的指導，以便您對我們面前的機會有一個清晰的認識。 2 月份，我們為 2024 年每股稀釋普通股淨利潤提供了 1.96 至 2 美元的指導。當時，我們明確表示該指導意見是基於正常天氣，就像大多數公用事業公司所做的那樣。如同前面所提到的，第一季的天氣比正常情況要暖和得多。因此，為了清楚起見，如果我們假設從現在開始天氣正常，由於銷售收益，我們將以公認會計原則為基礎，高於我們的指導範圍。丹剛剛帶您完成了一些計算。

Now through 2028, we plan to invest about $7.2 billion in regulated infrastructure in our existing utilities, a really strong capital program. And in 2024, we expect to invest between $1.3 billion to $1.4 billion, and we're on track to do this. And as we said many times, this is the primary generator of more reliability and service for our customers, as well as the primary generator of earnings per share for our shareholders. Based on this investment, we expect rate base will grow at a compounded annual growth rate of approximately 8% for Water and about 10% for Natural Gas through 2028. And the combined utility rate base will grow a compound annual growth rate of over 8%.

從現在到 2028 年，我們計劃投資約 72 億美元用於現有公用事業的受監管基礎設施，這是一個非常強大的資本計劃。到 2024 年，我們預計將投資 13 億至 14 億美元，而且我們正在按計劃實現這一目標。正如我們多次所說的，這是為我們的客戶提供更多可靠性和服務的主要來源，也是為我們股東帶來每股盈餘的主要來源。基於這項投資，我們預計到2028 年，水的費率基數將以約8% 的複合年增長率增長，天然氣的複合年增長率將達到10% 左右。率將超過8% 。

We continue to expect that together organic customer growth and growth from acquisitions for water and wastewater will climb at a rate of 2% to 3% per year on average. We remind investors always that growth from acquisitions is lumpy and should be viewed over a 3-year average. We expect continued stability in our natural gas customer base. And as we said before, we expect to raise about $250 million in equity this year using an ATM equity program.

我們繼續預計，有機客戶成長以及水和廢水收購帶來的成長將以平均每年 2% 至 3% 的速度攀升。我們始終提醒投資者，收購帶來的成長是不穩定的，應該以三年平均來看待。我們預計天然氣客戶群將持續穩定。正如我們之前所說，我們預計今年將透過 ATM 股權計畫籌集約 2.5 億美元的股權。

We remain committed to a 60% reduction in our Scope 1 and Scope 2 greenhouse gas emissions by 2035 from our 2019 baseline and as you know, we've made significant progress already on this, and we estimate it to be over 25% as of year-end last year. I'll note that the team feels that we are well prepared for the SEC climate rule, which is currently stayed due to various legal challenges.

我們仍然致力於在 2035 年將範圍 1 和範圍 2 溫室氣體排放量比 2019 年基準減少 60%，如您所知，我們已經在這方面取得了重大進展，我們估計截至 2019 年將減少 25% 以上去年年底。我要指出的是，團隊認為我們已經為 SEC 氣候規則做好了充分準備，目前由於各種法律挑戰而被保留。

With that, I'm going to conclude my formal remarks for today, and we'd like to open it up for questions. I'll send it back to the operator.

至此，我將結束今天的正式發言，並歡迎大家提問。我會把它發回給接線員。

(Operator Instructions) Our first question today is coming from Durgesh Chopra from Evercore ISI.

（操作員說明）我們今天的第一個問題來自 Evercore ISI 的 Durgesh Chopra。

Just I wanted to kind of kick start with the gas rate case in Pennsylvania. Obviously, you guys have probably seen all the media reports around the water case that is ongoing. Just any read-throughs from there? Or any color that you can share on how that case is progressing?

我只是想從賓夕法尼亞州的汽油費率案件開始。顯然，你們可能已經看到了所有有關正在進行的水案件的媒體報告。只是那裡的任何通讀嗎？或者可以分享一下該案的進度嗎？

Yes. I guess I would just say, apples to oranges in many ways. And so we feel very good about the strong case that we presented. And as Dan mentioned -- I'm sorry, as Mike mentioned in his comments, that as you would expect, we're sort of in that period of time where we can have discussions about a settlement, and we'll see how those discussions go, but we're prepared to see this case through. So far, very, very curative and good relationships with the advocates and the commission.

是的。我想我只想說，在很多方面都是蘋果和橘子。因此，我們對我們提出的強有力的案例感到非常滿意。正如丹所提到的——我很抱歉，正如邁克在評論中提到的那樣，正如你所期望的那樣，我們正處於可以討論和解方案的時期，我們將看看這些如何討論仍在繼續，但我們已準備好完成此案。到目前為止，我們與倡議者和委員會的關係非常非常好。

Excellent. Thanks for that update, Chris. And then maybe just switching gears. Other states, and I'm sure you've seen this also, there have been some lawsuits filed by residence against the utility, the water utility related to PFOS, PFAS. Can you comment if -- whether you've seen anything like that in your service territories and implications, if any, for your business?

出色的。感謝您的更新，克里斯。然後也許只是切換齒輪。在其他州，我相信您也看到了這一點，有一些由居住地針對公用事業公司、與 PFOS、PFAS 相關的自來水公司提起的訴訟。您能否評論一下您是否在您的服務領域中看到過類似的情況以及對您的業務的影響（如果有）？

So, fortunately, we have not. And I'd like to think that that's because we've been so out front on this issue for so many years. Durgesh, you'll recall, 5 years ago, we started down this path before most people have been -- didn't even knew what the PFAS discussion was, and we started mitigation well before many others. So I'd like to think it's because of our work we've been doing.

