Q3 2021 California Water Service Group Earnings Call

October 28, 2021

[music].

Good day and thank you for standing by welcome to the California Water Service Group Q3, 2021 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and.

Answer session to ask a question during the session you will need to press star one on your telephone and if you require any further assistance. Please press star zero.

I would now like to hand, the conference over to your Speaker today, David Healey Vice President Corporate controller. Please go ahead. Thank.

Thank you Laurie.

Welcome everyone to the 2021 third quarter results call for California Water Service group.

With me today are Martin crop, Nicky, our president and CEO.

Thomas Nagel, our Vice President Chief Financial Officer, and Paul Townsley, Our Vice President corporate development and Chief regulatory Officer.

Replay dial in information for this call can be found in our third quarter.

<unk> release, which was issued earlier today.

Replay will be available until December 29, 2021.

As a reminder, before we begin the company has a slide deck to accompany the earnings call this quarter.

A slide deck was furnished with an 8-K. This morning and is also available at the company's website at Ww Dot Cal water group Dot com.

Can also access the webcast of this earnings call presentation at the same website.

Before looking at the third quarter results, we'd like to take a few moments to cover forward looking statements. During the course of the call. The company may make certain forward looking statements because these statements deal with future events, they are subject to various risks and uncertainties and actual.

Results could differ materially from the company's current expectations because of this the company strongly advises all current shareholders as well as interested parties to carefully read and understand the company's disclosures on risks and uncertainties found in our Form 10-K form 10.

<unk> press releases and other reports filed from time to time with the Securities and Exchange Commission.

I'm going to pass it over to Tom to begin.

Thanks, Dave and good morning, everyone. So we at Cal water are trying a little bit of new technology here today, we have the traditional conference call, which I know some of your on but in addition to that we are webcasting. This at.

At our website and by that you get an opportunity to see the slides along with us talking and hopefully youll find that helpful. And you can also hear a replay of that later later on.

One other unusual aspect of this quarter is because of what happened last year with our rate case, we're presenting our results in a slightly different order, so I, mainly going to be talking about the year to date.

Our earnings and financial results and Youll see that in the press release that we sent this morning as well as our slide deck, emphasizing the year to date over the quarter.

The third quarter results of 2020, we're a little bit unusual.

So leading off with slide five.

<unk>, which is our financial results year to date.

Here, we see that our net income rose $16 3 million and that's about 2025 per share on a per share basis.

I'll highlight also here and will talk a little bit later that our capital investments are slightly down for the year to date from $221 3 million in 2020 to $207 7 million here in 2021.

Flipping very quickly to slide six which is the third quarter financial results remember that in the third quarter of 2020.

Posted earnings that reflected the effect of the 20, the 2018, California General rate case proposed decision.

We incorporated in that quarter results of regulatory assets for interim rates and for regulatory mechanisms that would have been reflected in Q1 and Q2 of 2020 has the decision been rendered timely and so you'll see here that the results for 2021 third quarter are down.

And it mainly reflects in fact almost exclusively reflects the fact that we're not reporting that that extra Q1 Q2 that we had in 2020 it'll be clearer on the bar chart, which I'll get to in just a couple of slides.

Flipping now to slide seven the year to date financial highlights as I mentioned, we had increased net net income the big drivers of this are.

Rate increases so the annual step increase in California, and various offset filings that added $16 $3 million to our revenue our operating expense for the year to date period increased only $7 8 million and this.

This reflects reduced bad debt expense at the company.

And that bad debt was reduced because of our expectations that our customers are going to be more able to pay their past due balances due to several different state aid programs and we will talk in some detail about that a little bit later in the call.

We did see lower sales and higher decoupling balance here in the third quarter.

And that is due to our drought conservation in California that we're promoting.

As I mentioned the capital spending is slightly lower than 2020, but it's on track to meet our target range of $270 million to $300 million for the year and finally impacting the year to date period, as we talked a little bit about on the second quarter call. Our unbilled revenue accrual is adding eight.

$7 million above what it what it added in 2020 and so that's an.

An adder for the year to date results.

Flipping to slide eight for the earnings the EPS Bridge.

Again dealing with the year to date first you can see the impact of rate relief offset by Opex depreciation.

Local tax changes.

And the Unbilled revenue is a big portion of that over on the right hand side, that's the 14th element on the year to date.

You flip to slide nine this is.

The EPS bridge.

For the company just for the quarter.

2000, 22021, and there you can see the large amount of <unk> that was booked in 2020, Q3, which had been related to Q1 and Q2 regulatory assets.

So you can get an idea from the other bars, what it is that's driving our our change for the quarter you will see a reduced opex in the middle of that chart and again that is due to our lower estimate of uncollectible <unk> as a result of the customer relief mechanisms.

I wanted to take a moment on slide 10 to talk about earnings and how to think about earnings for the rest of the year.

And so we've talked about a number of these items on prior calls and I just wanted to reiterate each of them. So that there's a good understanding of where we are and where we're going.

The first item over on the left hand side of this slide is the Unbilled revenue accrual.

The revenue accrual is currently adding $21 million to revenue and that compares to last year, where it was adding $11 4 million at this time.

The Unbilled revenue as a result of a calculation that we do based upon how many of our customers have not yet received a bill at the end of the quarter and how many days that bill represents what the average expected payment under that Bill is.

And what we what we find on a year to year basis is that it generally comes back down at the end of the year, because we're dealing with cooler weather and smaller bills.

And we expect that not to have a big impact on earnings on an annual basis. So when you see $20 1 million being added this year that means most likely that that youre going to see that number come down.

A long way.

To year end, so please keep that in mind.

The second item that I'll address on the right hand side of the slide is the authorized rate base. We've mentioned this before a good way to calculate kind of our core earnings our base earnings is to take the authorized rate base multiply that by the capital structure.

The equity portion of the capital structure and the authorized return on the equity portion of that rate base.

That should get you a general guidance to annual earnings.

In addition to the Unbilled revenue other items, which may impact earnings outside the authorized return on rate base.

The recognition of equity AAP DC. This year, we have $2 3 million recognized to date.

And just to remind you last year at this time I think that number was more like $4 million, that's come down a bit.

From last year to this year, but nevertheless, it is additive to that core.

Earnings earnings power.

Second item is the gain or loss on any nonqualified retirement assets. This year, we have so far a gain of $2 1 million in 2021.

And the value of these assets is of course market driven and the year end values will be based on the market conditions at year end.

