Good day, and welcome to the Essential Utilities Inc. Q3 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brian Dingerdissen. Please go ahead, sir.

Thank you, Lauren. Good morning, everyone, and thank you for joining us for Essential Utilities Third Quarter Earnings Call. I am Brian Dingerdissen, Vice President and Head of Investor Relations. If you did not receive a copy of the press release, you can find it by visiting the Investor Relations section of our website at essential.co. The slides that we will be referencing and the webcast of this event can also be found on our website. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risks, uncertainties, and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10-Q, 10-K, and other SEC filings for a description of such risks and uncertainties. During the course of this call, reference may be made to certain non-GAAP financial measures. A reconciliation of these non-GAAP to GAAP financial measures is included at the end of the presentation and also posted in the Investor Relations section of the company's website. Here's our agenda for the call today. We will start with Chris Franklin, our Chairman and CEO, who will discuss the third quarter highlights and provide a company update. Next, Dan Schuller, our CFO, will discuss our financial results. Chris will then provide an update on our growth strategy, the municipal water and wastewater acquisition program, and conclude the presentation portion before opening the call for questions. With that, I will turn the call over to Chris Franklin.

Thanks, Brian, and good morning, everyone. Thanks for joining us. Let me start the call today with a thank you. Thank you to many of you who took the time to participate in our recent investor perception study. We conduct that survey about every other year, and it helps us provide another perspective, overall perspective if you will, from investors which supplements what we hear from all of you and our amount of about 300-plus meetings with investors throughout each year. We really appreciate the strong confidence that you expressed in management and in the work we're doing in that survey, especially around municipal acquisitions. I do want to bring clarity though to one issue where there seems to be some ambiguity in the minds of at least a few investors about how we think about our work in natural gas. First, we're really proud of the work and the results our natural gas team is achieving. Our careful study of the market indicates that natural gas, especially in our key service area of Pittsburgh, Pennsylvania, will be an important part of the energy mix for probably decades to come. In less than 15 years, we will be at least 60% of the way toward our aspirational goal of net zero emissions. So listen, we acknowledge the fact that natural gas utilities are currently achieving suboptimal trading multiples in the public markets. This is despite the very high private market multiples achieved in recent natural gas company transactions. But with these things in mind, I want to be really crystal clear. Growth through acquisition in natural gas is not in our strategy. Our strategy in natural gas is to replace the nearly 3,000 miles of gas main to improve safety, reliability, and the environment while generating the associated earnings per share. We go one step further; our strategy is keenly focused on growing our water business through acquisition, and we have a very successful track record in doing this already. Hopefully, you’ll agree. I hope this clears any ambiguity that existed in the market around our growth strategy. All right. With that, let's take a quick look at the third quarter highlights. The water and gas teams have been focused and working hard on infrastructure improvements. We are on pace to replace about 180 miles of water main this year and about 175 miles of gas main this year. On a combined basis, that's water and natural gas. We've invested about $676 million in infrastructure improvements throughout our systems in just the first nine months of this year as compared to about $608 million for the same period last year, and we remain on track to spend about $1 billion in capital on infrastructure this year. Our heavy work on infrastructure improvements generated a busy year for our regulatory people as well. We had rate activity in two of our three natural gas states and seven out of our eight water states, including the filing of our Pennsylvania water rate case back in August. Dan is going to give you a little bit more details on that in just a moment. Our municipal acquisition strategy remains strong as we announced the closing of the Village of Bourbon A in Illinois, and we added Beaver Falls, a wastewater system in Pittsburgh to our growing list of pending acquisitions. In total, we've closed two acquisitions this year and have seven pending acquisitions. These nine acquisitions total over $500 million in purchase price. I'm also pleased to announce that we were celebrated as a champion of Board diversity by The Forum of Executive Women. We were also recognized for