所以，幸運的是，我們沒有。我想這是因為我們多年來在這個問題上一直走在前面。 Durgesh，你會記得，5 年前，我們在大多數人之前就開始了這條道路，甚至不知道 PFAS 討論是什麼，而且我們比其他許多人早開始採取緩解措施。所以我想這是因為我們一直在做的工作。

And then our disclosures have been really strong. Anywhere we've PFAS, we have reported it publicly. And of course, we created that internal standard at 13 parts per trillion several years ago, well before the EPA came out with any standard. And so I'd like to think that all of that proactive work is part of the reason why we haven't been in that focus for losses. But no, at this point, we've not seen anything.

然後我們的披露非常有力。凡是存在 PFAS 的地方，我們都會公開報告。當然，我們幾年前就制定了萬億分之十三的內部標準，遠早於 EPA 出台任何標準。因此，我認為所有這些積極主動的工作都是我們沒有關注損失的部分原因。但不，目前我們還沒有看到任何東西。

I can certainly attest to your leadership there. You're kind of the first voice in the industry talking those issues. Okay. Thank you.

我當然可以證明你在那裡的領導能力。您是業內第一個談論這些問題的人。好的。謝謝。

Our next question will be coming from Davis Sunderland calling-in from Baird.

我們的下一個問題將來自戴維斯·桑德蘭從貝爾德打來的電話。

Wanted to ask about the pending municipal transactions and the PFAS guidance for the $450 million in capital. Does this include the pending transactions? And maybe, I guess, just to add on to that, how has PFAS discussions or discussions surrounding costs associated with upgrading systems made its way into potential actions for new systems so far?

想詢問懸而未決的市政交易以及 PFAS 對 4.5 億美元資本的指導。這包括待處理的交易嗎？我想，也許，只是補充一下，到目前為止，PFAS 討論或圍繞與升級系統相關的成本的討論如何影響到新系統的潛在行動？

Yes, it's a good question. And what we're largely focused on, as you mentioned at the beginning of your question is municipal transactions. And generally, generally, I'm not talking about Los Angeles and Philadelphia, New York, but generally, the municipal systems that we're focused on are smaller. And so I would say more of a prevailing theme would be that they haven't tested yet. And so not all of them even know, whether or not they have PFAS. And so I think what we're going to find as this MCL is put the maximum contaminant level, was put in place recently. I think we're going to find a lot of testing, we're going to find a lot of them from the fine prob.

是的，這是一個好問題。正如您在問題開頭提到的，我們主要關注的是市政交易。一般來說，一般來說，我不是說洛杉磯和費城、紐約，但一般來說，我們關注的市政系統規模較小。所以我想說更普遍的主題是他們還沒有測試過。因此，並非所有人都知道自己是否含有 PFAS。因此，我認為我們會發現，由於 MCL 的污染物水平達到了最高水平，因此最近才到位。我認為我們會找到很多測試，我們會從精細的問題中找到很多測試。

So I would expect that that discussion really ramps up in this coming year and over the next 5 years as everybody is forced to comply with the 4 parts per trillion. But I wouldn't say that it was a major theme at this point in what we're -- in our current discussions with the municipal transaction we have today.

因此，我預計這種討論在未來一年和未來 5 年會真正升溫，因為每個人都被迫遵守萬億分之四的要求。但我不會說這是我們目前與市政交易的討論中的一個主要主題。

I think your second question, Davis, was around what does the $45 million includes capital for acquisitions? And we don't typically -- until we close those that wouldn't be in our calculation. Dan?

戴維斯，我想你的第二個問題是 4500 萬美元包括哪些收購資金？我們通常不會這樣做——直到我們關閉那些不在我們計算中的項目。擔？

Yes. That's correct. And Davis, if you look at the acquisitions that we have pending to flows, they are more biased towards wastewater acquisitions rather than water. And I don't believe at this point that there's PFAS in the water acquisition or 2 that are in that list. But in any event, we think that it's -- we think of the $450 million or as we've said, at least $450 million, it wouldn't be a material change on that if we have a few more studies.

是的。這是正確的。戴維斯，如果你看看我們懸而未決的收購，他們更傾向於廢水收購，而不是水收購。目前我不相信水採購中含有 PFAS，也不相信清單中包含 2 個 PFAS。但無論如何，我們認為，我們認為 4.5 億美元，或者正如我們所說，至少 4.5 億美元，如果我們進行更多研究，這不會是重大變化。

Got it. That makes sense. That's helpful. And maybe one other question. This might be a bit hypothetical. So I guess just asking as to weather normalization and what you've applied for in the pending gas case, do you have any estimates or any commentary or any thoughts maybe as what a normal season would have been for this past quarter or what the impact would have been had you been given this weather normalization clause that you guys have applied for?

知道了。這就說得通了。這很有幫助。也許還有另一個問題。這可能有點假設。因此，我想只是詢問天氣正常化以及您在未決的天然氣案件中申請的內容，您有任何估計或任何評論或任何想法，也許是上個季度的正常季節或影響是什麼如果你們申請了天氣正常化條款，你們會怎樣？

I guess, the way I'd characterize that is if you think of the $20 million net revenue shortfall that I mentioned, that would be inside, call it, a $5 million impact, if we had weather normalization kind of depending where that weather normalization comes out exactly. But it would -- as you can see, it would materially reduce the volatility that we see in the year like we had last year or this year in terms of downside, but also in a very cold year, it would have the impact of keeping customer bills at a more normalized level as well.

