WTRG - NYSE

Thank you for standing by, and welcome to the Essential Utilities First Quarter 2025 Earnings Conference All lines have been placed on mute to prevent any background noise. After todays’ presentation, there will be an opportunity to ask question. [Operator Instructions] It is my pleasure to turn the call over to Mr. Brian Dingerdissen. You may begin.

Thank you. Good morning, everyone, and thank you for joining us for our first quarter 2025 earnings call. If you did not receive a copy of the press release, you can find it on our Investor Relations website. The slides will also be found there as well via a webcast of the event. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risks, 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. We will begin the call with Chris Franklin, our Chairman and CEO, who will provide an update on the Company. Then Mike Huwar, the President of our Gas business, will provide an update on the gas business. And then Dan Schuller, our Chief Financial Officer, will provide an overview of the financial results before Chris closes the call and open it up for questions. With that, I will turn it over to Chris Franklin.

Thanks, Brian, and good morning, everyone. Thank you for joining us today, and let's begin on Slide 5 with some highlights. First, we posted strong results this quarter, $3 GAAP earnings per share, a 6% increase over last year's quarter results. Both our water and gas businesses performed well as expected. You'll hear more about our gas business from Mike Huwar in just a few moments, as Brian mentioned. With those first quarter results, we are reaffirming our 2025 earnings per share guidance range of $2.07 to $2.11 and versus last year's earnings of $1.97 per share on a non-GAAP basis. Dan will provide a quarter-by-quarter view of our 2025 earnings expectations in just a few moments. We are also reaffirming our plans to invest between $1.4 billion and $1.5 billion in infrastructure investments in 2025. Through March 31, we've already invested $270.5 million in infrastructure improvements across our footprint. Now, we previously announced to support our growth and meet our credit metrics we have begun to raise equity through our ATM program. So far this year, we've issued approximately $210 million throughout the year. We'll look at the market conditions here price for opportunities to continue using our ATM. It's always important to mention that our achievements go far beyond the financial results. Some of the things of which we are most proud are our operational achievements. Our water quality compliance results continue to be industry-leading at a 99.8% compliance rate, meeting state and federal regulations over the last 12 months. Our PFOS work continues to be on time and on budget. We will be fully compliant with the four parts per trillion MCL by 2028, and we remain on target to meet the $450 million in capital spend rate to achieve that compliance. Now importantly for our customers, we expect to receive approximately $100 million in proceeds from the settlements from the polluters and for Aqua Pennsylvania, we've already received approximately $10 million in low interest loans and grants from the government and are also on track in Pennsylvania to receive approximately $59 million in grants or loans after all the applications have been approved. We also continue to see strong operating results in the natural gas company, and Mike will fill us in, in a few moments on that work. Environmental stewardship is a key element of our work and it's why we were so proud to learn that for the third year in a row, we were named to USA TODAY's list of climate leaders, a great honor for us and a nice recognition of our continued commitment to protecting and providing essential resources for life. Now as we think about our successes, I have to mention that our work in the Texas legislature to pass future test year legislation is showing positive signs. Just last week, the Texas House of Representatives, overwhelmingly passed the future test year bill, and now it's off to the Senate for consideration in that chamber. We'll keep you posted as developments occur and you may recall that our rate cases in Ohio have been taking an extended period of time over the last few cycles at the PUCO. In the last couple of weeks, though, legislation was passed by both the House and Senate in Ohio that sets deadlines for rate cases. After the governor signs the legislation, there will be new statutory time lines associated with rate cases in Ohio. We see this as a really positive development. Also in Virginia, legislation was passed to expand the water and wastewater infrastructure surcharge. We are really proud of our work with both regulators and legislators to find opportunities to make vital and sizable capital investments and quickly and efficiently recover that capital so we can put it back to work again. Now Slide 6, hopefully, you recognize our consistent year-after-year growth in earnings and dividends. 2025 is shaping up to be another strong year in this string of success. For many years now, our team has been able to consistently deliver on the guidance that we provided you. Our earnings per share is consistently within a 5% to 7% annual growth rate. And since we started providing annual guidance back in 2016, we have consistently met or exceeded market expectations. That consistent earnings growth has allowed us to continue to build on our over 30-year history of growing our dividend. That dividend growth has averaged about 7% since I became CEO in 2015. Lastly, our financial results are made possible by the excellent execution of our operating team and their commitment to the community where we serve. Since 2015, we have invested nearly $8 billion in capital improvements and have grown rate base at a 15% compounded annual growth rate if you include the purchase of Peoples. I continue to be impressed by what the team has achieved, and our team is incredibly honored to be the current stewards of this great company with this 140-year history. Many of you have told me you enjoy hearing from our segment President. So today, our gas segment President, Mike Huwar is joining us. Mike is going to talk a little bit about some of our achievements and some of our ongoing initiatives. And I'll touch a little bit on the data center activity happening in the region where we serve. Mike?