our recently published ESG report with multiple awards; our team did a really nice job. If you haven't had a chance to look at it, it's really worth a look. This is the third time we've received the Champion of Board diversity honor, which is awarded to the top public companies in our region with 30% or more women on their respective boards. This is really important work to us, and we're very proud of that. We remain focused on reducing the company's carbon footprint. We've already made significant progress toward our goal by replacing hundreds of miles of leak-prone gas pipe and by significantly increasing our use of renewable energy for our power needs. You've heard this before, but our public commitment to reduce our greenhouse gas emissions by 60% before 2035 from a 2019 baseline has already produced a 5% reduction in the first year of our commitment. Under our ESG banner, we are evaluating initiatives in renewable natural gas or RNG, responsibly sourced gas or RSG, and hydrogen. We currently procure RNG from about six landfills and are looking for other opportunities to take RNG, including into our distribution system for our utility customers. We're also working with an engineering firm to evaluate RNG facilities at some of our wastewater treatment plants, allowing synergies to be realized between our water and gas businesses. As part of our increased focus on RNG, we recently joined the RNG coalition, which is an industry organization that advocates and educates for the sustainable development, deployment, and utilization of RNG. And finally, we're having discussions with several potential partners regarding hydrogen pilots and hope to provide more details on a future earnings call as those concepts develop. I encourage all of you to review our again award-winning Essential 2020 ESG report, which highlights some of these environmental initiatives, along with several other initiatives. All right. Let's turn to a key operational challenge we faced, resulting from Hurricane Ida. Just before Labor Day weekend, Hurricane Ida made its way through Southeastern Pennsylvania and poured nearly eight inches of rain in six hours on two of our key surface water treatment plants. To put that storm event in perspective, that's 20% of the annual rainfall we would normally expect in this region fell in six hours. This sustained heavy rainfall in the Pickering and our only Creek watersheds resulted in record flooding in the Philadelphia region, which made national news. The picture you see here is an aerial view of our Pickering West water treatment facility submerged from the storm. This is the largest plant in our fleet. At the height of the storm, we had to shut down the power and abandon this plant. If our team had stayed, they might have drowned in the eight feet of water that filled their offices. Immediately after the storm subsided, a cross-functional team of managers, employees, and contractors worked around the clock to optimize our other plants because we needed to bring water into this area, restore the damaged plants, and also communicate with our customers. Our Ford County interconnected system allowed us to adjust our water distribution system to compensate for the loss of approximately 40% of our drinking water supply, which normally comes from the plant you see underwater here. Without the redundancy of our system, maintaining service to our customers would have been impossible, and that's where our long-term planning really showed. We were pleased to maintain service for all of our customers with only a few isolated low-pressure issues. Now a storm like Ida raises some important issues and questions for us and for other utilities for that matter. Questions like how would a smaller water utility respond to an event of this magnitude, especially a utility that does not have the level of resources or expertise that we have? Another question is, will events like this cause even more smaller water and wastewater utilities to consider exiting the business just because of the capital costs and other constraints to overcome these types of issues? Should we expect more extreme weather like this with climate change? That's a big question for all utilities. Finally, how much capital will we need to address issues like this one at our Aqua and at other utilities across the country? These are important questions that we'll have to grapple with. Now on the next slide, I just want to point out the pictures here; you can see the damage and the team. I'd be remiss if I didn't point out that it was the efforts of our workforce and their dedication to our customers that got our plants back online and allowed us to maintain service throughout that challenging time. I am really proud and honored to be part of such a resilient team, and to say they did a great job would simply be an understatement. We have a long list of lessons learned from this incident and are well into the planning necessary to overcome these challenges in the future. All right. Let's shift gears into the financials, and I'm going to pass the call along to Dan. Dan?