我想，我的描述方式是，如果你想到我提到的2000 萬美元的淨收入缺口，那將是內部的，稱之為500 萬美元的影響，如果我們的天氣正常化有點取決於天氣正常化的位置準確地出來。但正如你所看到的，它將大大減少我們今年看到的波動性，就像我們去年或今年的下行趨勢一樣，而且在非常寒冷的一年裡，它也會產生影響客戶賬單也處於更加標準化的水平。

Our next question will be coming from Travis Miller calling from Morningstar.

我們的下一個問題將來自晨星公司的 Travis Miller 的電話。

A couple of follow-ups to some of the things you mentioned in the prepared remarks. One is the supply chain, I thought that was an interesting comment there and thought process there. In terms of are there raw materials or equipment or something that you see constrained right now or you would anticipate could be constrained to your point about the short time period here -- relative short-term period?

對您在準備好的評論中提到的一些事情進行一些後續行動。一是供應鏈，我認為這是一個有趣的評論和思考過程。就您目前認為受到限制的原材料或設備或其他東西而言，或者您預計可能會受到您關於短期內（相對短期）的觀點的限制？

Yes, we think about tanks, right, each of them the-- by the way, most of our systems where we're doing mitigation are small systems. We do have some large ones -- but a lot of them -- the vast majority of them are small systems. When you think about 2 different tanks. So those tanks have to be fabricated, purchased and fabricated and (inaudible) and we did think about two times all of the systems that we have to implement, which are hundreds.

是的，我們想到了坦克，對吧，每個坦克——順便說一句，我們進行緩解措施的大多數系統都是小型系統。我們確實有一些大型系統，但數量很多，其中絕大多數都是小型系統。當你想到兩種不同的坦克車。因此，這些坦克必須被製造、購買和製造（聽不清楚），我們確實考慮了我們必須實施的所有系統的兩倍，即數百個。

And then the carbon material is also something that would be ongoing, essentially because that would have to be replaced or regenerated. But we think about those materials. We -- there could be some constraints on the ability to deliver. That's why I say over a 5-year period, spreading it out, it's going to be a lot more palatable people because if we try to squeeze that into 3 years, it's really tough.

然後碳材料也將是持續存在的，主要是因為它必須被替換或再生。但我們會考慮這些材料。我們——交付能力可能會受到一些限制。這就是為什麼我說在5年的時間內，將其分散開來，將會有更多的人接受，因為如果我們試圖將其壓縮到3年之內，那真的很難。

We're out there. We're already doing mass purchases to get ready. So that's not going to be a challenge for us necessarily, but it could be for others. Let's remember that EPA significantly underestimated the impact of this rule. And so the rush on some of these materials is going to be much more significant than I think was initially anticipated by EPA.

我們就在外面。我們已經在進行大規模採購以做好準備。因此，這對我們來說不一定是一個挑戰，但對其他人來說可能是一個挑戰。讓我們記住，美國環保署大大低估了這項規則的影響。因此，對其中一些材料的搶購將比我認為美國環保署最初預期的要重要得多。

Okay. Makes sense. And then just a real quick follow-up. The tanks that you mentioned, if -- you obviously are doing a lot of the PFAS stuff already. Can you use the tanks you're using already? Or are those unique tanks that you would have to replace or don't have. Does that make sense?

好的。說得通。然後就是一個真正的快速跟進。你提到的儲罐，如果——你顯然已經在做很多 PFAS 的事情了。您可以使用已經使用的水箱嗎？或者是那些您必須更換或沒有的獨特坦克。那有意義嗎？

Yes. Yes, it makes sense. These would be brand new added to the site of each of these sources, right? And so the 2 tanks would be -- could be in a building or outside of a building, but they would be brand new to the process at each site.

是的。是的，這是有道理的。這些將是全新添加到每個來源的網站中的，對吧？因此，這兩個儲罐可能位於建築物內或建築物外，但它們對於每個地點的流程來說都是全新的。

Okay. That makes sense. And then one other to the hottest topic in the sector right now to data centers. Any impact there, either -- or even large manufacturers for the gas business, large factories. Anything there that would be upside?

好的。這就說得通了。然後再談一談目前該領域最熱門的話題——資料中心。在那裡的任何影響，甚至是天然氣業務的大型製造商、大型工廠。有什麼好處嗎？

Yes, Mike is here, and there's none that I'm aware of that would be materially impacting gas. But Mike, anything you're seeing? .

是的，麥克在這裡，據我所知，這不會對天然氣產生重大影響。但是麥克，你看到了什麼嗎？ 。

I think it's a great question. And I will say that locally within our service territory, there are project developers that are looking for opportunities that include sites with connection to the grid, customers that may even want to take power offline and the value of being located with vast pipelines, all as ample and low-cost natural gas is driving that opportunity.

我認為這是一個很好的問題。我要說的是，在我們的服務區域內，有一些專案開發商正在尋找機會，包括與電網連接的地點、甚至可能希望斷電的客戶以及位於擁有龐大管道的價值，所有這些都是因為充足且低成本的天然氣正在推動這項機會。

And anything on the water side, we fear that the data centers are water intensive. Anything that would be relevant there?