And the last that I mentioned on a couple of other points earlier, the bad debt reserve has been reduced from $5 2 million at the end of 2020 to $2 8 million at the moment, reflecting changes in our estimates of cash recovery, having to do with those state aid programs.

And so what youll notice for the year 2021 is that we we actually have a negative uncollectible right. Now. So we started the year with $5. Two uncollectible. We're currently at two eight uncollectible.

And that's certainly better than what would be in rates for 2021.

So with all of that said I'm going to turn it over to Paul Townsley to give us a regulatory update thank.

Thank you very much Tom turning to slide 11.

Water has two proceedings before the California Public Utilities Commission right now the first of course is our cost of capital case, which we filed along with three other class a utilities.

On may 1st of this year.

Our schedule has been established in that case, and which we expect.

Intervenor testimony.

On the cost of capital will be filed later this year.

A commission decision.

On the case, probably in the second quarter of next year.

We expect that a memorandum account will be established so that any changes in the cost of capital will be made retroactive retroactive to January one.

2022.

The second matter is our triennial general rate case in front of the California Public Utilities Commission, we filed our application on July one.

And are currently going through discovery with the California public advocates office, we expect their testimony along with testimony if any other intervenors and either late January or early February of next year and a commission decision either late in the fourth quarter of <unk>.

22 or early in 2023.

Again, we expect a memorandum account will be established so that any rate changes that are made we'll be retroactive back to January 1st of 2023.

And finally, we also have a rate case underway in Washington in front of the Washington Utilities and Transportation Commission.

That rate case includes both our legacy Washington water systems as well as our newly acquired Rainier view Arena here.

Water system.

And we expect a decision from that commission probably early next year.

And with that I will turn it over to Marty.

Paul Good morning, everyone. A couple of operational things I want to update everyone on starting off on page 12 talking about 2021, California drought.

As you may have seen on October 19th Governor Gavin Newsom in the state of California expanded the drought declaration to be statewide prior to this declaration. It was 50 of the 58 counties. So the majority of the state was under a drought mandate.

Now as of October 19th the entire state is under that drought mandate.

Cal water has moved to stage two drought risked extractions in six of our districts, which is really a continuation on.

Voluntary reduction targets enhanced advertising.

More mailers and information going out to customers promoting conservation programs et cetera.

The company has posed if we have to implement water budgets in 2022, if the drought continues we're posed to do that the team is well prepared and we continue to focus on our water supply resiliency in all of our districts, where we track it on a district by district level. Every couple of weeks, we are reviewing that with an officer team and myself.

As you may have seen five days after the governor declared the drought declaration statewide.

We had what was known as a monster storm, our atmospheric river, which is when the jet stream pivots towards California and takes all the moisture that's accumulating in a specific end points at right at a target that target on Sunday was the state of California in particular, Northern California.

As a result of this act atmospheric River, our Monster storm.

We received a lot of rain in a very short period of time.

Rainfall totals in northern California, which really covers from about San Francisco right about where <unk> is north.

Our range from a low of three inches in 24 hours to a high of over 20 inches to zero or 20 inches.

80% of our facilities in northern California experienced power outages, we had a number of main breaks and northern California due to the ground getting saturated main starting to move around a little bit.

I'm very happy to report that our systems overall.

Very well with this heavy type of range.

And that very few of our customers if any of them experienced any water outages. We had one system that had a fairly large main break.

That we had to bring in some bottled water for but they are there they are back online now.

I can tell you I live in the North Bay.

The town 11, we receive about nine inches of rain.

In a given year, we received almost nine two inches of rain in about a 14 hour period on Sunday So.

It certainly was a monster storm and did just that.

Also worth noting is that there was very there well there was.

Select areas of flooding due to a lot of run off there really was not a lot of flooding within northern California, because the ground was very dry and started to absorb it. All Additionally, with the heavy rainfall we got about three feet a very dense heavy snow in the Sierra is which is a very good sign.

In the early in the early phases as we get into two winter here and so hopefully that will continue.

While this is certainly a big storm. It is it is a drop in the bucket so to speak in terms of the drought and so we need to see what happens as we go further along into the fall and into the winter to see what our drought conditions will really be like in 2022, and we'll update everyone on that.

Our year end conference call at the end of February.

Moving on to page 13, I wanted to give everyone an update on where we are with our pandemic.

Response efforts in court in conjunction with COVID-19, all of our company employees have returned to the office.

Remained being.

Vigilant for screening employees everyday temperature checks et cetera, various testing programs.

And so far things have gone quite well, new Mexico, Washington, and Hawaii have all out us to restart billing collection efforts with some restrictions in the California moratorium is expected to continue.

Through 2021 for collection efforts.

As Tom mentioned the change of estimates on the allowance for doubtful accounts and collections. The state of California allocated $1 billion for rare Rich management program Cal water has applied for $16 $9 million.

On behalf of our customers, who are falling behind on their water bills during the pandemic.

We expect to see payment from that as early as February or potentially sooner.

There are bills outstanding over 90 days of increased to about $16 $6 million.

And we will.

Wait for that money coming from the state that has been <unk>.

<unk> and allocate it just hasnt been distributed yet so we submitted our application to applications have been approved or awaiting for the allocations, hence the change in estimate.

The incremental costs associated with COVID-19, as at the end of Q3 was a cumulative amount of about $1 $4 million for the pandemic to date, we anticipate filing for recovery of these costs in 2022, the incremental cost that was incurred in Q3 was about $200000 and that really pertains to increase purchases.

PPE.

Incremental testing et cetera liquidity remained strong with the company at the quarter, we had $144 million in cash and additional borrowing capacity of about $420 million on our line of credit subject to various borrowing conditions and overall like I said liquidity remains very very strong.

As we've talked about in the previous quarters business development. It remains strong with the company and Paul I think you want to give US a quick update on where we are for our business development efforts I do thank you very much Marty turning to slide 14.

As far as acquisitions go, California water has been very busy.

We have four announced acquisitions right now going through public utility Commission approvals in new Mexico and Hawaii.

With up to eight over 8000 equivalent dwelling units included in those acquisitions and on the slides you can see we have to preserve at Miller 10, which is here in the Central Valley of California, We have Animas valley water, which is a.

Water system in northern New Mexico with 2000, we have the Campo resort wastewater system on the Big Island of Hawaii with 1500.

The HOA to utilities, which is again a wastewater system on the island of Hawaii with 18 hybrid.

We have other acquisitions that we're working on and hope to make announcements.

And in Texas, our partnership with <unk> continues to grow.