Thanks, Chris. I'm happy to be here today and appreciate the opportunity to highlight the significant and important work that the team of Peoples Gas are doing. As noted on Slide 8, Peoples is the largest natural gas LDC in Pennsylvania with over 700,000 customers and over $4 billion of rate base as of the end of 2024. Additionally, our gas segment includes our operations in Kentucky, serving over 40,000 customers. 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 as we work to reduce risk and achieve constructive regulatory outcomes. Next, on Slide 9, I wanted to turn to an operational highlight with the Intelis meter program. In Q3 of 2024, Essential implemented a pilot program with the gas division to install and assess the Intelis solid state gas meter. The Intelis meters provide added safety features and increased protection of customers in the communities we serve. The pilot concluded with the installation of over 30,000 Intelis meters in 2024 and in Q1 of this year, 2025. We have moved from the pilot stage to a full implementation plan to install these new meters in all residential and small commercial properties within our service area. The added safety measures associated with these meters include an automatic shutoff if the system were over-pressurized or if there was an uncontrolled flow of natural gas. Additionally, in the event of a fire, the meter has the functionality to shut down automatically. As of now, we are assessing a comprehensive program to install the Intelis meters at nearly 700,000 customer accounts in the coming years. We are extremely bullish on this effort as we work to be among the safest gas utilities in the United States. Moving along to Slide 10. Let me now mention a couple of updates to our gas business, starting with the weather normalization adjustment, which is a mechanism we received in our last people's rate case. As with other utilities across the nation, Peoples Gas also experiences volatility in weather patterns and subsequently impact distribution revenues, beginning October 1, 2024. Peoples received authority to implement a weather normalization adjustment or WNA mechanism to combat volatility and stabilize bills for customers and the Company. Since the inception of the WNA mechanism, actual weather has varied in billing months from greater than 17% colder than normal in January of 2025 to almost 30% warmer than normal in March of 2025. Given the weather volatility, this type of alternative ratemaking mechanism has proven to be valuable for the Company and our customers. The mechanism requires the Company to track weather heating degree days during the billing cycle of each customer when the weather is 3% colder than normal or 3% warmer than normal and adjustment is reflected on the bill. The primary driver of the mechanism has been to moderate the financial impact of volatile weather for customers and the Company. We believe the WNA mechanism is working as intended for all stakeholders. Finally, throughout the nation, there is a great deal of attention focused on the development of data centers and the associated need for electric power. We continue to field inquiries related to on-site power generation and data center development to support artificial intelligence, AI, as of today, we are in discussions with data center developers that represent up to 5 gigawatts of needed power generation in the Pittsburgh region. It's no secret that the vast natural gas resources within the Marcellus and Utica shale formations presents an opportunity of robust and lower-cost power generation within the Peoples Gas footprint and across Pennsylvania. The key message is that our company will support these activities in every way possible as they present new and unique economic development opportunities. Given the projected shortfall of available power generation within PJM, our regional transmission organization, the Company is working with individual customers, data center developers energy producers and natural gas pipelines to support these important development efforts. While it's certainly too early to predict the exact investment needed to develop these projects there are clear benefits to the region in what has been described as a very, very fluid environment surrounding data centers and energy usage. For People's and Essential Utilities, the potential increased load could increase the utilization factor of the distribution system that would help to keep natural gas service affordable for our customers. And with that, I will turn it to Dan for a review of the financials.