對於水方面的任何事情，我們擔心資料中心都是水密集型的。有什麼相關的嗎？

Yes. No, it's a good question. And I'll tell you what, Ohio has been really successful at attracting some of these facilities, not only data centers, but also chip manufacturing and also general manufacturing. They've really done a beautiful job there. And we would like to participate in that. And so we are engaging in Ohio.

是的。不，這是一個好問題。我會告訴你，俄亥俄州在吸引其中一些設施方面非常成功，不僅是資料中心，還有晶片製造和通用製造。他們在那裡確實做得非常出色。我們願意參與其中。所以我們正在俄亥俄州開展工作。

And of course, there's a lot happening in Texas as well. That, Travis, isn't necessarily the plant itself. But then the housing that comes along with a new manufacturing plant because of the employee base that's added. And so we're seeing that kind of growth, particularly in Texas. And so that would be more the nature of our participation on the water side, not necessarily the plant itself, but the follow-on housing.

當然，德州也發生了很多事情。崔維斯，那不一定是植物本身。但由於員工基礎的增加，住房與新的製造工廠一起出現。所以我們看到了這種增長，特別是在德克薩斯州。因此，這將更多是我們在水方面參與的本質，不一定是工廠本身，而是後續的住房。

We'll now be moving to Jonathan Reeder calling from Wells Fargo.

我們現在將接聽來自富國銀行的喬納森·里德 (Jonathan Reeder) 的電話。

I was hoping to just get a little more clarity on the guidance exactly. So excluding the $0.24 gain on sale, do you expect to be able to deliver the full year '24 EPS within that $1.96 to $2 range? In other words, can you offset the $0.05 weather headwind in Q1?

我希望能夠更清楚地了解該指南。因此，排除 0.24 美元的銷售收益，您是否期望能夠在 1.96 美元至 2 美元的範圍內實現 24 年全年每股收益？換句話說，你能抵銷第一季 0.05 美元的天氣逆風嗎？

Jon, I think we'd say that that's a difficult challenge at this point given that the $0.05 weather impact in the first quarter.

Jon，我想我們會說，考慮到第一季 0.05 美元的天氣影響，這是一個艱鉅的挑戰。

I think the math Dan took you through is pretty clear. What we can't predict as we had in, I guess, 2022, Jonathan is a blockbuster decent November, December in natural gas, which could make up. But we try to predict and guide based on normal weather. And that's why when we add in the weather normalization, it makes it a much easier prediction. We would not have anticipated, especially 2 years in a row to have the weather impact that we just saw in 2023 Q1 and 2024 Q1. So, again I think Dan's math took you through how we think about that on an impact given what we saw in the first quarter.

我認為 Dan 跟你講的數學很清楚。我們無法預測的事情，我想，2022 年，喬納森將在 11 月、12 月天然氣領域表現出色，這可以彌補。但我們嘗試根據正常天氣進行預測和指導。這就是為什麼當我們添加天氣標準化後，預測會變得更加容易。我們沒有預料到，尤其是連續兩年會出現我們剛剛在 2023 年第一季和 2024 年第一季看到的天氣影響。因此，我再次認為丹的數學讓您了解了我們如何考慮第一季所看到的影響。

Yes. For some reason, I was thinking the impact on Q1 '23 was even larger, like closer to $0.08. So when I saw -- or when I heard you guys say $0.05, it sounds like, okay, maybe that was something that could be a little more manageable? Or like you said, maybe you get some favorable weather, whether it's at the water business over the summer or the gas business in Q4 that helps kind of balance things out. So...

是的。出於某種原因，我認為對 23 年第一季的影響更大，例如接近 0.08 美元。所以當我看到——或者當我聽到你們說 0.05 美元時，聽起來好像是，好吧，也許這是更容易管理的東西？或者就像你說的，也許你會遇到一些有利的天氣，無論是夏季的水務業務還是第四季度的天然氣業務，這都有助於平衡事情。所以...

Yes. Jonathan, I might add that last year, there was a significant impact in the first quarter. But by this point, we also had a few positives that we were already -- had already experienced in the year or were seeing ahead of us. So we already had that New Jersey contract fee reversal that we talked about in the first quarter last year. We had a Texas water passthrough that you've heard us talk about. We had some things that were cleaned up from our SAP implementation, where we had some capitalization of 2022 expenses in the first quarter of 2023, which were beneficial.

是的。喬納森，我可能會補充一點，去年第一季產生了重大影響。但到目前為止，我們也有一些我們已經在這一年中經歷過或預見的正面因素。因此，我們已經在去年第一季談到了新澤西州合約費的逆轉。我們有一個德克薩斯州的水通道，您已經聽過我們談論過。我們從 SAP 實施中清理了一些東西，我們在 2023 年第一季對 2022 年費用進行了一些資本化，這是有益的。

And then at this point when we had the call, we knew we had a relatively chilly April. So we had -- we're in a little bit different situation. And then ultimately, we saw the Natural Gas safe harbor come through, which was beneficial as well last year, in terms of getting back on track and inside that guidance range. I think this year, we're a little bit more susceptible to the weather impact. As you know, we'll do everything we can to claw back pennies and focus on our operating model in order to do that. But just in transparency that here today, it's just a little bit harder than it was last year.