As of this month, we have over 5500 connections and commitments.

In place so with that I will turn it back to Tom Thanks, Paul.

I will briefly go over slides 15, and 16, you've seen these slides many times before we just want to keep everyone on track on slide 15, the only update here is the.

A recording of the year to date capital than I realized.

At the beginning of the call I mentioned, we talk in a little bit more detail about the capital and I don't think we did that so just very very briefly I think theres two.

Bigger explanations for why the capital has slightly slower this year than last year.

The first has to do with the supply chain issues that <unk> been hearing about a lot of the materials that we that we use in our construction.

<unk> had significant delays, particularly in the early part of the year with the PVC pipe and Texas Winter Storm later in the year with other other materials just through the general logistics.

Issues that we're having as a country I think we've worked well with our suppliers and with our construction companies to try to mitigate a lot of those.

But youre still going to see some delays as a result of some of those things. The other thing is just that that we're in the middle of the prosecution of the 2021 general rate case and <unk>.

Paul I don't know if you have the number in your head, but I think it's been about 200 data requests.

From the commission staff and a lot of those data requests have to do with capital projects and they are addressed by the same engineers that would be working on designing and implementing these capital projects. So we often see a little bit of a delay as we are in the summer of the year that we file a general rate case. So that's some of the explanation of why that debt.

Capital is lagging a bit this year as compared to last year.

Slide 16 is Theres really no change here. These are just our estimates based upon the rate case filing and as Paul mentioned, we don't have any additional information on where that might go at this point.

And Marty I'm going to turn it over to you on slide 17 for a wrap up.

Thank you Tom.

Reflect back on Q3 of 2021.

Results are in line with our expectations.

As Tom said, it's a little bit bumpy, comparing the year over year and quarter over quarter. So make sure you take time to look at the.

The information in the slides it Tom's laid out so you can you can normalize it and look at it.

What a normal quarter looks like.

But overall, we're happy with our results for the quarter as.

As Paul mentioned, we are we.

Have to open CPUC filings, which is the biggest part of our business for our group and then we call that company, that's the state of California.

We've completed all our site visits with the PUC here in the state of California, and as Paul and Tom mentioned, we're in the middle of answering a lot of data requests and so that will continue and we're also starting to prepare for a public participation hearings that we expect will start sometime in the first quarter of 2022 as Paul mentioned the team is busy working on regulatory approvals.

<unk> and the integration of multiple acquisitions across our platforms.

And the BD team remains busy which we're excited about we don't see that slowing down anytime soon and we will continue our efforts looking for expansion opportunities for our California water service group.

Our next quarterly call, which will be the end of February we'll have a much better sense of winter conditions. Obviously this is the first storm. We just really went through here a few days ago for the west coast, but when we wrap up the year and go through year end earnings we'll have a much better sense of where we are with the snow pack and drought conditions in this day, and we'll be able to get better.

Items on what the trial would potentially look like in 2022, once we have better data from a few months of our winter season, So with that Laurie we're going to open it up for Q&A. Please.

And yes, it's a reminder to ask a question you will need to press star one on your telephone.

Can we draw your question press the pound key.

Again, Please press star one if you have any questions.

Lori if I might add just because we are dealing with this new technology. If you are on the webcast rather than on the telephone.

Up in the I believe it's up in the upper right hand corner of the screen. There is an opportunity to press a button to ask a question. If you don't see that button you may need to refresh your tab on your browser, but.

If you have refreshed or you do see that button you can type in a question and we can get to that question as well. So go ahead Lori.

Our first question is from Ben <unk> of Baird. Your line is open.

Hey, Tom.

Good morning, Dan.

Hi, guys.

So talking about 15 to 16.

I know those are projections there.

How do you guys get comfortable with doing that.

No.

Big step ups going on there.

Like how do you get comfortable with that.

Of course of course.

Alastair.

Just maybe.

Do you guys have been doing so much.

Good work in California.

<unk>.

People recognize that.

Or how does that work.

That's all very good.

Thank you Ben let me take the first part of it and maybe I'll Road, Paul and as well.

Marty can can back clean up on this so the projections on the yellow bars on slides 15 and 16, they represent what we filed with the commission and so we're in the process of working through those requests.

We've done pretty well in the past on requests that we've made to the commission Paul can address that particularly.

Just kind of to two things here. One is can you get the commission to approve those capital investments and the second is can.

Can you execute on that and I think what we've shown over the last six seven years is that our capital execution has really ramped up dramatically. If you look back.

14, 2013, when we were only putting in capex.

Just over $100 million, obviously, we've done a lot with reengineering our process.

Both on the operation side on the contracting side and on the engineering side to allow us last year to invest almost $300 million and so moving from that number too.

<unk> hundred $63 65, and a couple of years I think is very doable I think we know what we need to do to get to those numbers. The real question is the regulatory authorization and Paul I don't know if you have anything to add on that the only thing that I would say Tom is that.

Our ability to justify our capital projects at the commission has significantly improved over the past decade.

The kinds of capital projects that we are seeking approval from.

Approval Commission approval for are really the bread and butter types of utility projects that for the most part really be non controversial. These are main replacement programs.

Treatment for chemicals.

System upgrades and the like and so while I don't expect that the commission will give.

Give us the opportunity to have everything that we've asked for included in the rate case.

Do expect that we will be very successful in getting the vast majority of it.

And then I would just add.

And we've spent a lot of time internally looking and trying to improve ourselves and prove our our forecasting and our planning our rate case preparation in our communities and governmental affairs.

And we always tell people, we sit on a three legged barstool, one leg, we have customers and affordability.

The other leg, we have regulators and really have to look at reasonableness and then the third leg. We have stockholders, where you have to consider rate base growth dividend growth and book value growth and I think over the last decade, we've been able to keep that fairly balanced where we've been able to meet the needs.

What we think the capital program needs, while keeping rates affordable and still growing dividends and growing the rate base and book value of the company. So we've kept the same approach as we move into 2022, we have a lot of exciting initiatives going on which is basically reexamining, how we look at capital again, if you remember it wasn't too long ago.

We kind of Reengineered some of our capital planning processes and we're doing the same thing going into 2022 and looking at how can we make it better.

Recruiting.

Some fresh new blood into engineering to help us look at things a little differently and looking at our capital delivery process. So it's that continuous improvement and staying focused on those three legs of the barstool I think that's been a successful so far and I think.

I would argue that the 2020 a rate case is probably the best prepared rate case, we've ever done and I think that will certainly show up in <unk>. When we go into settlement discussions with the commission to try to get to a final number.