Thanks, Chris, and good morning, everyone. Before we dive into our results, I want to address a potential question regarding our insurance. We have coverage in place to help manage the effects of a storm event like Ida, and while it's not guaranteed, we will seek to recover any storm-related expenses not covered by this insurance. That said, the results I’ll discuss next include the impact of voluntary conservation measures as well as the additional costs stemming from Ida. Furthermore, we anticipate that any significant changes related to the Pickering treatment plant will be incorporated into future capital plans. Now, let’s start with the financial highlights from the third quarter. We concluded the third quarter with revenues of $361.9 million, which is approximately a 3.8% increase from the previous year. Our regulated water segment contributed $259.9 million while our regulated natural gas segment added $94.8 million. Operation and maintenance expenses rose by 2.3% to $139.4 million this quarter, compared to $136.2 million in the same quarter last year. Net income dropped year-over-year from $55.7 million to $50.5 million, and GAAP earnings per share fell from $0.22 to $0.19. Next, we'll review the details concerning revenue. When we analyze the $13.2 million revenue increase in the third quarter of 2021, the main contributors were purchased gas, which added $8.7 million, and rates and surcharges that brought in $8.2 million. Revenue growth from our regulated water segment, along with other factors, contributed an additional $6.9 million. However, these increases were offset by reduced volume, leading to a $9.6 million decline in our water segment and about a $1 million reduction in our gas segment. Overall, we saw reduced water consumption in seven of our eight water states due to weather conditions, shifting back to post-COVID norms, and conservation efforts associated with Hurricane Ida in Pennsylvania. I’d like to take a moment to address the impact of rising natural gas prices. Though heating degree days this third quarter were lower compared to the same period in 2020, gas prices have risen significantly over the past year, as reported in the news. Because of higher gas commodity costs, we expect that our average customer bill for the winter heating season of 2021-2022 will be roughly 25% higher than last winter. However, it's important to highlight a few points. Prior to the recent surge in gas costs, the commodity represented around 20% of a typical Peoples customer’s bill. Even with the current increases, the expected amount still falls significantly short of the record highs observed in 2008 when the average annual bill reached about $1,800. Additionally, we have about 47% of our winter gas requirements already stored, much of it purchased at significantly lower prices than current market rates, which helps mitigate the impact of rising commodity prices. Finally, I want to note that the prices we pay for natural gas are consistently less than NYMEX rates due to the price differences between NYMEX and local Marcellus Basin pricing, which gives us a genuine advantage in sourcing and supplying natural gas locally. Now, let’s take a closer look at water usage trends by customer class. We want to update you on water consumption patterns as more people return to pre-COVID lifestyles. For the third quarter, water usage decreased by 5.2% compared to last year, reverting to the 2019 level of around 19 billion gallons. The ongoing trend of businesses reopening and customers returning to work, along with weather influences and conservation measures in Pennsylvania due to Hurricane Ida, resulted in an 8.1% drop in residential usage, while commercial usage saw a 2.8% increase compared to the same period in 2020. Historically, in the water industry, we have noticed a natural decline of about 1% per year as customers update older appliances and fixtures. Our operation and maintenance expenses were $139.4 million for the third quarter, reflecting a 2.3% rise from $136.2 million in the same period last year. The primary contributor to this increase was employee-related costs amounting to $6.8 million this quarter, which included $1.7 million in rising medical costs, along with pension and regular employee expenses. Similar to the previous quarter, the increase in medical expenses was anticipated as many individuals resumed non-emergency medical visits. Other factors, including expenses related to Hurricane Ida, added $3.8 million, and growth in production costs for the regulated water segment contributed another $1.9 million. However, these increases were balanced by a reduction of nearly $9.4 million in COVID-19 costs compared to Q3 2020, when we faced substantial bad debt and offered one-time bonuses to non-management employees. We're beginning to see some inflation-related cost increases, particularly in fuel, chemicals, and insurance, which we are accounting for in our 2022 budget. Next, let’s review the earnings per share details. GAAP EPS for the third quarter decreased by $0.03 from $0.22 in 2020 to $0.19 this year. As we noted in the last call, we expected this quarter's results to be on the lower end of the range we provided for Q3 earlier in the year. Rates and surcharges contributed $0.022 to EPS, while the Q3 2020 rate credits provided another $0.011 and growth from our regulated water segment contributed $0.04. These positive contributions were offset by O&M costs of $0.028 and lower volume from both our regulated water and gas segments combining for a reduction of $0.029, plus another $0.05 from various factors, leading us to a GAAP EPS of $0.19 for the third quarter of 2021. For the entire year, assuming normal weather conditions, we expect our earnings per share to fall around the midpoint of our previously stated guidance range of $1.64 to $1.69. Moving on to rate activity and additional matters, we've successfully completed rate cases or surcharges in seven out of our eight water states in 2021, generating a total annualized revenue of $31 million. In our regulated natural gas segment, we have also finalized rate case or surcharge filings in Pennsylvania and Kentucky, which brought in an additional annualized revenue of $1.3 million. Presently, we are working on base rate cases for our regulated water segment subsidiaries in Ohio and Pennsylvania and for one regulated natural gas subsidiary in Kentucky, known as Delta Natural Gas. As many of you are aware, we filed the rate case for our Aqua Pennsylvania subsidiary in August, adhering to the three-year rate case cycle we previously outlined. The primary reason for this filing is the $1.1 billion investment made since the last rate case to replace over 400 miles of aging water mains, associated valves, services, and hydrants throughout Aqua Pennsylvania’s distribution system, consisting of approximately 5,800 miles. This includes upgrades to wastewater treatment plants, PFAS and PFOA filters, and our new Pinar laboratory. Such investments enable us to uphold our long-standing commitment to provide safe drinking water to our customers and to return treated wastewater to the environment. A notable aspect of this filing is the request for the inaugural water-focused universal services program in Pennsylvania, which we were asked to submit as part of our settlement regarding the Peoples acquisition. We look forward to implementing this program as a significant means of supporting our low-income water and wastewater customers. While we may be perceived as serving primarily suburban clients, around 10% of our water and wastewater customers in Pennsylvania actually live below the federal poverty line. Regarding the timeline, direct testimony is due by November 10th, and we have evidentiary hearings scheduled before the holidays. We anticipate that new rates will be effective by May 2022. Now, I will hand it back over to Chris.

