Essential Utilities, Inc. — Call Transcript 2025

Thank you for standing by and welcome to the Essential Utilities First Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press Star 1 on your touchstone phone, and to withdraw your question, please press Star 1 again. 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 will be a webcast of the event. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risk, uncertainties, and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10Q, 10K, and other SEC filings for a description of such risk 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. Mike Huwar, the President of our gas business, will provide an update on the gas business. Dan Schuller, our Chief Financial Officer, will provide an overview of the financial results before Chris closes the call and opens it up for questions. With that, I will turn it over to Chris Franklin. Hey, thanks, Brian, and good morning, everyone. Thanks for joining us today, and let's begin on slide five with some highlights. First, we posted strong results this quarter: $1.03 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-$2.11 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 that 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 and our share price for opportunities to continue using our ATM. You know, 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 PFAS 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. 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. 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 timelines 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 six, 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%-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've 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 its 140-year history. Many of you have told me you enjoy hearing from our segment president. Today, our gas segment president, Mike Huwar, is joining us. Mike's going to talk a little bit about some of our achievements and some of our ongoing initiatives. We'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 eight, 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-mi distribution system as we work to reduce risk and achieve constructive regulatory outcomes. Next, on slide nine, 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 counts 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 Peoples 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 rate-making 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, an 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 GW 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 present 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 Peoples 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. 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%, O&M flat, and earnings per share up 6.2%. Recall that last year's first quarter earnings per share included a 24% gain from the sale of the Pittsburgh area energy project. Let's dive into the waterfall slides to further review the drivers of this strong quarter and the comparisons 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 purchase 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 purchase 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. The other category reflects lower outside services costs and insurance expenses. On the EPS waterfall on slide 15, we see a 17% positive impact from rates and surcharges, an 8% increase due to higher volumes of gas reflecting normal weather this year, and a 2% pickup due to lower expenses. These increases were offset by lower water volume and other. For the quarter, other includes the prior year 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%-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%-20% of our annual earnings in each of these two quarters. As you will recall, the third quarter EPS is generally the lowest of the year. The fourth quarter should be between 20%-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-$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 22nd 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 $500,000 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, filed 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 multi-year approach in North Carolina three years ago, and we find that that works well for all of the stakeholders. 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 requisition 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. 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. 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 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. 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 base growth at about 6% and our regulated natural gas segment rate base growth to be at about 11%. Importantly, we are reaffirming our 5%-7% multi-year earnings per share guidance through 2027. As I've 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 PFAS 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 while we grow the dividend, and we'll keep the payout ratio at the same time at 60%-65%. 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. I'm very excited about the future of this company. With that, I'm going to conclude my formal remarks for the day, and we'll open up for questions. I'll send it back to the operator. Thank you. At this time, we will begin the question and answer session. To ask a question, you may press star one on your touch-tone phone. To withdraw your question, please press star one again. Our first question comes from the line of Julien Dumoulin-Smith from Jefferies. Please go ahead. Hey, this is Mark Ong for Julien. This is Mark. Congrats on a nice quarter. Thank you. Good morning. Morning. My first question is on equity issuance. We know two-thirds of the equity needs have been completed so far. Just given recent share price strengths, are you considering completing the remaining roughly $100 million equity ahead of second quarter? Maybe any thoughts on perhaps pulling forward a portion of 2026 equity needs? Thank you. Yeah, I appreciate the question. 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. As you know, we've got a relatively strong share price. When we can, we'll be in the market issuing shares in a way that does not dramatically impact the share price. Got it. That's very clear. Maybe if I can just pivot a little bit on the Texas rate case. I know as you are gearing up for your first Texas filings in roughly 20 years, just what level of revenue increase, ROE, and equity ratio are you targeting? I guess how should we set expectations around the case and 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. Thank you. Yeah. So that rate case, we have not filed it yet. We are looking to file it at the end of this month. That is our target at this point. You will see when we file that, you will see what that revenue ask is and also equity layer and ROE. I would say an equity layer and ROE, expect to see something consistent with what we ask for in our other states. 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. We try to be very, very accommodating to regulators when they need us to do things. We have done the same thing in Texas. Anytime you come in for rates after 20 years of being out, there is going to be some things to get over and figure out because we have not been in for so long. I would just say we will work really closely with Texas regulators to adjudicate that case. Certainly, there may be some things in that case that we will figure out as we go. Got it. That is very clear. And congrats again. Thank you. Yeah, thank you. Thank you. Our next question comes from the line of Durgesh Chopra from Evercore ISI. Please go ahead. Hey, Durgesh. Good morning, Durgesh. Good morning, Chris, and thank you for giving me. Hey, just a little bit more color. I'm just looking for some reaffirmation here. Looks like you started the year really strong in terms of EPS. When I sort of do some high-level math and take the midpoints of the ranges you have 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. 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? The strategy is to move costs from 2026 into 2025 and de-risk 2026? Maybe just talk to that as to how you are seeing that play out. Yeah. Yeah. Great question, Durgesh. I think that first point you made, right, that we're four months into the year here and the financials really only reflect the three months. It seems premature to do much in terms of adjustment of our guidance range. 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. Our thought was really just to wait and provide clarity really as the year goes on. Got it. Okay. I appreciate that commentary. I just kind of wanted to ask you on the EPA announcement here late April on PFAS. They 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. Thank you. Yeah. 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. The orders that we've received from them is full speed ahead, mitigate this, meet the timelines. We're still on our projected budget of $450 million. We'll be complete by 2028. 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. There is nothing we've seen from EPA or this administration that would suggest that we should slow in any way. We're full speed ahead. Got it. Thank you. Thank you. Thank you. Our next question comes from the line of Travis Miller from Morningstar. Please go ahead. Hey, Travis. Good morning, everyone. Thank you. Just a little follow-up there on the PFAS discussion. In terms of the financing, 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, the $55 million, if you get that? 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 that takes much more planning, permitting, and testing. 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 do not have exact numbers on the applications that are in right now, but we're happy to take that offline and get you some more numbers. Okay. And that'd be incremental to the $69 million, the $10 million, and the $59 million? Yes. Okay. Great. Of what we've already received. Okay. Okay. 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 on-site generation? We've heard a couple of gas companies talking about projects essentially behind the meter. Is that a supply source that you would 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 of Pennsylvania, has indicated there's 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. 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. Natural gas will play a huge part in that. is certainly latency within our system load factor that can be extrapolated to the benefit of customers, not only new customers, but our existing customers. There is also potential investment that we might look at with potential partners. We have a team that has been working on this for quite some time. We are 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. Okay. Great. I appreciate all the details. That's all I had. Thanks. Thank you, Travis. Thank you. Again, should you have a question, please press star followed by the number one. Our next question comes from the line of Gregg Orrill from UBS. Please go ahead. Hey, Gregg. Good morning, Gregg. Hey, good morning. 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? Kind of what sort of updates should we be looking for as the year progresses? 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. I would hesitate to present the timing of when we would announce any type of deal. As I mentioned, of the ones that we're looking at, they all come in various forms, shapes, and sizes. What we do know is that the speed-to-market influence is going to be really important for these developers. I would suggest that as we develop deals and sign deals, we would come to the table with those immediately. There's so many contributing factors to state government here in Pennsylvania has really got to play a major role as well. We think about site location, site readiness, in addition to everything that the company's doing to provide the adequate supply. Mike, I think the one you mentioned that got completed already is Bedford, right? Homer City. Homer City, I'm sorry. Homer City was. Yep. Yep. Yep. 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. It is hard to say what form these ultimately will take, let alone timing. Okay. Thanks. Thank you. Our last question comes from the line of Ryan Connors from Northcoast Research. Please go ahead. Hey, Ryan. Good morning. Morning. Yeah. So Dan, one for you, Dan. On the O&M expenses, it seemed like that was a big surprise for us. You mentioned the bad debt, kind of a good guy there. Can you kind of 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 will that tail off? That bad debt benefit that I mentioned, that will continue, meaning it does not get any better. It was sort of a one-time non-recurring item that is coming through the balance sheet here as a result of the conclusion of the Aqua Pennsylvania rate case. If we look and we had the same question, we looked end-to-end here and said, "If we did not have some of these one-time-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 and this year, you will come to about, call it, between 2.5% and 3%." I think our quick math gave us 2.8% or so there. That is what we think about O&M expenses. 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 2.5% is really our objective. Yeah. 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 too. That's next level, Ryan, for us, is really focusing on that lean approach and then seeing results over the next few years. Yeah. So I think as we talk about that, kind of probably this year and first part of next year, Ryan will be investing in that program and spending some money in order to get people trained up. Then beyond that, we'd look for some efficiencies to come out of that as really you've got the whole of the employee base looking at doing things efficiently, eliminating wastes, and taking action on those items. We're really excited about it. Got it. Got it. Now, Mike, one for you. 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. 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. 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? Yeah. 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 overturn it. I'm hopeful that there is a philosophy emerging here that will make this a little bit easier of a 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. 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 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. We need to make sure that deals like this get done in Pennsylvania for the water supply in this state. Got it. Thanks for the help. We'll definitely keep an eye on it. Thanks for your time. You got it. Yeah. Thank you. 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. As always, we stand ready to answer any of your follow-up questions. Look forward to hearing from you and have a great day. Thank you for joining today. You may now disconnect.