當我們接到電話時，我們知道四月相對寒冷。所以我們的情況有點不同。最終，我們看到了天然氣安全港的實現，這在去年也是有益的，因為我們回到了正軌並處於指導範圍內。我認為今年我們更容易受到天氣的影響。如您所知，我們將盡一切努力收回成本並專注於我們的營運模式，以實現這一目標。但就透明度而言，今天這裡的情況比去年困難一些。

Got you. No, I appreciate that additional clarity there. Maybe trying to ask Durgesh's one question a little differently. Can you talk about the prospects of reaching a settlement in the Peoples Gas case, as well as just more broadly the challenges or inability on the water side for you and now it appears Pennsylvania American to reach settlement in the cases because historically, settlement seem to be the norm in Pennsylvania?

明白你了。不，我很欣賞那裡的額外清晰度。也許嘗試以一種稍微不同的方式問杜爾格甚的一個問題。您能否談談在人民天然氣案中達成和解的前景，以及更廣泛地講，您在水方面面臨的挑戰或無能為力，現在賓夕法尼亞美國人似乎在這些案件中達成和解，因為從歷史上看，和解似乎是賓州的常態嗎？

Listen, I can't give you any details because for obvious reasons. But I think it's often about the healthy exchange between the parties. And we're not going to agree on everything. That's why I called it a settlement. I would -- I'll just leave it at this, Jonathan, it is a constructive discussion that's taking place right now. And I can't predict whether we're going to have a settlement or we'll litigate it. It's a constructive discussion.

聽著，由於顯而易見的原因，我無法向您提供任何細節。但我認為這往往與各方之間的健康交流有關。我們不會在所有事情上都達成一致。這就是為什麼我稱之為和解。我會——喬納森，我就到此為止，這是一場正在發生的建設性討論。我無法預測我們是否會達成和解或提起訴訟。這是一次建設性的討論。

Got you. Okay. So I mean you don't think it's like -- there's anything more broadly in the Pennsylvania regulatory construct or regulatory environment that's, I guess, leaning parties not to settle anymore?

明白你了。好的。所以我的意思是，你不認為——在賓州的監管結構或監管環境中，有什麼更廣泛的東西，我猜，傾向於各方不再和解？

I do not.

我不。

Okay, and then I know you said you expect the commission will vote shortly on the final revisions to the fair market value framework. Do you have any insight regarding the potential like significance of any changes from Chair De Frank's original proposal? And then are you still of the opinion that the only changes to the proposal will be from the commission and not legislatively?

好的，然後我知道您說過您希望委員會很快就公平市場價值框架的最終修訂進行投票。對於德弗蘭克主席最初提案的任何變化的潛在意義，您有什麼見解嗎？那麼您是否仍然認為對該提案的唯一修改將來自委員會而不是立法？

So let me answer it too separately. There was over 30 commenters, right? A lot of comments about Chairman C-motion. And I know that they are carefully considering all of those comments and we'll think about how they might impact but -- and those are all public, right? So we're able to see those.

那我也單獨回答吧。有超過30個評論者，對嗎？關於主席 C 動議的評論很多。我知道他們正在仔細考慮所有這些評論，我們會考慮它們可能產生的影響，但是——這些都是公開的，對吧？所以我們能夠看到這些。

I wouldn't say there's anything new in those comments from what we've seen and heard in the C-motion. So all those opinions, I think there are no surprises there, let's say that. And so I would be hopeful that the Chairman would be pretty close to his view initially. But there's 5 votes and 5 opinions up there. So we'll have to see what that looks like as they kind of push through.

從我們在 C 議案中看到和聽到的內容來看，我不會說這些評論有什麼新內容。所以所有這些觀點，我認為沒有什麼令人驚訝的，這麼說吧。因此，我希望主席最初能夠非常接近他的觀點。但上面有 5 票和 5 個意見。所以我們必須看看他們的推進會是什麼樣子。

Now the second part of the question about legislation. No, I think there is a series of placement moved through the House of Representatives on the committee level and those are on the floor. And there is an ongoing discussion with the leadership in the House of Representatives about what might we accomplish because the bills that were released from Committee are not things that we would want to see passed and we understand that they would probably not be successful in the Senate.

現在是關於立法問題的第二部分。不，我認為眾議院在委員會層面上進行了一系列的安排，這些安排都在會議上。目前正在與眾議院領導層討論我們可以實現什麼目標，因為委員會發布的法案不是我們希望看到通過的法案，而且我們知道它們可能不會在參議院獲得成功。

However, if there was some compromised language that could be recent -- would be similar to Chair De Frank's motion at the commission, I think there's real possibilities there. And that discussion in the House of Representatives is ongoing. And I think there's a lot of stakeholders that are involved. So we're -- and we're participating. But I would hope that it would come out similar to the motion in the commission, and this would really give us all a clear path as to how this is going to work moving forward.

然而，如果有一些妥協的語言可能是最近出現的——類似於德弗蘭克主席在委員會的動議，我認為那裡確實存在可能性。眾議院的討論正在進行中。我認為有很多利害關係人參與其中。所以我們正在參與。但我希望它的結果與委員會的動議類似，這確實會給我們所有人一個關於如何向前推進的明確道路。

Okay. No, that's really helpful to know that, yes, like if something -- you think if something comes out of the legislature, it's not, I guess, in the current like kind of penal form or like removing Act 12 and the draconian kind of stuff. It's how do we tweak fair market value to still promote the consolidation of the fragmented industry and everything like that.