Great. Thanks, Dan. Let's talk a little bit about our status of municipal transactions. And you can see on this slide that during the quarter, we announced the closing of the Village of Bourbon A. This wastewater system serves about 6,500 customers in Kankakee County, Illinois. Then in October, we announced the signing of an asset purchase agreement with Beaver Falls, and this was a wastewater system in the Pittsburgh area, which serves about 7,600 customer equivalents. This one is important because it gives us a water foothold in Western Pennsylvania in addition to our already strong gas platform in that same area. So it's an important one for us. Now as of this call, we've signed seven asset purchase agreements and they're all pending, which will add over 234,000 customers or customer equivalents and a total of $468 million in purchase price. These seven pending transactions, plus the two closed transactions, will add over 241,000 customers or customer equivalents, again, and a total of over $500 million in combined purchase price. We remain confident that we will close the DELCORA transaction, the litigation with Delaware County regarding the enforceability of our asset purchase agreement with DELCORA was heard by a three-judge panel in Pennsylvania, the Commonwealth Court, back on October 18th of this year, just a couple of weeks ago. A decision is expected in the first half of next year. We're also still hopeful that we can reach a settlement with the county, which would help accelerate the closing of this transaction. I'm sure I'll answer questions when you have them in a few moments. In addition to the signed municipal transactions we just discussed, our pipeline of municipal opportunities remained healthy and strong. Key contributors to the strength of our pipeline include fair market value legislation in all of our states, the fair regulatory environments where we operate now, and the strong offering of solutions we bring to municipalities, including low-cost capital, our expertise, and long-term rate stability. Now this table includes acquisition opportunities where we are engaged in active discussions with municipalities. As the slide demonstrates, we are actively pursuing about 400,000 potential water and wastewater customers. So a very healthy pipeline. Many of you have asked about the Chester Water Authority; it's in the news all the time. You'll recall that this is a water utility with about 44,000 customers that serves in two counties in Southeastern Pennsylvania, along with the City of Chester. On September 16, the Pennsylvania Commonwealth Court ruled in a 5-2 decision that the City of Chester is the rightful owner of the Chester Water Authority. Pending approval from the state-appointed receiver, the city is in a bankruptcy proceeding. The city now plans to sign an asset purchase agreement with Aqua to sell the asset. In fact, just after the court decision was released, the Chester City Council unanimously passed the public ordinance declaring Aqua the winner of its request for proposals process and requesting that the receiver expeditiously provide approval to sell the Chester Water Authority to Aqua. All right. Let me wrap up the formal remarks today by reaffirming our 2021 guidance as we continue to expect earnings to be between $1.64 to $1.69 per share. Our capital plan continues to remain on track as we anticipate spending about $1 billion this year on regulated infrastructure and about $3 billion across our essential platform by 2023. As we indicated last quarter, the final mix of our 2021 capital spending will be weighted toward the regulated water segment. Customer growth is expected to be between 2% and 3% on average for our regulated water segment. Even as the DELCORA transaction has been pushed out in time, we remain confident in our ability to achieve this 5% to 7% earnings growth over the three-year period ending in 2023. This is our current guidance period. Finally, our commitment and our continued progress on environmental stewardship, sustainable business practices, employee safety, diversity and inclusion, customer experience, and community engagement allow us to demonstrate our leadership on ESG-related issues in the industry. With that, let me conclude my formal remarks and turn it over to you, Lauren, to open the call for questions.