Speaker 5: Thank you for standing by and welcome to the Essential Utilities First Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press Star 1 on your touchstone phone, and to withdraw your question, please press Star 1 again. It is my pleasure to turn the call over to Mr. Brian Dingerdissen. You may begin. Thank you for standing by and welcome to the Essential Utilities First Quarter 2025 Earnings Conference Call. thank you for standing by and welcome to the essential utilities first quarter 2025 earnings conference call All lines have been placed on mute to prevent any background noise. all lines have been placed on mute to prevent any background noise After today's presentation, there will be an opportunity to ask a question. after today's presentation there will be an opportunity to ask a question To ask a question, you may press Star 1 on your touchstone phone, and to withdraw your question, please press Star 1 again. to ask a question you may press star 1 on your touchstone phone and to withdraw your question please press star 1 again It is my pleasure to turn the call over to Mr. Brian Dingerdissen. it is my pleasure to turn the call over to mr brian dingerdissen You may begin. you may begin

Speaker 10: 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 will be a webcast of the event. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risk, uncertainties, and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10Q, 10K, and other SEC filings for a description of such risk 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. Thank you. thank you Good morning, everyone, and thank you for joining us for our First Quarter 2025 Earnings Call. 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. 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 will be a webcast of the event. the slides will also be found there as will be a webcast of the event As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risk, uncertainties, and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. as a reminder some of the matters discussed during this call may include forward-looking statements that involve risk uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements Please refer to our most recent 10Q, 10K, and other SEC filings for a description of such risk and uncertainties. please refer to our most recent 10q 10k and other sec filings for a description of such risk and uncertainties During the course of this call, reference may be made to certain non-GAAP financial measures. 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. 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. Mike Huwar, the President of our gas business, will provide an update on the gas business. Dan Schuller, our Chief Financial Officer, will provide an overview of the financial results before Chris closes the call and opens it up for questions. With that, I will turn it over to Chris Franklin. We will begin the call with Chris Franklin, our Chairman and CEO, who will provide an update on the company. we will begin the call with chris franklin our chairman and ceo who will provide an update on the company Mike Huwar, the President of our gas business, will provide an update on the gas business. mike huwar the president of our gas business will provide an update on the gas business Dan Schuller, our Chief Financial Officer, will provide an overview of the financial results before Chris closes the call and opens it up for questions. dan schuller our chief financial officer will provide an overview of the financial results before chris closes the call and opens it up for questions With that, I will turn it over to Chris Franklin. with that i will turn it over to chris franklin