好的。 No, that's really helpful to know that, yes, like if something -- you think if something comes out of the legislature, it's not, I guess, in the current like kind of penal form or like removing Act 12 and the draconian kind of東西.這就是我們如何調整公平市場價值，以仍然促進分散產業的整合以及類似的事情。

That's right. I'm told that in the Senate, there's not an appetite for repeal that they believe that municipal leadership, as sector officials, have the right to transact if that's what their decision is. And so -- and that's been made pretty clear about the Senate. So I think if there's a compromised language, we could all work together. If not, I don't think much will happen at all, at the legislative side.

這是正確的。我被告知，參議院沒有廢除該法案的興趣，他們認為，市領導層作為部門官員，有權進行交易，如果這是他們的決定的話。所以——參議院已經說得很清楚了。所以我認為如果有一種妥協的語言，我們就可以一起工作。如果沒有，我認為在立法方面根本不會發生太多事情。

Great. That's excellent color. Good luck with the fair market value, good luck with the rate case. And then you said on the water side, you're going to be filing, I think, next week for the new water rate case in PA, is that right?

偉大的。那是極好的顏色。祝公平市場價值好運，並祝利率案好運。然後你說在水方面，我想你將在下週提交賓州新的水費案件，對嗎？

Later in the month of May, the third full week in May.

五月晚些時候，五月的第三個完整週。

Third full week. Got you. I missed that little one.

第三個完整週。明白你了。我很想念那個小傢伙。

We'll now move to Ryan Connors calling from Northcoast Research.

我們現在將接聽來自北海岸研究中心的瑞安康納斯 (Ryan Connors) 的電話。

So yes, I actually had a couple of big picture questions. One came to mind as you were discussing the PFAS kind of potential bottlenecks in equipment purchasing and that sort of thing, and you're talking about making mass purchases, been on some of the earnings calls for these vendors of this equipment lately, and it's a real gravy train. They're talking about not giving back any of the pricing that they took the last few years and continuing to raise prices above and beyond inflation. And so it kind of comes to mind that that's all happening at the same time, your industry is seeing greater concern about affordability.

所以，是的，我實際上有幾個大問題。當您討論設備採購中的 PFAS 潛在瓶頸之類的問題時，您想到了一個問題，並且您正在談論大規模採購，最近參加了這些設備供應商的一些收益電話會議，這是真正的肉汁列車。他們正在談論不歸還過去幾年的任何定價，並繼續將價格提高到高於通貨膨脹的水平。因此，我想到這一切都是同時發生的，您所在的行業越來越關注可負擔性。

And if not yourselves, at least some seeing some real pushback on rate cases and that sort of thing. I mean, are you -- are the water utilities going to just kind of get squeezed in between the manufacturers and the rate payers here? Or is there some -- at what point does the pushback on the pricing of the equipment, or what construct is in the regulatory framework for -- to account for sort of price gouging, or just curious what your thoughts are on that. It seems like you're caught in the middle there.

如果不是你們自己，至少有些人看到了利率案件和諸如此類的事情受到了一些真正的阻力。我的意思是，自來水公司是否會被夾在製造商和納稅人之間？或者是否有一些——設備定價在什麼時候受到阻礙，或者監管框架中有什麼結構——來解釋某種價格欺詐行為，或者只是好奇你對此有何想法。看來你被夾在中間了。

Yes. To some extent, you're right. Although I'll give Dan -- Dan has been purchasing them and the procurement is under Dan's purview at the company, given a lot of credit, they've already been out there in the market, negotiating some of these things. So maybe, Dan, do you want to talk a little bit about our success there.

是的。在某種程度上，你是對的。雖然我會給丹——丹一直在採購它們，而且採購是在丹在公司的職權範圍內的，考慮到很多信用，他們已經在市場上，就其中一些事情進行談判。丹，也許你想談談我們在那裡的成功。

Yes. So we think about this, there are a couple of different scales here. So we've got small systems in states like North Carolina and in areas like Western Pennsylvania, where we've got relatively small to -- we're going to put in, think 3-foot diameter canisters, we would look to buy those in mass across the need there, which is -- as Chris said, we've got hundreds of these to do. You've got 2 tanks per installation, you have 2 vessels.

是的。所以我們考慮一下，這裡有幾個不同的尺度。因此，我們在北卡羅來納州等州和賓夕法尼亞州西部等地區擁有小型系統，在那裡我們的系統相對較小，我們將安裝直徑為 3 英尺的罐子，我們會考慮購買這些罐子。 ，我們有數百個這樣的事情要做。每個裝置有 2 個坦克，有 2 艘船。

So it is a lot of vessels, Ryan, as we think about it. So we'll go out with bids that are for packages of those, if you will, not all at once obviously, but with enough volume to drive volume-based discounts, buying a lot of the same-sized vessels with multiple suppliers.

所以瑞安，我們認為有很多船。因此，如果您願意的話，我們將針對這些船舶進行打包投標，顯然不是一次全部投標，而是有足夠的數量來推動基於數量的折扣，與多個供應商購買大量相同尺寸的船舶。

Now 2 is something that's been discussed in the space is for those things that are funded by the federal government in some way, we're getting a grant or a loan, we have to use American-made products. Look we don't have to use that everywhere. And I think the municipal and investor in utilities will all realize that they've got to go a little more broadly in terms of finding supply here. And to hold price down, we need to go to offshore manufacturers of these types of vessels that will do that.