Thanks, Mike, and good morning, everyone. Let's begin on Slide 12 with a high-level view of the first quarter results, and then we'll get into the details on the waterfalls. Our quarterly performance was strong with revenues up 28% and O&M flat and earnings per share up 6.2%. You recall that last year's first quarter earnings per share included a $0.24 gain from the sale of the Pittsburgh area energy project. Let's sign into the waterfall slides to further review the drivers of the strong quarter and the comparison to last year. On Slide 13, we have the revenue waterfall for the first quarter. Revenues increased 28% from $612.1 million a year ago to $783.6 million this year. Additional revenues from regulatory recoveries, higher purchased gas costs and higher regulated natural gas segment volumes were the primary revenue drivers. Of the roughly $67 million increase in regulatory recoveries, 2/3 is from gas and 1/3 is from water. Of the higher purchased gas costs, about half is due to volume and half is due to higher commodity prices. The higher gas segment volumes reflect normal weather in this year's first quarter compared to significantly warmer-than-normal weather in the Pittsburgh area last year. The other category includes an $8.5 million increase in our customer assistance surcharge costs, which has a direct offset in O&M. It also reflects a lower tax repair related credit to customers as a result of the PNG rate case and $2 million of weather normalization credits back to our Pennsylvania customers. Next, on Slide 14, the O&M slide, we see flat O&M expenses year-over-year, but there are a few things going on that we should discuss. The main drivers for O&M were increases in customer assistance surcharge costs, which have an equivalent offsetting amount in revenue, increases in employee-related costs and water production expenses. These increases were offset by a decrease in bad debt expense and other expenses. The decrease in bad debt primarily reflects the rate recovery of a regulatory asset tied to increased bad debt during COVID and the other category reflects lower outside services costs and insurance expenses. On the EPS waterfall on Slide 15, we see a $0.17 positive impact from rates and surcharges, an $0.08 increase due to higher volumes of gas, reflecting normal weather this year and a $0.02 pickup due to lower expenses. These increases were offset by lower water volume and other. For the quarter, other includes the prior year $0.24 gain on sale from the Pittsburgh area energy projects, tax-related impact and other items. Turning to Slide 16. This is something we've shown occasionally in the past to provide more insights on how our annual earnings per share breaks out by quarter. We thought it was important to bring this back for those of you that run quarterly models, and we've modified it to more accurately reflect how we expect 2025 to look. In the past, we would have said that the first quarter could move our earnings materially higher or lower depending on the weather. Now that we have a revenue normalization mechanism in Pennsylvania, that volatility will be more muted. For this year, we see that the first quarter actual result was at the high end of the 40% to 50% of annual EPS expected in the first quarter. The recovery of the regulatory asset I mentioned earlier was a portion of this outperformance. In the two middle quarters of the year, heating-related gas sales are normally light due to warm summer temperatures. Thus, we expect 10% to 20% of our annual earnings in each of these two quarters. And as you will recall, the third quarter EPS is generally the lowest of the year. In the fourth quarter should be between 20% and 30% of our earnings as the gas business picks up going into winter. We remain confident in our ability to meet our full year earnings per share guidance range of $2.07 to $2.11. While we're here, I do want to reiterate what Chris said about the equity needs for the year. We're pleased to report that we've already completed approximately 2/3 of our 2025 equity needs. We see this as a significant accomplishment, especially considering the general market volatility that we've experienced so far this year. Next, let's move to Slide 17 to provide an update on regulatory activity. We continue to manage our regulatory activity to maintain safe and reliable service, earn an appropriate return on the capital that we invest and minimize regulatory lag while always considering affordability for our customers. New rates went into effect on February 22 for Aqua Pennsylvania following the Pennsylvania PUC approval of the recent rate case. The rate order allowed a base rate increase designed to increase total annual revenues by $73 million. During the first three months of 2025, we implemented rate increases in Ohio and North Carolina designed to increase total revenues on an annual basis by $5.8 million. Also, during the first three months of 2025, we implemented infrastructure rehabilitation surcharges designed to increase total revenues on an annual basis by $10.8 million in our water and wastewater divisions in Pennsylvania and Ohio and by approximately $0.5 million in our natural gas subsidiary in Kentucky. On April 30, 2025, the Company's regulated water and wastewater subsidiary in North Carolina -- Aqua North Carolina followed an application with the North Carolina Utilities Commission designed to increase rates by $32.9 million in the first year of implementation and then by two incremental approximately $6 million increases in the second and third years, respectively. As a reminder, we began using a multiyear approach in North Carolina three years ago, and we find that, that works well for all of the stakeholders. And with that, I'll turn it back over to Chris. Chris?