Speaker 7: Hey, thanks, Brian, and good morning, everyone. Thanks for joining us today, and let's begin on slide five with some highlights. First, we posted strong results this quarter: $1.03 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-$2.11 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. Hey, thanks, Brian, and good morning, everyone. hey thanks brian and good morning everyone Thanks for joining us today, and let's begin on slide five with some highlights. thanks for joining us today and let's begin on slide five with some highlights First, we posted strong results this quarter: $1.03 GAAP earnings per share, a 6% increase over last year's quarter results. first we posted strong results this quarter $1.03 gaap earnings per share a 6% increase over last year's quarter results Both our water and gas businesses performed well as expected. 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. 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-$2.11 versus last year's earnings of $1.97 per share on a non-GAAP basis. with those first quarter results we are reaffirming our 2025 earnings per share guidance range of $2.07-$2.11 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. 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. 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. through march 31 we've already invested $270.5 million in infrastructure improvements across our footprint Now, we previously announced that 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 and our share price for opportunities to continue using our ATM. You know, 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 PFAS 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, we previously announced that to support our growth and meet our credit metrics, we have begun to raise equity through our ATM program. now we previously announced that 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. so far this year we've issued approximately $210 million Throughout the year, we'll look at the market conditions and our share price for opportunities to continue using our ATM. throughout the year we'll look at the market conditions and our share price for opportunities to continue using our atm You know, it's always important to mention that our achievements go far beyond the financial results. you know 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. 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 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 PFAS work continues to be on time and on budget. our pfas 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. 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. 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, importantly for our customers, we expect to receive approximately $100 million in proceeds from the settlements from the polluters. now importantly for our customers we expect to receive approximately $100 million in proceeds from the settlements from the polluters 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. 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. 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. 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. 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. 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 timelines associated with rate cases in Ohio. We see this as a really positive development. 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. 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. 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. we'll keep you posted as developments occur 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. 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. 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 timelines associated with rate cases in Ohio. after the governor signs the legislation there will be new statutory timelines associated with rate cases in ohio We see this as a really positive development. 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 six, 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%-7% annual growth rate. And since we started providing annual guidance back in 2016, we have consistently met or exceeded market expectations. Also, in Virginia, legislation was passed to expand the water and wastewater infrastructure surcharge. 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. 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 six, 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. now slide six 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. 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%-7% annual growth rate. our earnings per share is consistently within a 5%-7% annual growth rate And since we started providing annual guidance back in 2016, we have consistently met or exceeded market expectations. 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've 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 its 140-year history. Many of you have told me you enjoy hearing from our segment president. Today, our gas segment president, Mike Huwar, is joining us. That consistent earnings growth has allowed us to continue to build on our over 30-year history of growing our dividend. 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. 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. 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've 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. since 2015 we've 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 its 140-year history. 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 its 140-year history Many of you have told me you enjoy hearing from our segment president. many of you have told me you enjoy hearing from our segment president Today, our gas segment president, Mike Huwar, is joining us. today our gas segment president mike huwar is joining us Mike's going to talk a little bit about some of our achievements and some of our ongoing initiatives. We'll touch a little bit on the data center activity happening in the region where we serve. Mike? Mike's going to talk a little bit about some of our achievements and some of our ongoing initiatives. mike's going to talk a little bit about some of our achievements and some of our ongoing initiatives We'll touch a little bit on the data center activity happening in the region where we serve. we'll touch a little bit on the data center activity happening in the region where we serve Mike? mike

Speaker 8: 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 eight, 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-mi distribution system as we work to reduce risk and achieve constructive regulatory outcomes. Next, on slide nine, 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. Thanks, Chris. 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. 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 eight, 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. as noted on slide eight 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. 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-mi distribution system as we work to reduce risk and achieve constructive regulatory outcomes. since the acquisition by essential the clear focus of our gas segment has been the increased safety and reliability of our 15,000-mi distribution system as we work to reduce risk and achieve constructive regulatory outcomes Next, on slide nine, I wanted to turn to an operational highlight with the Intelis meter program. next on slide nine 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. 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 counts in the coming years. The Intelis meters provide added safety features and increased protection of customers in the communities we serve. 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. 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. 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. 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. 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 counts in the coming years. as of now we are assessing a comprehensive program to install the intelis meters at nearly 700,000 customer counts 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 Peoples 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. We are extremely bullish on this effort as we work to be among the safest gas utilities in the United States. 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 Peoples rate case. 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 peoples rate case As with other utilities across the nation, Peoples Gas also experiences volatility in weather patterns and subsequently impact distribution revenues. 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. 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. 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 rate-making 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, an 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. Given the weather volatility, this type of alternative rate-making mechanism has proven to be valuable for the company and our customers. given the weather volatility this type of alternative rate-making 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. 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, an adjustment is reflected on the bill. when the weather is 3% colder than normal or 3% warmer than normal an 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. 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. 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. 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. 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 GW 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 present 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. As of today, we are in discussions with data center developers that represent up to 5 GW of needed power generation in the Pittsburgh region. as of today we are in discussions with data center developers that represent up to 5 gw 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 present an opportunity of robust and lower-cost power generation within the Peoples Gas footprint and across Pennsylvania. it's no secret that the vast natural gas resources within the marcellus and utica shale formations present 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. 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. 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 Peoples 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. With that, I will turn it to Dan for a review of the financials. 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. 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 Peoples 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. for peoples 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 With that, I will turn it to Dan for a review of the financials. with that i will turn it to dan for a review of the financials