現在2是該領域討論的事情是那些由聯邦政府以某種方式資助的事情，我們獲得贈款或貸款，我們必須使用美國製造的產品。看起來我們不必到處都使用它。我認為市政當局和公用事業投資者都會意識到，他們必須更廣泛地在這裡尋找供應。為了壓低價格，我們需要去找這類船舶的離岸製造商來做到這一點。

So I think we've got those small vessels, we've got larger vessels, so think kind of 12-foot diameter. Again, these are things that are fairly standard. There are multiple manufacturers of those. We'll look for multiple bids and go with the best price. I mean that's really our objective here is to always put in the appropriate equipment at the appropriate price for the protection of our customers.

所以我認為我們有那些小血管，我們有更大的血管，所以想想直徑 12 英尺。同樣，這些都是相當標準的事情。這些產品有多個製造商。我們會尋找多個出價並給出最優惠的價格。我的意思是，我們的真正目標是始終以適當的價格配備適當的設備，以保護我們的客戶。

Yes, capitalize on our economies of scale and we're obviously going to be a big player in the purchases. And I do think, Ryan, we're so much susceptible would be on the resin or on the carbon because it's going to be ongoing purchases. But we're hopeful that we can negotiate fair pricing.

是的，利用我們的規模經濟，我們顯然將成為採購中的重要參與者。我確實認為，瑞安，我們非常容易受到樹脂或碳的影響，因為這將是持續的購買。但我們希望能夠協商出公平的定價。

Okay. No, I appreciate all the detail there. My other one was, Chris, you mentioned -- so as this reform process plays out for Act 12, you mentioned that potential sellers have been kind of standing still. And I'm a little surprised, and I'm curious why it wouldn't be the opposite. Why if I'm a city and I feel like there's going to be a cap put on valuations, why I wouldn't be rushing to sort of get my APA signed before that happens? Because presumably, there'll be some grandfathering in of deals that have been signed. So can you discuss like why is that not the case? Why is there not sort of a rush to get things done and sit on your hands and wait for a cap to be put in from a seller standpoint? Doesn't seem to make sense.

好的。不，我很欣賞那裡的所有細節。我的另一個問題是，克里斯，你提到過，當這項改革進程在第 12 號法案中展開時，你提到潛在的賣家一直處於停滯狀態。我有點驚訝，我很好奇為什麼情況不會相反。如果我是一個城市，我覺得估值會有上限，為什麼我不會急於在那之前簽署我的 APA？因為大概已經簽署的交易中會有一些祖父條款。那麼你能討論為什麼情況並非如此嗎？從賣家的角度來看，為什麼不急於把事情做好，然後坐等上限出台呢？似乎沒有道理。

I think the reality is, even if there's a grandfathering that's, as you know, part of the language that's out there, just the base reality this year. These things are ending up in court. And so even if it's grandfathered and the commission was okay with it and the consumer advocate then challenges it, as they have in some cases for us and some of our peers, we end up in tie-up in court. And we want -- I think we're tired of it. Investors are tired up. We want to get deals that we can transact can actually close. And so that's the important work with the C-motion. And it's the clarity of how do we get to close, what is affirmative public benefit and what's not challengeable in court. And I just think that as municipals look at it, and we do too, at this point. If we think that even if they're grandfathered, probably they're going to end up -- tied up in court and then appealed in court and everything else, we can take a little bit of a wait-and-see attitude.

我認為現實是，即使存在祖父條款，正如你所知，這是現有語言的一部分，但這只是今年的基本現實。這些事情最終都會告上法庭。因此，即使它是祖父的，委員會同意它，然後消費者權益倡導者提出挑戰，就像他們在我們和我們的一些同行的某些案件中所做的那樣，我們最終會在法庭上陷入僵局。我們想要──我想我們已經厭倦了。投資者已經累了。我們希望達成能夠真正完成的交易。這就是 C-motion 的重要工作。關鍵是要明確我們如何達成交易，什麼是積極的公共利益，什麼是在法庭上不可質疑的。我只是認為市政當局正在考慮這個問題，我們現在也是這樣做的。如果我們認為，即使他們得到了祖父的照顧，他們可能最終也會被綁在法庭上，然後在法庭上上訴以及其他一切，我們可以採取一點觀望的態度。

Yes. No, that's a great point. It makes total sense when you put it that way. Yes. And then lastly, just on the PFAS thing, I remember you talked about treatment or testing rather and the fact that that's -- not all these systems have been tested I remember visiting the Bryn Mawr, the brand-new Bryn Mawr kind of labs when it was constructed, I guess, a few years ago. And one of the things that Huwar talked about was how that facility can do testing for not only for your own stuff but for municipalities and so forth. I mean, is that going to be a commercial opportunity that would be meaningful if a lot of these systems just have to get samples tested? Or is that just kind of immaterial?