We'll take our first question from Insoo Kim with Goldman Sachs.

First question related to Ida, could you just tell us what the total costs associated with that was in terms of maybe capital and operating expense? And did any of the operating costs get deferred at all or what we're seeing in the results all reflecting the OpEx?

And so let me just walk through this. In terms of expense, the expenses and they are reflected in the results are $2.1 million, and we don't expect to have trailing expenses into the fourth quarter from Ida. In terms of capital so far, about $1.7 million. Now capital, there will be future capital associated with that Pickering plant that Chris talked about earlier. Then the conservation-related consumption there, we estimate that to be about $2 million, but that's hard to pin down exactly.

And Insoo, it's important to note that, as Dan kind of alluded to, we have some questions to answer for ourselves at that plant and follow-on capital. One, obviously, we need to get the plant to a point where it produces the level of quality water that it did before. It's producing quality water, but we need to continue to increase its capacity. But the question is, do we rebuild on site with higher walls and waterproof doors, or do we move some of these things to higher ground on that same property, which could obviously be an increased capital cost? So those are things that we're still wrestling with, and I think that's what Dan is alluding to in terms of how we think about future capital.

And just to address the other part of your question there, Insoo. As I noted earlier in the kind of prepared remarks, we will seek insurance recovery and we'll also seek recovery through the regular regulatory process for those expenses that I mentioned.

Maybe just as a follow-up to this one, in terms of the treatment plants that were affected. Are they all fully functioning? So when we think about just operating costs going forward and delivering the treated water, we're kind of back to normal versus maybe in the next quarter or two still having to utilize the other plants that could maybe increase the cost profile a little bit?

I would say, for all intents and purposes, it's back to normal. We do have what we call clear well; this is where the finished water sits that was collapsed under that. So we can't store as much finished water there, but the plants themselves are operating well. We have some tweaks yet to do. But I would not expect the current situation to result in added expense.