Speaker 2: 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%, O&M flat, and earnings per share up 6.2%. Recall that last year's first quarter earnings per share included a 24% gain from the sale of the Pittsburgh area energy project. Let's dive into the waterfall slides to further review the drivers of this strong quarter and the comparisons 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 purchase gas costs, and higher regulated natural gas segment volumes were the primary revenue drivers. Thanks, Mike, and good morning, everyone. 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. 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%, O&M flat, and earnings per share up 6.2%. our quarterly performance was strong with revenues up 28% o&m flat and earnings per share up 6.2% Recall that last year's first quarter earnings per share included a 24% gain from the sale of the Pittsburgh area energy project. recall that last year's first quarter earnings per share included a 24% gain from the sale of the pittsburgh area energy project Let's dive into the waterfall slides to further review the drivers of this strong quarter and the comparisons to last year. let's dive into the waterfall slides to further review the drivers of this strong quarter and the comparisons to last year On slide 13, we have the revenue waterfall for the first quarter. 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. revenues increased 28% from $612.1 million a year ago to $783.6 million this year Additional revenues from regulatory recoveries, higher purchase gas costs, and higher regulated natural gas segment volumes were the primary revenue drivers. additional revenues from regulatory recoveries higher purchase 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 purchase 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. Of the roughly $67 million increase in regulatory recoveries, 2/3 is from gas and 1/3 is from water. of the roughly $67 million increase in regulatory recoveries 2/3 is from gas and 1/3 is from water Of the higher purchase gas costs, about half is due to volume and half is due to higher commodity prices. of the higher purchase 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 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. 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. 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. 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. The other category reflects lower outside services costs and insurance expenses. On the EPS waterfall on slide 15, we see a 17% positive impact from rates and surcharges, an 8% increase due to higher volumes of gas reflecting normal weather this year, and a 2% pickup due to lower expenses. These increases were offset by lower water volume and other. For the quarter, other includes the prior year 24% gain on sale from the Pittsburgh area energy projects, tax-related impact, and other items. 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. 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. 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. the decrease in bad debt primarily reflects the rate recovery of a regulatory asset tied to increased bad debt during covid The other category reflects lower outside services costs and insurance expenses. the other category reflects lower outside services costs and insurance expenses On the EPS waterfall on slide 15, we see a 17% positive impact from rates and surcharges, an 8% increase due to higher volumes of gas reflecting normal weather this year, and a 2% pickup due to lower expenses. on the eps waterfall on slide 15 we see a 17% positive impact from rates and surcharges an 8% increase due to higher volumes of gas reflecting normal weather this year and a 2% pickup due to lower expenses These increases were offset by lower water volume and other. these increases were offset by lower water volume and other For the quarter, other includes the prior year 24% gain on sale from the Pittsburgh area energy projects, tax-related impact, and other items. for the quarter other includes the prior year 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%-50% of annual EPS expected in the first quarter. The recovery of the regulatory asset I mentioned earlier was a portion of this outperformance. 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. 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. 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. 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. 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%-50% of annual EPS expected in the first quarter. for this year we see that the first quarter actual result was at the high end of the 40%-50% of annual eps expected in the first quarter The recovery of the regulatory asset I mentioned earlier was a portion of this outperformance. 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%-20% of our annual earnings in each of these two quarters. As you will recall, the third quarter EPS is generally the lowest of the year. The fourth quarter should be between 20%-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-$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. In the two middle quarters of the year, heating-related gas sales are normally light due to warm summer temperatures. in the two middle quarters of the year heating-related gas sales are normally light due to warm summer temperatures Thus, we expect 10%-20% of our annual earnings in each of these two quarters. thus we expect 10%-20% of our annual earnings in each of these two quarters As you will recall, the third quarter EPS is generally the lowest of the year. as you will recall the third quarter eps is generally the lowest of the year The fourth quarter should be between 20%-30% of our earnings as the gas business picks up going into winter. the fourth quarter should be between 20%-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-$2.11. we remain confident in our ability to meet our full-year earnings per share guidance range of $2.07-$2.11 While we're here, I do want to reiterate what Chris said about the equity needs for the year. 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'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. 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 22nd 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. Next, let's move to slide 17 to provide an update on regulatory activity. 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. 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 22nd for Aqua Pennsylvania following the Pennsylvania PUC approval of the recent rate case. new rates went into effect on february 22nd 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. 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. 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 $500,000 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, filed 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 multi-year approach in North Carolina three years ago, and we find that that works well for all of the stakeholders. With that, I'll turn it back over to Chris. Chris. 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 $500,000 in our natural gas subsidiary in Kentucky. 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 $500,000 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, filed 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. on april 30 2025 the company's regulated water and wastewater subsidiary in north carolina aqua north carolina filed 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 multi-year approach in North Carolina three years ago, and we find that that works well for all of the stakeholders. as a reminder we began using a multi-year approach in north carolina three years ago and we find that that works well for all of the stakeholders With that, I'll turn it back over to Chris. with that i'll turn it back over to chris Chris. chris

Speaker 7: All right, thanks, Dan. Let's move to slide 19 now. We'll touch briefly on our long-term growth requisition 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. 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. In January, we closed the acquisition of the Greenville wastewater utility assets, which serves approximately 2,300 customers in Greenville, Pennsylvania. All right, thanks, Dan. all right thanks dan Let's move to slide 19 now. let's move to slide 19 now We'll touch briefly on our long-term growth requisition strategy that, as you know, focuses on water and wastewater utility acquisitions. we'll touch briefly on our long-term growth requisition 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. 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. 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. we paid approximately $3 million for this relatively small system 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. 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 In January, we closed the acquisition of the Greenville wastewater utility assets, which serves approximately 2,300 customers in Greenville, Pennsylvania. 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 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. 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 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. 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. 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 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. our $276.5 million agreement to acquire delcora a pennsylvania sewer authority that serves approximately 198,000 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 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. 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 base growth at about 6% and our regulated natural gas segment rate base growth to be at about 11%. Importantly, we are reaffirming our 5%-7% multi-year earnings per share guidance through 2027. As I've 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 PFAS across our water systems, as well as our work to replace aging natural gas pipes. We continue to see a healthy pipeline of opportunities for additional growth, both on the water side as well as the gas business. 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%. 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 base growth at about 6% and our regulated natural gas segment rate base growth to be at about 11%. breaking this down a little bit further we anticipate our regulated water segment rate base growth at about 6% and our regulated natural gas segment rate base growth to be at about 11% Importantly, we are reaffirming our 5%-7% multi-year earnings per share guidance through 2027. importantly we are reaffirming our 5%-7% multi-year earnings per share guidance through 2027 As I've said before, this guidance does include acquisitions which are expected to close in 2025 and 2026 and excludes Delcora. as i've 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 PFAS across our water systems, as well as our work to replace aging natural gas pipes. of course this projection includes the crucial work that we're doing to remediate pfas 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 while we grow the dividend, and we'll keep the payout ratio at the same time at 60%-65%. 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. I'm very excited about the future of this company. With that, I'm going to conclude my formal remarks for the day, and we'll open up for questions. I'll send it back to the operator. By the way, our gas pipeline replacement work is expected to continue well beyond the next 10 years. 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 while we grow the dividend, and we'll keep the payout ratio at the same time at 60%-65%. now we will continue to maintain a strong balance sheet with a focus on continued improvement in our debt metrics while we grow the dividend and we'll keep the payout ratio at the same time at 60%-65% 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. 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 I'm very excited about the future of this company. i'm very excited about the future of this company With that, I'm going to conclude my formal remarks for the day, and we'll open up for questions. with that i'm going to conclude my formal remarks for the day and we'll open up for questions I'll send it back to the operator. i'll send it back to the operator