Thank you.

Thank you guys.

Thanks, Ben Thanks have a good day.

And our next question is from Jonathan Reeder of Wells Fargo. Your line is open.

Hey, good morning, gentlemen.

Kind of curious what happened to the intervenor testimony in the cost of capital I thought it had been do much.

Much earlier in the month.

Haven't seen it posted.

Paul I can I can start.

I think what we had expected there was a pre hearing conference with the administrative law judge and.

Ruble agreement on the schedule.

That verbal agreement had the intervenor testimony do I think it was on I want to say it was like Friday October 9th or.

Whatever that Friday was.

Because we suspect that because the schedule actually wasn't published so the scoping memo that would accompany.

As adopted schedule was never published that.

<unk> advocate chose to delay their testimony until such time as that occurs and so we're in a bit of a holding mode I assume theyre ready to go with their testimony I assume that it's ready to hit print and send out.

But they it sounds like are waiting for that actual scheduled to be adopted.

Okay, and no clarity as to when that might be.

Published.

The scoping memo gets published.

No. Unfortunately, not we are waiting on the judge we have made inquiries but.

The commission has lots of things in front of me right now judges are very busy.

And.

We're simply.

All of us waiting to see that schedule come out.

Okay. So I guess from our perspective, we shouldn't assume it has anything to do with settlement discussions may be going on where it could play out.

You bet.

Necessity intervenor testimony.

No no you should not not presume that we would not.

Start settlement until we saw their testimony and knew where where all the parties were.

And Paul I think as we put in the slides too we expect the cost of capital to be wrapped up sometime in the second quarter.

It is definitely delayed.

Definitely delayed as compared to the last cycle.

Right, Okay, and then any updated thoughts on who governor newsome might appoint to lead the CPUC with.

Pleasant Badgers.

Imminent retirement.

No.

Nothing official yet obviously rumors are starting to fly a little bit but those are all unofficial.

So we are anxiously awaiting to see.

Obviously.

We have our opinions and thoughts and we have shared those with the Governor's office, but he ultimately will make that appointment and I know they are actively working on it.

Okay.

Slightly differently.

The name being tossed out the rumors.

Are they.

I know you guys had been advocating that.

With some good policy experience, maybe even on the water side directly.

Gets put on the commission.

That's still a possibility at this juncture.

Yeah, Jonathan you always ask really good questions I can't speculate on.

On any of the rumors, but I will say it.

Last discussion what the Governor I would say he was he was he was honing in on the fact, you needed to get someone with good utility experience.

With maybe a decent policy background.

Okay, Great no I appreciate that color and congrats on a good quarter.

And just to clarify that Jonathan Thats utility regulation experience.

Yep Okay.

Yes.

Thanks, John.

And again, if you have any questions at this time. Please press star one we'll pause for just a moment to see if there are any additional questions.

Yes.

And we have a question from Angie <unk> of Seaport. Your line is open.

Thank you.

Couple of.

Numbers question, so for the bad debt provision falling.

Yeah I appreciate this disclosure, but what is roughly reflected in their rates and so I would be interested in the delta between what are you tracking now versus whats reflected in the rate.

So the.

We did look this up the California rate case has $1 9 million.

Bad debt.

Sorry, I didn't look it up in the other states. So it's probably on the order of $2 million on an annual basis that would be covered in rates.

Okay, and then unregulated earnings year to date.

Youll see the 10-Q10-Q later today.

I'm not sure that there is any big movements in unregulated earnings.

For the year as compared to the prior year I think it's about the same yes, there has been no change.

It's about yes, I see last year it was about.

One 4 million for the year right, Okay and then.

Oh, sorry, Andrew just to just to clarify one thing the way that we know book our pension costs.

Keep in mind that the regulated pension costs. Some the non service portion of that pension cost is below the line for accounting purposes. So you may see a big difference.

<unk>.

The amounts that are reported there, but a lot of that is the pension cost element that's covered in a balancing account in California, and even that non the nonoperating part of it is covered in that balancing accounts, so that gets into a little bit of confusing.

Counting but.

<unk> does not represent a change in the profitability of the company.

Okay. Thank you.

Then the last one.

Cash tax benefits.

I'm just looking at it in 2020, it added about just about $3 million.

How big of a benefit have you recorded year to date.

So so year to date the benefit is $92 million gross so that would be the gross deduction.

And.

It's also included in our rates and the regulatory side. So this year.

The actual repairs benefit will be slightly lower than the value that's in the <unk>.

Our rates.

Okay. So there is basically trying to solve for all of those.

Addition to the.

<unk> net income derived from the rate base. So that is not a driver this year that's correct.

Not be additive this year in the prior year it was.

Okay Awesome and then.

Sorry that im going to numbers like that but for next year for 2022.

Without accounting for any changes in the ROE and the cost of debt.

Is it fair to say that given that it's the last year of the current rate cycle I should assume that there was some detriment versus the allowed Roe.

Again, given that the costs are catching up.

Just before the reset of revenue.

I think that if you look back in history, that's been a bit of the pattern that the highest roe or in the year.

The first test year in the California, ERC I think Theres a lot of other things going on obviously with the company and growth in other states and other.

Other types of items, so I don't know that it would necessarily be true. This time, but certainly the pattern in the past has been the stairstep approach to earnings where the earnings are highest in that first year of the rate case and then they are very very flat from there on out.

Yes, I think I'd just add that if we werent in a COVID-19 environment. We are in a normal operating environment, we would be telling people right now the.

The third year of the rate case don't don't expect a whole lot because that's when we tend to see the regulatory lags start to kick in on some of the corporate expense items et cetera.

Blurred, a little bit because of Covid, our travel budgets have been about zero and we haven't been training sending people out to conferences and doing a lot of stuff that we normally do so it's a little harder for us to see that but certainly the third year of the rate cases always the most difficult year of the three year cycle.

And then lastly.

The disclosure on the consolidated rate base.

This 1.1 0.2, right how much of that $1 eight two is outside of California.

I think that that number if you compare that to what we've asked for in the California rate case, it's about 100.

It's between 101 hundred $50 million in other in.

In the other states.

100, 100, Okay with Hunter the 10 last year, it's always something that is probably closer to that 150.

Okay.

Andrew we have had investments in Texas for example, and we've been purchasing systems in Hawaii earlier in the year those are adding to rate base as well.

Okay, and then lastly, I mean, the I understand that we're still waiting for the filings of the intervenors.