是的。不，這是一個很好的觀點。當你這樣說時，這是完全合理的。是的。最後，就 PFAS 問題而言，我記得您談到了治療或測試，事實上，並非所有這些系統都經過了測試，我記得參觀了 Bryn Mawr，全新的 Bryn Mawr 實驗室我猜它是幾年前建造的。胡瓦爾談到的一件事是該設施如何不僅可以為您自己的東西進行測試，還可以為市政當局等進行測試。我的意思是，如果這些系統中的許多系統只需要進行樣品測試，這是否會成為一個有意義的商業機會？或者這只是一種無關緊要的事情？

Yes. I mean, you raised a very good point. We are still the only state certified utility lab that does PFAS in the State of Pennsylvania now. So there is opportunity there. Now having said that, we want to get ourselves situated where we are in a position that we're in full compliance within the 5-year period. So there's substantial testing running through the lab before we would add another call shift, we would want to exploit opportunity a little bit. But I'm not saying that we're not, Ryan. I'm just saying that at this point, we're really focused on full compliance at Essential Utilities and then we'll look for opportunities beyond. But you're thinking about it the right way.

是的。我的意思是，你提出了一個非常好的觀點。目前，我們仍然是賓州唯一進行 PFAS 檢測的國家認證實用實驗室。所以那裡有機會。話雖如此，我們希望能夠在 5 年內完全遵守規定。因此，在我們添加另一個呼叫班次之前，需要在實驗室中進行大量測試，我們希望能夠利用一點機會。但我並不是說我們不是，瑞安。我只是說，目前我們真正關注的是 Essential Utilities 的完全合規性，然後我們將尋找其他機會。但你的思考方式是正確的。

(Operator Instructions) We'll now move to Gregg Orrill calling from UBS.

（操作員說明）現在我們將接聽瑞銀 (UBS) 的 Gregg Orrill 電話。

Do you have anything to report on the DELCORA purchase agreement?

您對 DELCORA 採購協議有什麼要報告的嗎？

Gregg, we couldn't go on one call without DELCORA question. I'm kidding, of course, but yes, we -- I guess one bit of good news, I guess you can position it as good news. So we were due to be in court on May 8 to -- and this was in a commonwealth not State Court. And then we're going to hear the argument from the county, which essentially is appealing the decision of the lower County Court that said that the asset purchase agreement is valid and enforceable.

Gregg，我們無法在沒有 DELCORA 問題的情況下進行一次通話。當然，我是在開玩笑，但是，是的，我們——我想有一點好消息，我想你可以把它定位為好消息。所以我們原定於 5 月 8 日出庭——這是在聯邦法院而不是州法院。然後我們將聽取該縣的論點，該論點實質上是對下級縣法院的裁決提出上訴，該裁決稱資產購買協議有效且可執行。

And so that oral argument was canceled, and the judges said that they were going to make the decision based on final briefs. Now typically, that's good news. We won't know until the decision is out. But I think the aspect of timing actually is probably helpful here too because as we're told, often the judge's decision comes a little bit more quickly when they're not digesting oral arguments and they're just focused on the briefs that have already been filed because obviously, they've read them already. And so we take that as a little bit of vote there in optimism. That would be a nice addition.

因此口頭辯論被取消，法官們表示他們將根據最終的陳述做出決定。現在通常來說，這是個好消息。在決定出來之前我們不會知道。但我認為時間安排實際上在這裡也可能很有幫助，因為正如我們所知，當法官不消化口頭辯論並且只關注已經發表的摘要時，他們的決定通常會更快一些。他們已經閱讀過它們。因此，我們認為這是樂觀的一點投票。這將是一個很好的補充。

In Delaware County, they -- where this DELCORA exists, they raised taxes last year and there was talk about raising taxes again this year. We've taken that as an opportunity to reengage with the elected officials in the county and just to remind them that there are significant proceeds associated with closing this transaction. And might they consider reengaging on a settlement discussion and then letting the need for a tax increase go.

在特拉華縣，他們——DELCORA所在的地方，去年提高了稅收，並且有討論今年再次提高稅收。我們以此為契機，與縣內民選官員重新接觸，只是提醒他們，完成這筆交易會帶來可觀的收益。他們是否會考慮重新進行和解討論，然後放棄加稅的需要。

So I would say that that discussion is ongoing. So always something happening on DELCORA, but remember that the key gating factor here is we have a stay on the process by a Federal Bankruptcy Court Judge that is not associated with the transaction itself, but the bankruptcy of the City of Chester where some of the assets of DELCORA lie. So we're still waiting for action on that, but we continue activity in the background.

所以我想說，討論正在進行中。因此，DELCORA 上總是會發生一些事情，但請記住，這裡的關鍵控制因素是聯邦破產法院法官暫停了該程序，該法官與交易本身無關，但與切斯特市的破產有關，其中一些DELCORA 的資產是謊言。因此，我們仍在等待對此採取行動，但我們會繼續在後台進行活動。

Ladies and gentlemen, we don't appear to have any further questions. I'd like to turn the call back over to Mr. Chris Franklin for any additional or closing remarks. Thank you.

女士們先生們，我們似乎沒有其他問題了。我想將電話轉回給克里斯·富蘭克林先生，請他發表補充或結束語。謝謝。

All right. Thanks, folks, for joining us. And as always, Brian, Dan and the team stand ready to answer your follow-up questions should you have any. Thanks for joining us today, and have a great weekend.

好的。謝謝大家加入我們。像往常一樣，Brian、Dan 和團隊隨時準備好回答您的後續問題（如果您有任何問題）。感謝您今天加入我們，祝您週末愉快。

Ladies and gentlemen, that will conclude today's presentation. Thank you for your attendance. You may now disconnect. Have a good day, and goodbye.

女士們、先生們，今天的演講到此結束。感謝您的出席。您現在可以斷開連線。祝你有美好的一天，再見。