Speaker 5: Thank you. At this time, we will begin the question and answer session. To ask a question, you may press star one on your touch-tone phone. To withdraw your question, please press star one again. Our first question comes from the line of Julien Dumoulin-Smith from Jefferies. Please go ahead. Thank you. thank you At this time, we will begin the question and answer session. at this time we will begin the question and answer session To ask a question, you may press star one on your touch-tone phone. to ask a question you may press star one on your touch-tone phone To withdraw your question, please press star one again. to withdraw your question please press star one again Our first question comes from the line of Julien Dumoulin- Smith from Jefferies. our first question comes from the line of julien dumoulin- smith from jefferies Please go ahead. please go ahead

Speaker 6: Hey, this is Mark Ong for Julien. This is Mark. Congrats on a nice quarter. Hey, this is Mark Ong for Julien. hey this is mark ong for julien This is Mark. this is mark Congrats on a nice quarter. congrats on a nice quarter Thank you. Good morning. Thank you. thank you Good morning. good morning Morning. My first question is on equity issuance. We know two-thirds of the equity needs have been completed so far. Just given recent share price strengths, are you considering completing the remaining roughly $100 million equity ahead of second quarter? Maybe any thoughts on perhaps pulling forward a portion of 2026 equity needs? Thank you. Morning. morning My first question is on equity issuance. my first question is on equity issuance We know two-thirds of the equity needs have been completed so far. we know two-thirds of the equity needs have been completed so far Just given recent share price strengths, are you considering completing the remaining roughly $100 million equity ahead of second quarter? just given recent share price strengths are you considering completing the remaining roughly $100 million equity ahead of second quarter Maybe any thoughts on perhaps pulling forward a portion of 2026 equity needs? maybe any thoughts on perhaps pulling forward a portion of 2026 equity needs Thank you. thank you

Speaker 2: Yeah, I appreciate the question. 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. As you know, we've got a relatively strong share price. When we can, we'll be in the market issuing shares in a way that does not dramatically impact the share price. Yeah, I appreciate the question. yeah i appreciate the question 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. 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 As you know, we've got a relatively strong share price. as you know we've got a relatively strong share price When we can, we'll be in the market issuing shares in a way that does not dramatically impact the share price. when we can we'll be in the market issuing shares in a way that does not dramatically impact the share price

Speaker 6: Got it. That's very clear. Maybe if I can just pivot a little bit on the Texas rate case. I know as you are gearing up for your first Texas filings in roughly 20 years, just what level of revenue increase, ROE, and equity ratio are you targeting? I guess how should we set expectations around the case and 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. Thank you. Got it. got it That's very clear. that's very clear Maybe if I can just pivot a little bit on the Texas rate case. maybe if i can just pivot a little bit on the texas rate case I know as you are gearing up for your first Texas filings in roughly 20 years, just what level of revenue increase, ROE, and equity ratio are you targeting? i know as you are gearing up for your first texas filings in roughly 20 years just what level of revenue increase roe and equity ratio are you targeting I guess how should we set expectations around the case and outcome? i guess how should we set expectations around the case and outcome I know you mentioned some positive dynamics earlier in terms of future rate case, future test year. 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. just any color on that front would be helpful Thank you. thank you

Speaker 2: Yeah. So that rate case, we have not filed it yet. We are looking to file it at the end of this month. That is our target at this point. You will see when we file that, you will see what that revenue ask is and also equity layer and ROE. I would say an equity layer and ROE, expect to see something consistent with what we ask for in our other states. Yeah. yeah So that rate case, we have not filed it yet. We are looking to file it at the end of this month. That is our target at this point. You will see when we file that, you will see what that revenue ask is and also equity layer and ROE. so that rate case we have not filed it yet. we are looking to file it at the end of this month. that is our target at this point. you will see when we file that, you will see what that revenue ask is and also equity layer and roe I would say an equity layer and ROE, expect to see something consistent with what we ask for in our other states. i would say an equity layer and roe expect to see something consistent with what we ask for in our other states

Speaker 7: 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. We try to be very, very accommodating to regulators when they need us to do things. We have done the same thing in Texas. Anytime you come in for rates after 20 years of being out, there is going to be some things to get over and figure out because we have not been in for so long. I would just say we will work really closely with Texas regulators to adjudicate that case. Certainly, there may be some things in that case that we will figure out as we go. 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. We try to be very, very accommodating to regulators when they need us to do things. 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. we try to be very very accommodating to regulators when they need us to do things We have done the same thing in Texas. we have done the same thing in texas Anytime you come in for rates after 20 years of being out, there is going to be some things to get over and figure out because we have not been in for so long. anytime you come in for rates after 20 years of being out, there is going to be some things to get over and figure out because we have not been in for so long I would just say we will work really closely with Texas regulators to adjudicate that case. i would just say we will work really closely with texas regulators to adjudicate that case Certainly, there may be some things in that case that we will figure out as we go. certainly there may be some things in that case that we will figure out as we go

Speaker 6: Got it. That is very clear. And congrats again. Thank you. Got it. That is very clear. got it. that is very clear And congrats again. and congrats again Thank you. thank you