All right. Thanks, Dan. Let's move to Slide 19 now. We'll touch briefly on our long-term growth through acquisition strategy that, as you know, focuses on water and wastewater utility acquisitions. In fact, since 2015, we've acquired over $518 million in rate base and more than 129,000 new customers or customer equivalents. Last month, we closed on the acquisition of the Village of Midvale's water system in Ohio, which serves approximately 1,000 customers. We paid approximately $3 million for this relatively small system. And as a reminder, Ohio is our second largest water operation with over 150,000 customers, and we continue to see strong opportunities for regionalization in that state. Now in January, we closed the acquisition of the Greenville wastewater utility assets, which serves approximately 2,300 customers in Greenville, Pennsylvania. We paid approximately $18 million for the system, and just recently, we filed an application with the Pennsylvania Public Utility Commission for the acquisition of the Greenville water system, which we hope to close later this year. Now including Greenville Water as of today, we have five signed purchase agreements for the acquisition of water and wastewater systems in Pennsylvania and Texas that are pending closing and are expected to serve over 210,000 customers or customer equivalents and total approximately $340 million in purchase price. Our $276.5 million agreement to acquire DELCORA, a Pennsylvania sewer authority that serves approximately 198,000 and customer equivalents in the Philadelphia suburbs is included among these signed purchase agreements, but as you know, is not included in our current guidance numbers. And finally, on Slide 20, as usual, we'll close the call by sharing some of our goals and aspirations, both short term and long term. We continue to see a healthy pipeline of opportunities for additional growth both on the water side as well as the gas business. We expect our combined utility rate base will grow at a compounded annual growth rate of 8%. Breaking this down a little bit further, we anticipate our Regulated Water segment rate-based growth at about 6% and our Regulated Natural Gas segment rate base growth to be about 11%. Importantly, we are reaffirming our 5% to 7% multiyear earnings per share guidance through 2027. As I said before, this guidance does include acquisitions, which are expected to close in 2025 and 2026 and excludes DELCORA. Of course, this projection includes the crucial work that we're doing to remediate PFOS across our water systems as well as our work to replace aging natural gas pipes. By the way, our gas pipeline replacement work is expected to continue well beyond the next 10 years. Now, we will continue to maintain a strong balance sheet with a focus on continued improvement in our debt metrics. Why we grow the dividend and we'll keep the payout ratio at the same time at 60% to 65%. So, all in all, we see a bright future for the Company as we continue to invest in our nation's infrastructure and build value for shareholders. Very excited about the future of this company. With that, I'm going to conclude my formal remarks for today, and we'll open up for questions. I'll send it back to the operator.

[Operator Instructions]. Our first question comes from the line of Julien Dumoulin-Smith from Jefferies. Please go ahead.

This is Mark on for Julian. Congrats on a nice quarter. My first question is on equity issuance. We know 2/3 of the equity needs have been completed so far. Just given recent share price strength. Are you considering completing the remaining roughly $100 million equity ahead of second quarter? And maybe any thoughts on perhaps pulling forward a portion of 26 equity needs?

Yes. I appreciate the question. And I think for the time being, our focus is really getting the $315 million in equity raised here in 2025 rather than really thinking about the 2026 equity. But -- as you know, we've got a relatively strong share price. So, when we can, we'll be in the market issuing shares in a way that doesn't dramatically impact the share price.

Got it. That's very clear. And maybe if I can just pivot a little bit on the Texas rate case, I know as you're gearing up for your first Texas filings in roughly 20 years and just what level of revenue increase ROE and equity ratio are you targeting? I guess, how should we set expectations around the case in outcome? I know you mentioned some positive dynamics earlier in terms of future rate case -- future test year. Just any color on that front would be helpful.

Yes. So, with that rate case, we haven't filed it yet. We're looking to file it at the end of this month. That's our target at this point. You'll see when we file that, you'll see what that revenue ask is and also equity layer and ROE. But as an equity layer and ROE, we expect to see something consistent with what we asked for in our other states.

And I would say just to add to that, we work very hard to build a reputation in all the states where we operate with strong operating results, try to be very, very accommodating to regulators when they need to do things. And we've done the same thing in Texas. Now anytime you come in for rates after 20 years of being out, there's going to be some things to get over and figure out because we haven't been in for so long. And so, I would just say, we'll work really closely with Texas regulators to adjudicate that case. But certainly, there may be some things in that case that we'll figure out as we go.

Thank you. Our next question comes from the line of Durgesh Chopra from Evercore ISI. Please go ahead.

Just a little bit more color, and I'm just looking for some reaffirmation here. It looks like you started the year really strong in terms of EPS. And when I sort of do some high-level math and take the midpoints of the ranges, you've highlighted in terms of earnings contribution for quarter second, third and fourth, that will put you ahead of your top end of the guidance range. So maybe just talk to that. Is that -- you've started strong, but there's a long year to go, so you're kind of not raising guidance here, but you're starting strong or the strategy is to move costs from '26 into 2025 and de-risk '26. Maybe just talk to that as to how you're seeing that play out.