But.

We're starting to hear some.

Some rumblings about.

The position of both intravenous is going to be and I think that we had hoped all hope that the cost of capital proceeding is going to be mostly about.

To wrap up the cost of swaps.

It does not seem like that's the case there is some.

Mentioned that the allowed ROE.

The water utilities in California are too high.

I don't know if again, if you can say anything given that we're still waiting for those official positions would be fine.

We have not seen the testimony.

And we have heard rumors just like we've heard rumors about what may be the next chairman of the commission, but at this point, we really want to wait and see the positions in writing from.

Intervenors and then we can make our decisions based on that.

Okay. Thank you guys. Thank you.

Thanks Angie.

Yes.

And again, if you have any question. Please press star one on your telephone keypad.

There are no further questions at this time I will now turn the call over back to Marty.

Great. Thanks Laurie.

Well that's it for the third quarter gang, thanks for hanging with us and asking good questions. We'll be around today. If anyone has any follow ups feel free to reach out to Tom and he'll he'll get us all together.

It's hard to it's hard to label as you say and happy holidays to everyone that our next.

Conference call will be the end of February for our yearend conference call in so in the meantime, everyone be safe. Thank you for your continued interest in California water service group and we look forward to talking to everyone really soon thanks, Lori thanks, everyone have a good day.

Thank you and this concludes today's conference call. Thank you for participating you may now disconnect.

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Good day and thank you for standing by welcome to the California Water Service Group Q3, 2021 earnings call at this time.

Participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. So I'll ask a question. During this session you will need to press star one on your telephone.

You require any further assistance. Please press star zero I would now like to hand, the conference over to your Speaker today, David Healey Vice President Corporate controller. Please go ahead.

Thank you Laurie welcome everyone to the 2021 third quarter results call for California Water Service group.

With me today are Martin crop, Nicky, our president and CEO.

Thomas Nagel, our Vice President Chief Financial Officer, and Paul Townsley, Our Vice President corporate development and Chief regulatory Officer.

Replay dial in information for this call can be found in our third quarter.

<unk> release, which was issued earlier today.

The replay will be available until December 29, 2021.

As a reminder, before we begin the company has a slide deck to accompany the earnings call. This quarter. The slide deck was furnished with an 8-K. This morning and is also available at the company's website at Www water group Dot com.

You can also access the webcast of this earnings call presentation at the same website.

Before looking at the third quarter results, we'd like to take a few moments to cover forward looking statements. During the course of the call. The company may make certain forward looking statements because these statements deal with future events. They are subject to various risks and uncertainties and <unk>.

<unk> results could differ materially from the company's current expectations because of this the company strongly advises all current shareholders as well as interested parties to carefully read and understand the company's disclosures on risks and uncertainties found in our Form 10-K form 10.

Q press releases and other reports filed from time to time with the Securities and Exchange Commission.

I am going to pass it over to Tom to begin.

Thanks, Dave and good morning, everyone. So we at Cal water are trying a little bit of new technology here today, we have the traditional conference call, which I know some of you are on but in addition to that we are webcasting. This.

At our website and by that you get an opportunity to see the slides along with us talking and hopefully you will find that helpful. And you can also hear a replay of that later later on.

One other unusual aspect of this quarter is because of what happened last year with our rate case, we're presenting our results in a slightly different order, so I'm, mainly going to be talking about the year to date.

Earnings and financial results and Youll see that in the press release that we sent this morning as well as our slide deck, emphasizing the year to date over the quarter.

The third quarter results of 2020, we're a little bit unusual.

So leading off with slide five.

Which is our financial results year to date.

Here, we see that our net income rose $16 3 million and Thats about <unk> 25 per share on a per share basis.

I'll highlight also here and will talk a little bit later that our capital investments are slightly down for the year to date from $221 3 million in 2020 to $207 7 million here in 2021.

Flipping very quickly to slide six which is the third quarter financial results remember that in the third quarter of 2020.

Posted earnings that reflected the effect of the 20, the 2018, California General rate case proposed decision.

And it mainly reflects in fact almost exclusively reflects the fact that we're not recording that that extra Q1 Q2 that we had in 2020 it'll be clearer on the bar chart, which I'll get to in just a couple of slides.

Flipping now to slide seven the year to date financial highlights as I mentioned, we had increased net net income the big drivers of this are.

Rate increases so does the annual step increase in California, and various offset filings that added $16 $3 million to our revenue our operating expense for the year to date period increased only $7 8 million and this.

This reflects reduced bad debt expense at the company.

We did see lower sales and higher decoupling balance here in the third quarter.

And that is due to our drought conservation in California that we're promoting.

As I mentioned the capital spending is slightly lower than 2020, but it's on track to meet our target range of $270 million to $300 million for the year.

And finally impacting the year to date period, as we talked a little bit about on the second quarter call.

Our unbilled revenue accrual is adding $8 7 million.

Above what it what it added in 2020 and so that's a.

Adder for the year to date results.

Flipping to slide eight for the earnings the EPS Bridge.

Again dealing with the year to date first you can see the impact of rate relief offset by Opex depreciation.

And local tax changes.

And the Unbilled revenue is a big portion of that over on the right hand side, that's the 14th element.

On the year to date, if you flip to slide nine this is the EPS bridge for the company just for the quarter.

2020 to 2021 and there you can see the large amount 80 that was booked in 2020, Q3, which had been related to Q1 and Q2 regulatory assets and so you can get an idea from the other bars. What it is that's driving our our change for the quarter you will.

See a reduced opex in the middle of that chart and again that is due to our lower estimate of uncollectible <unk> as a result of the customer relief mechanisms.

I wanted to take a moment on slide 10 to talk about earnings and how to think about earnings for the rest of the year.

And so we've talked about a number of these items on prior calls and I just wanted to reiterate each of them. So that there's a good understanding of where we are and where we're going.

The first item over on the left hand side of this slide is the Unbilled revenue accrual.

The revenue accrual is currently adding $21 million to revenue and that compares to last year, where it was adding $11 4 million at this time the.

<unk> revenue as a result of a calculation that we do based upon how many of our customers have not yet received a bill at the end of the quarter and how many days that bill represents what the average expected payment under that Bill is.

And what we've what we find on a year to year basis.

That generally comes back down at the end of the year, because we're dealing with cooler weather and smaller bills.

And we expect that not to have a big impact on earnings on an annual basis. So when you see $21 million being added this year that means most likely that that youre going to see that number come down.