Speaker 2: Yeah, thank you. Yeah, thank you. yeah thank you

Speaker 5: Thank you. Our next question comes from the line of Durgesh Chopra from Evercore ISI. Please go ahead. Thank you. thank you Our next question comes from the line of Durgesh Chopra from Evercore ISI. our next question comes from the line of durgesh chopra from evercore isi Please go ahead. please go ahead

Speaker 7: Hey, Durgesh. Hey, Durgesh. hey durgesh

Speaker 2: Good morning, Durgesh. Good morning, Durgesh. good morning durgesh

Speaker 1: Good morning, Chris, and thank you for giving me. Hey, just a little bit more color. I'm just looking for some reaffirmation here. Looks like you started the year really strong in terms of EPS. When I sort of do some high-level math and take the midpoints of the ranges you have 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. 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? The strategy is to move costs from 2026 into 2025 and de-risk 2026? Maybe just talk to that as to how you are seeing that play out. Good morning, Chris, and thank you for giving me. good morning chris and thank you for giving me Hey, just a little bit more color. hey just a little bit more color I'm just looking for some reaffirmation here. i'm just looking for some reaffirmation here Looks like you started the year really strong in terms of EPS. looks like you started the year really strong in terms of eps When I sort of do some high-level math and take the midpoints of the ranges you have 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. when i sort of do some high-level math and take the midpoints of the ranges you have 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 Maybe just talk to that. 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? 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 The strategy is to move costs from 2026 into 2025 and de-risk 2026? the strategy is to move costs from 2026 into 2025 and de-risk 2026 Maybe just talk to that as to how you are seeing that play out. maybe just talk to that as to how you are seeing that play out

Speaker 2: Yeah. Yeah. Great question, Durgesh. I think that first point you made, right, that we're four months into the year here and the financials really only reflect the three months. It seems premature to do much in terms of adjustment of our guidance range. 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. Our thought was really just to wait and provide clarity really as the year goes on. Yeah. yeah Yeah. yeah Great question, Durgesh. great question durgesh I think that first point you made, right, that we're four months into the year here and the financials really only reflect the three months. i think that first point you made right that we're four months into the year here and the financials really only reflect the three months It seems premature to do much in terms of adjustment of our guidance range. it seems premature to do much in terms of adjustment of our guidance range 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. 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 Our thought was really just to wait and provide clarity really as the year goes on. our thought was really just to wait and provide clarity really as the year goes on

Speaker 1: Got it. Okay. I appreciate that commentary. I just kind of wanted to ask you on the EPA announcement here late April on PFAS. They 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. Thank you. Got it. got it Okay. okay I appreciate that commentary. i appreciate that commentary I just kind of wanted to ask you on the EPA announcement here late April on PFAS. i just kind of wanted to ask you on the epa announcement here late april on pfas They kind of announced specific targeted actions. they 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. 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 Thank you. thank you

Speaker 7: Yeah. 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. The orders that we've received from them is full speed ahead, mitigate this, meet the timelines. We're still on our projected budget of $450 million. We'll be complete by 2028. 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. There is nothing we've seen from EPA or this administration that would suggest that we should slow in any way. We're full speed ahead. Yeah. yeah Durgesh, we're full speed ahead. 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. i've mentioned on previous calls that we've sat with regulators both economic and environmental regulators in our key states The orders that we've received from them is full speed ahead, mitigate this, meet the timelines. the orders that we've received from them is full speed ahead mitigate this meet the timelines We're still on our projected budget of $450 million. we're still on our projected budget of $450 million We'll be complete by 2028. we'll be complete by 2028 There is no hesitation here at all. 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'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. 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 There is nothing we've seen from EPA or this administration that would suggest that we should slow in any way. there is nothing we've seen from epa or this administration that would suggest that we should slow in any way We're full speed ahead. we're full speed ahead

Speaker 1: Got it. Thank you. Got it. got it Thank you. thank you

Speaker 7: Thank you. Thank you. thank you

Speaker 5: Thank you. Our next question comes from the line of Travis Miller from Morningstar. Please go ahead. Thank you. thank you Our next question comes from the line of Travis Miller from Morningstar. our next question comes from the line of travis miller from morningstar Please go ahead. please go ahead

Speaker 7: Hey, Travis. Hey, Travis. hey travis

Speaker 11: Good morning, everyone. Thank you. Just a little follow-up there on the PFAS discussion. In terms of the financing, 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, the $55 million, if you get that? Good morning, everyone. good morning everyone Thank you. thank you Just a little follow-up there on the PFAS discussion. just a little follow-up there on the pfas discussion In terms of the financing, got those numbers that you were talking about. in terms of the financing 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, the $55 million, if you get that? 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 the $55 million if you get that

Speaker 7: 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 that takes much more planning, permitting, and testing. 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 do not have exact numbers on the applications that are in right now, but we're happy to take that offline and get you some more numbers. I would say that the spend in Pennsylvania is still largely to come. 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 that takes much more planning, permitting, and testing. we have not spent much because in pennsylvania we have some larger plants that need mitigation and that takes much more planning permitting and testing Travis, most of that spend is yet to come. 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 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. 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 do not have exact numbers on the applications that are in right now, but we're happy to take that offline and get you some more numbers. i do not have exact numbers on the applications that are in right now but we're happy to take that offline and get you some more numbers

Speaker 11: Okay. And that'd be incremental to the $69 million, the $10 million, and the $59 million? Okay. okay And that'd be incremental to the $69 million, the $10 million, and the $59 million? and that'd be incremental to the $69 million the $10 million and the $59 million

Speaker 7: Yes. Yes. yes

Speaker 11: Okay. Great. Okay. okay great Great. okay great

Speaker 7: Of what we've already received. Of what we've already received. of what we've already received

Speaker 11: Okay. Okay. 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 on-site generation? We've heard a couple of gas companies talking about projects essentially behind the meter. Is that a supply source that you would think about, or are we just talking about more distribution volume? Okay. okay Okay. okay A question for Mike, data centers. a question for mike data centers I'm sure you weren't surprised that there would be a question on 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 on-site generation? 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 on-site generation We've heard a couple of gas companies talking about projects essentially behind the meter. we've heard a couple of gas companies talking about projects essentially behind the meter Is that a supply source that you would think about, or are we just talking about more distribution volume? is that a supply source that you would think about or are we just talking about more distribution volume