Yes. Great question, Durgesh. I think that first point you made, right, that we're four months into the year here and the financials really reflect the three months. So, it seems premature to do much in terms of adjustment of our guidance range. And I'll acknowledge, we did have some nice tailwinds in the first quarter, but we've got three more quarters to go, and we may have some headwinds there that we encounter. So, our thought was really just to wait and provide clarity really as the year goes on.

Got it. Okay. I appreciate that commentary. And then just kind of wanted to ask you on the EPA announcement here late April on PFAS, they were kind of announced specific targeted actions. Just wondering, how that impacts your operational strategy in tackling that forever chemical. And then any implications for the capital that you have in the five-year plan, please?

Durgesh, we're full speed ahead. I've mentioned on previous calls that we've sat with regulators, both economic and environmental regulators in our key states. And the orders that we've received from them is full speed ahead, mitigate this, meet the time lines and we're -- so we're still on our projected budget of $450 million will be complete by 2028. And there is no hesitation here at all. We're going to spend it, and we're going to mitigate the affected wells and sources. We continue to test our system. So, there are occasions where that could grow a little bit as we continue to test the various locations around the Company's footprint. But there is no -- we've seen nothing from EPA or this administration that would suggest that we should slow in any way. So, we're full speed ahead.

Our next question comes from the line of Travis Miller from Morningstar. Please go ahead.

Just a little follow-up there on PFAS discussion. In terms of the financing, I got those numbers that you were talking about for Pennsylvania specifically, since you had some success there. How much is left, would you say of the $450 million that's allocated to Pennsylvania then net those low interest loans to the $55 million if you get that?

Well, I would say that the spend in Pennsylvania is still largely to come. We have not spent much because in Pennsylvania, we have some larger plants that need mitigation. And so that takes much more planning, permitting and testing. So, Travis, most of that spend is yet to come. We continue to look at the low interest loans and grants in Pennsylvania. And we're hopeful that we can get more. We've already been, as you said, successful, but we've got applications in for additional dollars to offset what our customers need to pay. I don't have exact numbers on the applications that we're in right now, but we're happy to take that offline and get you some more numbers.

Okay. And that would be incremental to the $69 million, the $10 million and in the $59 million?

Yes. Of what we were received.

Okay. Okay. And then a question for Mike, data centers, I'm sure you weren't surprised that there would be a question on data centers. When you talk about the opportunity there, is that just simply more gas flowing through the distribution center? Or are you thinking more direct contracts to like on-site generation. I heard a couple of gas companies talking about projects. essentially behind the meter. Is that a supply source that you'd think about? Or are we just talking about more distribution volume?

Thank you for the question. I mean I think it's a variety of things. I think team Pennsylvania, the economic development entity in Pennsylvania has indicated there is somewhere around 72 projects in various forms of development. What I'm describing is some form or fashion of all the things that you talked about. We believe in behind the meter generation not only for data centers, but large volume customers as well, but it is very fluid at this particular time. And of the projects that we're currently in discussions with, it's very clear that there are different approaches to how this might happen. It's also very clear that the PJM grid does not have the adequate generation as you look out into 2030 and beyond to support virtually many of these projects. So natural gas will play a huge part in that. There's certainly latency within our system load factor that can be extrapolated to the benefit of customers, not only new customers, but our existing customers. And there's also potential investment that we might look at with potential partners. So, we have a team that's been working on this for quite some time. We're thinking about it every day and how we can support these efforts not only to the benefit of the region, but to our customers and specifically Peoples and Essential.

[Operator Instructions]. Our next question comes from the line of Gregg Orrill from UBS. Please go ahead.

Congratulations. Just maybe a follow-up there. with regard to the discussions that you're having with business opportunities on the gas side with data center customers. How do you see that evolving? When do you think those discussions would reach terms of agreements? What -- kind of what sort of update should we be looking for as the year progresses?