Long way to year end, so please keep that in mind.

Equity portion of the capital structure and the authorized return on the equity portion of that rate base.

And that should get you a general guidance to annual earnings in.

In addition to the Unbilled revenue other items, which may impact earnings outside the authorized return on rate base.

The recognition of equity AFDC. This year, we have $2 3 million recognized to date.

And just to remind you last year at this time I think that number was more like $4 million thats come down a bit.

From last year to this year, but nevertheless, it is additive to that core <unk>.

Earnings earnings power.

Second item is the gain or loss on any nonqualified retirement assets. This year, we have so far a gain of $2 1 million in 2021.

And the value of these assets is of course market driven and the year end values will be based on the market conditions at year end.

And the last that I mentioned, a couple of other points earlier, the bad debt reserve has been reduced from $5 2 million at the end of 2020 to $2 8 million at the moment, reflecting changes in our estimates of cash recovery, having to do with those state aid programs.

And so what youll notice for the year of 2021 is that we we actually have a negative uncollectible right. Now. So we started the year with $5. Two uncollectible. We're currently at $2 eight uncollectible.

And Thats certainly better than what would be in rates for 2021.

So with all of that said I'm going to turn it over to Paul Townsley to give us a regulatory update thank.

Thank you very much Tom turning to slide 11.

Water has two proceedings before the California Public Utilities Commission right now the first of course is our cost of capital case, which we filed along with three other class a utilities.

On May <unk> of this year.

Our schedule has been established in that case, and which we expect.

Intervenor testimony.

On the cost of capital will be filed later this year and a commission decision.

On the case, probably in the second quarter of next year.

We expect that a memorandum account will be established so that any changes in the cost of capital will be made retroactive retroactive to January one.

2022.

The second matter is our triennial general rate case in front of the California Public Utilities Commission, we filed our application on July 1st and are currently going through discovery with the California public advocates office, we expect their testimony along with testimony of any other intervenors.

And either late January or early February of next year.

A commission decision either late in the fourth quarter of 2022 or early in 2023 again, we expect a memorandum account will be established so that any rate changes that are made we will be retroactive back to January one 2023.

And finally, we also have a rate case underway in Washington in front of the Washington Utilities and Transportation Commission.

That rate case includes both our legacy Washington, and water systems as well as our newly acquired Rainier view Arena here.

Water system.

And we expect a decision from that commission probably early next year.

And with that I will turn it over to Marty.

Thanks, Paul Good morning, everyone. A couple of operational things I want to update everyone on starting off on page 12 talking about 2021, California drought.

As you may have seen on October 19th Governor Gavin Newsom in the state of California expanded the drought declaration to be statewide.

Prior to this declaration. It was 50 of the 58 counties. So the majority of that state was under a drought mandate now.

As of October 19th the entire state is under that drought mandate.

Cal water has moved to stage two drought restrictions in six of our districts, which is really a continuation on.

Sure.

A voluntary reduction targets enhanced advertising.

Mailers and information going out to customers promoting conservation programs et cetera.

As you may have seen five days after the governor declared the drought declaration statewide.

We had what was known as a monster storm, our atmospheric river, which is when the jet stream pivots towards California and takes all the moisture that's accumulating in the Pacific and points at right at a target that target on Sunday was the state of California in particular, Northern California.

As a result of this act atmospheric River, our Monster storm.

We received a lot of rain in a very short period of time.

<unk> totals in northern California, which really covers from about San Francisco right about where SFO is north.

Ranged from a low of three inches in 24 hours to a high of over 20 inches to zero 20 inches.

80% of our facilities in northern California experienced power outages, we had a number of main breaks.

More than California, due to the ground getting saturated main starting to move around a little bit.

Very happy to report that our systems overall worked very well with this heavy type of rain.

And that very few of our customers if any of them experienced any water outages. We had one system that had a fairly large main break.

That we had to bring in some bottled water for but they are back online now I can tell you I live in the North Bay.

Town 11, we receive about nine eight inches of rain.

In a given year, we received almost $9 two inches of rain in about a 14 hour period on Sunday So.

It certainly was a monster storm and did just that.

Also worth noting is that there was very there will there was.

Select areas of flooding and due to a lot of run off there really was not a lot of flooding within northern California, because the ground was very dry and started to absorb it all.

Digitally with the heavy rainfall.

About three feet, a very dense heavy snow in the Sierra is which is a very good sign.

In the early in the early stages as we get into two winter here and so hopefully that will continue.

Our year end conference call the end of February.

Moving on to page 13, I want to give everyone an update on where we are with our pandemic risk.

Our response efforts and important in conjunction with COVID-19.

All of our company employees have returned to the office.

We remain being built.

<unk> for screening employees everyday temperature checks et cetera.

<unk> testing programs.

Through 2021 for our collection efforts.

As Tom mentioned the change of estimates on the allowance for doubtful accounts and collections. The state of California allocated $1 billion for railroads management program Cal water has applied for $16 $9 million.

On behalf of our customers, who are falling behind on their water bills during the pandemic.

And we expect to see payment from that as early as February or potentially sooner or bills outstanding over 90 days of increased about $16 $6 million.

And we will.

Wait for that money coming from the state that has been reserved and allocated it just hasnt been distributed yet so we submitted our application the applications have been approved or awaiting for the allocations, hence the change in estimate.

The incremental costs associated with COVID-19 as of the end of Q3 was accumulative amount of about one $4 million for the pandemic to date, we anticipate filing for recovery of these costs in 2022, the incremental cost that was incurred in Q3 was about $200000 and that really pertains to increase purchases of <unk>.

<unk>.

Incremental testing et cetera liquidity remains strong with the company in the quarter, we had $144 million in cash and additional borrowing capacity of about $420 million on our line of credit subject to various borrowing conditions and overall like I said liquidity remains very very strong strong.

As far as acquisitions go, California water has been very busy.

We have four announced acquisitions right now going through public utility Commission approvals in new Mexico and Hawaii.

With up to eight over 8000 equivalent dwelling units included in those acquisitions and on the slide you can see we have to preserve it Miller 10, which is here in the Central Valley of California, We have Animas valley water, which is a.

And the HOA to utilities, which is again a wastewater system on the island of Hawaii with 1800.

We have other acquisitions that we're working on and hope to make announcements.

And in Texas, our partnership with <unk> continues to grow.

As of this month, we have over 5500 connections and commitments.

And place so with that I will turn it back to Tom Thanks, Paul.