Speaker 8: Thank you for the question. I mean, I think it's a variety of things. I think Team Pennsylvania, the economic development entity of Pennsylvania, has indicated there's 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. 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. Natural gas will play a huge part in that. Thank you for the question. thank you for the question I mean, I think it's a variety of things. i mean i think it's a variety of things I think Team Pennsylvania, the economic development entity of Pennsylvania, has indicated there's somewhere around 72 projects in various forms of development. i think team pennsylvania the economic development entity of pennsylvania has indicated there's 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. 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. 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 Of the projects that we're currently in discussions with, it's very clear that there are different approaches to how this might happen. 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. 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 Natural gas will play a huge part in that. natural gas will play a huge part in that is certainly latency within our system load factor that can be extrapolated to the benefit of customers, not only new customers, but our existing customers. There is also potential investment that we might look at with potential partners. We have a team that has been working on this for quite some time. We are 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. is certainly latency within our system load factor that can be extrapolated to the benefit of customers, not only new customers, but our existing customers. is certainly latency within our system load factor that can be extrapolated to the benefit of customers not only new customers but our existing customers There is also potential investment that we might look at with potential partners. there is also potential investment that we might look at with potential partners We have a team that has been working on this for quite some time. We are 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. we have a team that has been working on this for quite some time. we are 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

Speaker 11: Okay. Great. I appreciate all the details. That's all I had. Thanks. Okay. okay Great. great I appreciate all the details. i appreciate all the details That's all I had. that's all i had Thanks. thanks

Speaker 8: Thank you, Travis. Thank you, Travis. thank you travis

Speaker 5: Thank you. Again, should you have a question, please press star followed by the number one. Our next question comes from the line of Gregg Orrill from UBS. Please go ahead. Thank you. thank you Again, should you have a question, please press star followed by the number one. again should you have a question please press star followed by the number one Our next question comes from the line of Gregg Orrill from UBS. our next question comes from the line of gregg orrill from ubs Please go ahead. please go ahead

Speaker 7: Hey, Gregg. Hey, Gregg. hey gregg

Speaker 8: Good morning, Gregg. Good morning, Gregg. good morning gregg

Speaker 9: Hey, good morning. 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? Kind of what sort of updates should we be looking for as the year progresses? Hey, good morning. hey good morning Congratulations. 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. 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? how do you see that evolving When do you think those discussions would reach terms of agreements? when do you think those discussions would reach terms of agreements Kind of what sort of updates should we be looking for as the year progresses? kind of what sort of updates should we be looking for as the year progresses

Speaker 8: 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. I would hesitate to present the timing of when we would announce any type of deal. As I mentioned, of the ones that we're looking at, they all come in various forms, shapes, and sizes. I appreciate that question. 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. 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. 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. 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. 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. the unique potential of where individuals would locate data centers is something that we continue to look at a really strong robust delivery system I would hesitate to present the timing of when we would announce any type of deal. i would hesitate to present the timing of when we would announce any type of deal As I mentioned, of the ones that we're looking at, they all come in various forms, shapes, and sizes. as i mentioned of the ones that we're looking at they all come in various forms shapes and sizes What we do know is that the speed-to-market influence is going to be really important for these developers. I would suggest that as we develop deals and sign deals, we would come to the table with those immediately. What we do know is that the speed-to-market influence is going to be really important for these developers. what we do know is that the speed-to-market influence is going to be really important for these developers I would suggest that as we develop deals and sign deals, we would come to the table with those immediately. i would suggest that as we develop deals and sign deals we would come to the table with those immediately

Speaker 7: There's so many contributing factors to state government here in Pennsylvania has really got to play a major role as well. We think about site location, site readiness, in addition to everything that the company's doing to provide the adequate supply. Mike, I think the one you mentioned that got completed already is Bedford, right? There's so many contributing factors to state government here in Pennsylvania has really got to play a major role as well. there's so many contributing factors to state government here in pennsylvania has really got to play a major role as well We think about site location, site readiness, in addition to everything that the company's doing to provide the adequate supply. we think about site location site readiness in addition to everything that the company's doing to provide the adequate supply Mike, I think the one you mentioned that got completed already is Bedford, right? mike i think the one you mentioned that got completed already is bedford right

Speaker 8: Homer City. Homer City. homer city

Speaker 7: Homer City, I'm sorry. Homer City, I'm sorry. homer city i'm sorry

Speaker 8: Homer City was. Homer City was. homer city was

Speaker 7: Yep. Yep. Yep. 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. It is hard to say what form these ultimately will take, let alone timing. Yep. yep Yep. yep Yep. yep We have had some successes here in Pennsylvania. 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. 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. sort of like we've done gregg with the energy products that we sold last year Those are always a possibility. those are always a possibility It is hard to say what form these ultimately will take, let alone timing. it is hard to say what form these ultimately will take let alone timing

Speaker 9: Okay. Thanks. Okay. okay Thanks. thanks

Speaker 5: Thank you. Our last question comes from the line of Ryan Connors from Northcoast Research. Please go ahead. Thank you. thank you Our last question comes from the line of Ryan Connors from Northc oast Research. our last question comes from the line of ryan connors from northc oast research Please go ahead. please go ahead

Speaker 7: Hey, Ryan. Hey, Ryan. hey ryan Good morning. Good morning. good morning

Speaker 3: Morning. Yeah. So Dan, one for you, Dan. On the O&M expenses, it seemed like that was a big surprise for us. You mentioned the bad debt, kind of a good guy there. Can you kind of 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 will that tail off? Morning. morning Yeah. yeah So Dan, one for you, Dan. so dan one for you dan On the O&M expenses, it seemed like that was a big surprise for us. on the o&m expenses it seemed like that was a big surprise for us You mentioned the bad debt, kind of a good guy there. you mentioned the bad debt kind of a good guy there Can you kind of 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? can you kind of 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 will that tail off? is that bad debt benefit going to continue or will that tail off