So again, I appreciate that question. As mentioned, with the vast number of projects that are currently in play. It's really hard to say specifically what the timing of any announcements would be. You've seen fairly large data center campuses that have already been announced. Those are not anything that we have portrayed in any of our analysis. I would also say that the state of Pennsylvania and any economic development packages they would put together those are going to have tremendous influence on who locates here. The unique potential of where individuals would locate data centers is something that we continue to look at. a really strong, robust delivery system. So, I would hesitate to present the timing of when we would announce any type of deal, and as I mentioned, the ones that we're looking at, they all come in various forms, shapes and sizes. So, what we do know is that the speed to market influence is going to be really important for these developers. So, I would suggest that as we develop deals and sign deals, we would come to the table with us immediately.

There's so many contributing factors to state government here. Pennsylvania has really got to play a major role as well. If we think about site location, site readiness in addition to everything that the Company is doing provide the adequate supply. Mike, I think the one you mentioned that got completed already Bedford, right?

Homer City

Homer City, I am sorry. Yes, and so, we have had some successes here in Pennsylvania. That one was not in our service area, but we're hopeful to see more of those, whether it's throughput or combinations. Sort of like we've done, Gregg, with the energy products that we sold last year. Those are always a possibility. But it's hard to say what form these ultimately will take the load timing.

Our last question comes from the line of Ryan Connors from Northcoast Research. Please go ahead.

Yes. So, Dan, one for you, Dan, on the O&M expenses. It seemed like that was a big surprise for us and you mentioned the bad debt kind of a good guide there. Can you kind of give us frame a little bit for us what the core growth rate was and kind of core O&M and where we should be thinking about that over the balance of the year? Is that bad debt benefit going to continue? Or is that -- will that tail off?

Sorry, that benefit that I mentioned, that will continue, meaning it doesn't get any better. It was sort of a one-time nonrecurring item that's coming through the balance sheet here as a result of the conclusion of the Aqua Pennsylvania rate case. But if we look and we had the same question. So, we look end-to-end here and say, well, if we didn't have some of these onetime-ish effects, including the customer assistance rider, that $8.5 million bar that you see at the beginning of the waterfall, if you kind of normalize this from last year's emission here, you'll come to about two -- call it, two -- between 2.5% and 3%. I think our quick math gave us 2.8% or so there. So that about O&M expenses. And as you know, we spent a lot of time really focused on keeping our O&M expenses under control, kind of remaining below 3% or closer to 2%, 2.5% is really our objective.

Yes. Dan, the work that we're just beginning here at the Company, much like other utilities around lean should bear fruit over the next few years. Although we're in the investment stage of that at this point, just getting our people trained up and getting people focused on that kind of an approach to -- but that next level, Ryan, for us, is really on that lean approach and then seeing results over the next few years.

Yes. So, I think. Kind of probably a bit year and first part of next year, Ryan, we'll be investing in that program and spending some money in order to get people trained up. And then beyond that, we look for some efficiencies to come out of that is really you've got the whole of the employee base looking at doing things efficiently, eliminating waste and taking action on those items. So, we're really excited about.

Got it. Now Mike, one for you on -- has the Company disclosed a rate base dollar value associated with that Intelis meter rollout?

No, we have not, at this point, no.

No. Okay. Got it. Okay. And then lastly, Chris, I wanted to just get your take on the Beaver Falls, I know it's not a massive deal, but interesting sequence of events there. I mean, you reached a settlement OCA was on board and then you get an adverse recommendation from the ALJ. So just curious what you can give us your take on that? Why we seem to continue to see these ALJ decisions go sometimes the wrong way? And then also, when do you think, we could expect to see Beaver Falls, actually come before the PUC? Could it be as soon as this month or would it be further out than that?

Yes. All good questions, Ryan. I wish I had a good answer for you as to why the ALJs in Pennsylvania continue to put the commissioners in a place where they need to return it. I'm hopeful that there was a philosophy emerging here that will make this a little bit easier to process because I think -- in some cases, that's what it is. It's a philosophy. Now, I do think given the settlement negotiated. I do think we have a favorable chance at the commission level. We expect this to be on an agenda in June this year, so about a month away, maybe, and listen, we're hopeful we're going to do all the work, and we've done all of our filings and everything to support this case. This is one is a primary example of a troubled system that needs assistance. The mayor came back, lowered her price. We're taking a little bit of goodwill. The OCA got comfortable with it. This is one that should get done. This is -- we need to make sure that deals like this get done in Pennsylvania for the water supply in this state.

This concludes our question-and-answer session. I will now turn the call over back to Mr. Chris for closing remarks.

Thanks, everyone, for joining us this morning. And as always, we stand ready to answer any of your follow-up questions. Look forward to hearing from you, and have a great day.