I will briefly go over slides 15, and 16, you've seen these slides many times before we just want to keep everyone on track on slide 15, the only update here is the.

Recording of the year to date capital than I realized.

At the beginning of the call I mentioned, we are talking a little bit more detail about the capital and I don't think we did that so just very very briefly I think theres two.

Bigger explanations for why the capital has slightly slower this year than last year.

The first has to do with us the supply chain issues that you've been hearing about a lot of the materials that we that we use in our construction.

<unk> had significant delays, particularly in the early part of the year with the PVC pipe and Texas Winter Storm later in the year with other other materials just through the general logistics.

Issues that we're having as a country I think we've worked well with our suppliers and with our construction companies to try to mitigate a lot of those.

But youre still going to see some delays as a result of some of those things. The other thing is just that that we're in the middle of the prosecution of the 2021 general rate case and <unk>.

Paul I don't know if you have the number in your head, but I think it's been about 200 data requests.

From the commission staff and a lot of those data requests have to do with capital projects and they are addressed by the same engineers that will be working on designing and implementing these capital projects. So we often see a little bit of a delay as we are in the summer of the year that we file a general rate case. So that's some of the explanation of why that debt.

Capital is lagging a bit this year as compared to last year.

And Marty I'm going to turn it over to you on slide 17 for a wrap up.

Thank you Tom.

As we reflect back on Q3 of 2021.

Results are in line with our expectations.

As Tom said, it's a little bit bumpy, comparing the year over year and quarter over quarter. So make sure you take time to look at the.

The information in the slides that Tom has laid out. So you can you can normalize it and look at it.

What a normal quarter looks like.

But overall, we're happy with our results for the quarter as.

As Paul mentioned, we are we have two open CPUC filings, which is the biggest part of our business for our group and then we call that company, that's the state of California.

We've completed all our site visits with the with the PUC here in the state of California, and as Paul and Tom mentioned, we're in the middle of answering a lot of data requests and so that will continue and we're also starting to prepare for our public participation hearings that we expect will start sometime in the first quarter of 2022 as Paul mentioned the team is busy working on regulatory approvals.

<unk> and the integration of multiple acquisitions across our platforms.

Our next quarterly call, which will be the end of February we'll have a much better sense of winter conditions. Obviously this is the first storm. We just really went through here a few days ago for the west coast, but when we wrap up the year and go through yearend earnings we'll have a much better sense of where we are with the snow pack and drought conditions in this day, and we'll be able to get better.

And so on what the drought with potentially look like in 2022, once we have better data from a few months of our winter season, So with that Laurie we're going to open it up for Q&A. Please.

And yes, it's a reminder to ask a question you will need to press star one on your telephone.

Can we do a question breast upon Keith again, Please press star one if you have any questions.

Lori if I might add just because were dealing with this new technology. If you are on the webcast rather than on the telephone.

Up in the I believe it's up in the upper right hand corner of the screen. There is an opportunity to press a button to ask a question. If you don't see that button and you may need to refresh your tab on your browser, but.

If you have refresher you do see that button you can type in a question and we can get to that question as well.

Go ahead Lori.

Yes, our first question is from Ben <unk>.

Of Baird. Your line is open.

Marty Tom.

Good morning, Dan.

Hi, guys.

So talking about 15 and 16.

I know those are projections there.

How do you guys get comfortable with doing that.

<unk>.

No.

Big step ups going on there.

<unk>.

Like how do you get comfortable with that.

Towards.

Alastair.

Maybe you could draw.

You guys have been doing so much.

Good work in California.

<unk>.

People recognize that.

The PUC or how does.

But we're.

Thanks, Doug.

Thanks, Ben Let me take the first part of it and maybe Alberto Paul and as well and Marty can can back clean up on this so the projections on the yellow bars on slides 15 and 16, they represent what we filed with the commission and so we're in the process of working.

Through those requests.

We've done pretty well in the past on requests that we've made to the commission Paul can address that particularly.

Two two things here one is can you get the commission to approve those capital investments and the second is.

Can you execute on that and I think what we've shown over the last six seven years is that our capital execution has really ramped up dramatically. If you look back.

14, 2013, when we were only putting in capex of just over $100 million, obviously, we've done a lot with reengineering our process.

On the operations side on the contracting side and on the engineering side to allow us last year to invest almost $300 million and so moving from that number two three.

$363 65, and a couple of years I think it's very doable I think we know what we need to do to get to those numbers. The real question is the regulatory authorization and Paul I don't know if you have anything to add on that the only thing that I would say Tom is that.

Our ability to justify our capital projects at the commission has significantly improved over the past decade.

The kinds of capital projects that we are seeking approval from.

Approval of commission approval for are really the bread and butter types of utility projects that should for the most part really be non controversial. These are main replacement programs.

Treatment for chemicals.

System upgrades and the like and so while I don't expect that the commission will.

Give us the opportunity to have everything that we've asked for included in the rate case I do expect that we will be very successful in getting the vast majority of it.

And then I would just add.

And we spent a lot of time internally looking and trying to improve ourselves improve our our forecasting our planning our rate case preparation in our community and governmental affairs.

And we always tell people, we sit on a three legged barstool, one leg, we have customers and affordability.

The other leg, we have regulators would really have to look at reasonable net and then the third leg, we have stockholders, where we ought to consider a rate base growth dividend growth and book value growth and I think over the last decade, we've been able to keep that fairly balanced where we've been able to meet the needs.

So when you kind of Reengineered some of our capital planning and processes and we're doing the same thing going into 2022 and looking at how can we make it better.

Recruiting.

Okay.

Thank you guys.

Thanks, Ben Thanks have a good day.

And our next question is from Jonathan Reeder of Wells Fargo. Your line is open.

Hey, good morning, gentlemen.

Just kind of curious what happened to the intervenor testimony in the cost of capital I thought it had been do much.

Earlier in the month.

Haven't seen it posted.

Paul I can I can start.

I think what we had expected there was a pre hearing conference with the administrative law judge and a verbal agreement on our schedule and that verbal agreement had the intervenor testimony do I think it was on I want to say it was like Friday October 9th or.

Whatever that Friday was.

Because we suspect that because the schedule actually wasn't published so the scoping memo that would accompany.

It adopted schedule was never published that.

Ratepayer advocate chose to delay their testimony until such time as as that occurs and so we're in a bit of a holding mode. I assume they are ready to go with their testimony I assume that it's ready to hit print and send out but.

But they it sounds like are waiting for that actual scheduled to be adopted.

Okay, no clarity as to when that might be published.