Speaker 2: That bad debt benefit that I mentioned, that will continue, meaning it does not get any better. It was sort of a one-time non-recurring item that is coming through the balance sheet here as a result of the conclusion of the Aqua Pennsylvania rate case. If we look and we had the same question, we looked end-to-end here and said, "If we did not have some of these one-time-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 and this year, you will come to about, call it, between 2.5% and 3%." I think our quick math gave us 2.8% or so there. That is what we think about O&M expenses. That bad debt benefit that I mentioned, that will continue, meaning it does not get any better. that bad debt benefit that i mentioned that will continue meaning it does not get any better It was sort of a one-time non-recurring item that is coming through the balance sheet here as a result of the conclusion of the Aqua Pennsylvania rate case. it was sort of a one-time non-recurring item that is coming through the balance sheet here as a result of the conclusion of the aqua pennsylvania rate case If we look and we had the same question, we looked end-to-end here and said, "If we did not have some of these one-time-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 and this year, you will come to about, call it, between 2.5% and 3%." I think our quick math gave us 2.8% or so there. if we look and we had the same question we looked end-to-end here and said "if we did not have some of these one-time-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 and this year, you will come to about call it between 2.5% and 3%." i think our quick math gave us 2.8% or so there That is what we think about O&M expenses. that is what we think about o&m expenses 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 2.5% is really our objective. 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 2.5% is really our objective. 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 2.5% is really our objective

Speaker 7: Yeah. 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 too. That's next level, Ryan, for us, is really focusing on that lean approach and then seeing results over the next few years. Yeah. yeah 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 too. 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 too That's next level, Ryan, for us, is really focusing on that lean approach and then seeing results over the next few years. that's next level ryan for us is really focusing on that lean approach and then seeing results over the next few years

Speaker 2: Yeah. So I think as we talk about that, kind of probably this year and first part of next year, Ryan will be investing in that program and spending some money in order to get people trained up. Then beyond that, we'd look for some efficiencies to come out of that as really you've got the whole of the employee base looking at doing things efficiently, eliminating wastes, and taking action on those items. We're really excited about it. Yeah. yeah So I think as we talk about that, kind of probably this year and first part of next year, Ryan will be investing in that program and spending some money in order to get people trained up. so i think as we talk about that kind of probably this year and first part of next year ryan will be investing in that program and spending some money in order to get people trained up Then beyond that, we'd look for some efficiencies to come out of that as really you've got the whole of the employee base looking at doing things efficiently, eliminating wastes, and taking action on those items. then beyond that we'd look for some efficiencies to come out of that as really you've got the whole of the employee base looking at doing things efficiently eliminating wastes and taking action on those items We're really excited about it. we're really excited about it

Speaker 3: Got it. Got it. Now, Mike, one for you. Has the company disclosed a rate base dollar value associated with that Intelis meter rollout? Got it. got it Got it. got it Now, Mike, one for you. it now mike one for you Has the company disclosed a rate base dollar value associated with that Intelis meter rollout? has the company disclosed a rate base dollar value associated with that intelis meter rollout

Speaker 8: No, we have not at this point. No. No, we have not at this point. no we have not at this point No. no

Speaker 3: 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. 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. 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? No. no Okay. okay Got it. got it Okay. okay And then lastly, Chris, I wanted to just get your take on the Beaver Falls. 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 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. i mean you reached a settlement oca was on board and then you get an adverse recommendation from the alj Just curious what you can give us your take on that. 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. why we seem to continue to see these alj decisions go sometimes the wrong way Also, when do you think we could expect to see Beaver Falls actually come before the PUC? 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? could it be as soon as this month or would it be further out than that

Speaker 7: Yeah. 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 overturn it. I'm hopeful that there is a philosophy emerging here that will make this a little bit easier of a 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. 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 a primary example of a troubled system that needs assistance. The mayor came back, lowered her price. Yeah. yeah All good questions, Ryan. 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 overturn it. 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 overturn it I'm hopeful that there is a philosophy emerging here that will make this a little bit easier of a process because I think in some cases, that's what it is. i'm hopeful that there is a philosophy emerging here that will make this a little bit easier of a process because i think in some cases that's what it is It's a philosophy. it's a philosophy Now, I do think given the settlement negotiated, I do think we have a favorable chance at the commission level. 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. we expect this to be on an agenda in june this year so about a month away maybe Listen, we're hopeful. 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. we're going to do all the work and we've done all of our filings and everything to support this case This is a primary example of a troubled system that needs assistance. this is a primary example of a troubled system that needs assistance The mayor came back, lowered her price. 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. We need to make sure that deals like this get done in Pennsylvania for the water supply in this state. We're taking a little bit of goodwill. we're taking a little bit of goodwill The OCA got comfortable with it. the oca got comfortable with it This is one that should get done. this is one that should get done We need to make sure that deals like this get done in Pennsylvania for the water supply in this state. we need to make sure that deals like this get done in pennsylvania for the water supply in this state

Speaker 3: Got it. Thanks for the help. We'll definitely keep an eye on it. Thanks for your time. Got it. got it Thanks for the help. thanks for the help We'll definitely keep an eye on it. we'll definitely keep an eye on it Thanks for your time. thanks for your time

Speaker 7: You got it. You got it. you got it

Speaker 2: Yeah. Thank you. Yeah. yeah Thank you. thank you

Speaker 5: This concludes our question and answer session. I will now turn the call over back to Mr. Chris for closing remarks. This concludes our question and answer session. this concludes our question and answer session I will now turn the call over back to Mr. Chris for closing remarks. i will now turn the call over back to mr chris for closing remarks

Speaker 7: Thanks, everyone, for joining us this morning. As always, we stand ready to answer any of your follow-up questions. Look forward to hearing from you and have a great day. Thanks, everyone, for joining us this morning. thanks everyone for joining us this morning As always, we stand ready to answer any of your follow-up questions. as always we stand ready to answer any of your follow-up questions Look forward to hearing from you and have a great day. look forward to hearing from you and have a great day

Speaker 5: Thank you for joining today. You may now disconnect. Thank you for joining today. thank you for joining today You may now disconnect. you may now disconnect