Scoping memo gets published.

No Unfortunately not.

Waiting on the judge we've made enquiries, but.

The commission has lots of things in front of me right now judges are very busy.

And.

We're simply.

All of us waiting to see that scheduled come out.

Okay. So I guess from a model perspective, we shouldn't assume it has anything to do with settlement discussions may be going on where it can play an even.

Necessity intervenor testimony.

No no you should not not presume that we would not.

<unk> settlement until we saw their testimony and knew where where all the parties were.

And Paul I think as we put in the slides too we expect the cost of capital to be wrapped up by the sometime in the second quarter. So it is definitely delayed.

Definitely delayed as compare to the last cycle.

Yes.

Right, Okay, and then any updated thoughts on <unk> Governor Newsome might've point to lead the CPUC with.

Pleasant Badgers.

Imminent retirement.

You know nothing official yet obviously rumors are starting to fly a little bit but those are all unofficial.

So we are anxiously awaiting to see.

Obviously.

Our opinions and thoughts and we have shared those with the Governor's office.

But he ultimately we will make that appointment and I know they are actively working on it.

Slightly differently some of those named being tossed out or the rumors are they.

I know you guys have been advocating that.

Somebody with some good policy experience, maybe even on the water side directly.

It gets put on the commission.

Is that still a possibility at this juncture.

Yeah, Jonathan you always ask really good questions I can't speculate on.

On any of the rumors, but I will say it.

My last discussion what the Governor I would say he was he was he was honing in on the fact, you needed to get someone with good utility experience with maybe a decent policy background.

Yes.

Okay, Great no I appreciate that color and congrats on the good quarter.

And just to clarify that Jonathan Thats utility regulation experience.

Yep Okay.

Okay.

Thanks, Jonathan.

And again, if you have any questions at this time. Please press star one we'll pause for just a moment to see if there are any additional questions.

Yes.

And we have a question from Angie <unk> of Stifel. Your line is open.

Thank you.

Couple of.

Numbers question.

The bad debt provision falling.

Year over year.

I appreciate this disclosure, but what is roughly reflected in their rates and so.

Would be interested in the delta between what are you tracking now versus whats reflected in the rate.

We did look this up the California rate case has $1 9 million.

Bad debt.

I'm, sorry, I didn't look it up in the other states. So it's probably on the order of $2 million on an annual basis that would be covered in rates.

Okay.

And then unregulated earnings year to date.

Youll see the 10-Q the 10-Q later today.

Im not sure that there is any big movements in unregulated earnings for.

For the year as compared to the prior year I think it's about the same yes, theres been no change.

Yes, I see last year it was about.

One 4 million for the year, Okay, and then okay.

Oh, sorry, Andrew just to just to clarify one thing the way that we know book our pension costs.

Keep in mind that the regulated pension costs some that the non service portion of that pension cost is below the line for accounting purposes. So you may see a big difference in.

<unk>, but that does not represent a change in the profitability of the company.

Okay. Thank.

Thank you.

The last one the repair tax benefits.

I'm just looking at it in 2020, it added about just about $3 million.

How big of a benefit have you recorded year to date.

So so year to date the benefit is $92 million gross so that would be the gross deduction.

And.

It's also included in our rates in the regulatory side. So this year.

The actual repairs benefit will be slightly lower than the value that's in the.

Our rates.

Okay. So there is basically trying to solve for all of those.

Addition to the.

Basically net income derived from the rate base. So that is not a driver this year that's correct.

Not be additive this year in the prior year it was.

Okay Awesome and then.

Sorry that I'm going to numbers like that but for next year for 2022.

Without accounting for any changes in the ROE and the cost of debt.

Is it fair to say that given that it's the last year of the current rate cycle I should assume that there is some backfill.

<unk> versus the allowed ROE.

Again, given that causes the catching up and it just before that.

Set of revenue.

I think that if you look back in history, that's been a bit of the pattern that the highest roe or in the year.

The first test year in the California, ERC I think Theres a lot of other things going on obviously with the company and growth in other states and other.

Other types of items, so I don't know that it would necessarily be true. This time, but certainly the pattern in the past has been the stair step approach to earnings where the earnings are highest in that first year of the rate case, and then theyre very very flat from there on out.

Yes, I think I'd just add if we werent in a COVID-19 environment. We are in a normal operating environment, we would be telling people right now.

Third year of the rate case don't don't expect a whole lot because that's when we tend to see the regulatory lags start to kick in on some of the corporate expense items et cetera, it's probably blurred a little bit because of COVID-19. Our travel budgets have been about zero and we haven't been training sending people out to conferences and doing a lot of stuff that we normally do so it is a little.

Harder for us to see that but certainly the third year of the rate cases always the most difficult year of the three year cycle.

And then lastly.

The disclosure on.

The consolidated rate base, how much of this one point, it's 182 right how much of that 182 is outside of California.

I think that that number if you compare that to what we've asked for in the California rate case, it's about 100.

It's between 101 hundred $50 million in other in.

In the other states.

Okay.

<unk> hundred 10 last year, it's always something that is probably closer to that 150.

Angie Angie we have had investments in Texas for example, and we've been purchasing systems in Hawaii earlier in the year those are adding to rate base as well.

Okay, and then lastly, I mean, the I understand that we're still waiting for the filings of the intervenors.

But.

We're starting to hear some.

Some rumblings about.

The position of those intravenous is going to be and I think that we had all.

Hope that the cost of capital proceeding is going to be mostly about the true up of the cost of bumps.

It does not seem like that's the case there is some competition.

You mentioned that the allowed ROE for.

For water utilities in California are too high.

I don't know if again, if you can say anything given that we're still waiting for those essential positions would be.

We have not seen the testimony.

And we have heard rumors just like we've heard rumors about who may be the next chairman of the commission, but at this point, we really want to wait and see the positions in writing from.

Interveners and then we can make our decisions based on that.

Thank you guys. Thank you.

Thanks Angie.

Yes.

And again, if you have any question. Please press star one on your telephone keypad.

There are no further questions at this time I will now turn the call over back to Marty.

Great. Thanks Laurie.

Well that's it for the third quarter gang, thanks for hanging with us and asking good questions. We'll be around today. If anyone has any follow up feel free to reach out to Tom and he'll he'll get us all together.

It's hard to it's hard to label as we say and happy holidays to everyone that our next.

Thank you and this concludes today's conference call. Thank you for participating you may now disconnect.

Q3 2021 California Water Service Group Earnings Call

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