My last question is on your growth rate. You reiterated the 5% to 7%. Correct me if I'm wrong, but I think when we had prior discussions, when we just think about the longer term, maybe beyond that '21 to '23 period. I think you've mentioned that there could be potential incremental upside opportunities on a longer-term basis. So as we look forward to conclude this year and look at a new multiyear growth rate. Any latest thoughts on achieving maybe something more robust given the potential outcomes in the PA rate case or DELCORA timing among others.

I think I'll reserve comment as we give next year's guidance. We typically haven't gone out beyond that three-year window we provided. So why don't we chat about that when we come to our guidance call?

Is that going to be early next year as typical, sometime in the January period?

It will be early next year. It could be January, February timeframe. Yes, we haven't locked down exactly the date. We also want to take a look at what's happening with some of the growth projects we're working on so that we align that timing when we can maybe have some good news.

Next question comes from Ryan Greenwald with Bank of America.

Maybe to start, it seems like the EPA is taking a bit more active role just in terms of PFAS and emerging contaminants with the roadmap that they recently announced. Any initial thoughts around how this is going to impact the municipal pipeline and acquisition opportunities?

I think generally, and a lot of the specifics are yet to come from the EPA, but especially as we talk about maximum contaminant levels and that sort of thing. I think we are generally of the opinion that the more stringent it becomes, the more difficult it is for smaller or midsized utilities who don't have our level of expertise to meet those compliance levels. It should put more utilities in a position where they're struggling and they're looking for solutions like we can bring. Given there's no not a whole lot of specifics out there yet, I would say it would help in our municipal acquisition program.

And then maybe on a similar note, just in terms of the infrastructure bill and the latest from the House here around reconciliation. Any updated thoughts in terms of how you guys are thinking about potential impact there?

Well, the way we think about this, in the scheme of the needs in water and wastewater across the country infrastructure that is, even though it seems like it's a decent size, when you consider the needs, particularly in larger cities and some of the needs around stormwater, it's a drop in the bucket and we don't see it as an impact to our growth plans. We hope that if we have access or the utilities have access to low-cost money or no-cost money, we would actively look at that as well to keep rates down for our customers. But generally, we don't see it having an impact on our acquisition program.

And then maybe just one more, if I may. In terms of the competitive landscape, NextEra was pretty vocal around kind of expanded water efforts here with their latest update. Anything in terms of what you guys are seeing as you go into the bids here in terms of changes to how competitive it is out there any states in particular where you're seeing more competition in tuck-in pursuits?

Well, we have seen NextEra in a couple of situations in Pennsylvania and in Texas. Certainly, we've seen their comments in the market. Frankly, we've been fairly welcoming to the electric utilities as they come into our space and bring more cloud to regulated water. As we think about this privatization trend, the more that that occurs successfully, the better it is. We've certainly been successful in our market share and we think we can continue to do that. As electrics enter the business, they've got to build their water expertise. Despite their large customer base and rate base, they can't spread their water costs on their electric customers. They’ve still got to confine any rate increases for acquisitions to those customers they have. So we bring, I think, a pretty competitive position anytime we're competing with electrics or those new entries to the market, given our size, our scale, our capabilities. So not too worried about it.

Our next question comes from Travis Miller with Morningstar.

I was wondering as you look at perhaps your regulatory team, any other states you're seeing or even federal where fair market value legislation or regulation is working its way through various sales of government?

I know we haven't implemented this in all the states where we operate. While it's not always referred to as fair market value, we feel confident in the states we are in. I can't specify where it might be progressing outside our areas, but it appears to be gaining traction in various locations beyond our states as well.

When considering your capability for water acquisitions, can you provide an idea of how much capacity you currently have for these acquisitions? You mentioned a rate base of around $500 million, even with DELCORA excluded and considering approximately 250 pending deals. Is there potential to exceed that in terms of executing and finalizing deals and pursuing additional opportunities?

Yes, I think we can, and here's why. We have a combination of things we use for our workforce in the various states. We have a state president and a state business development person in every state, both of whom have responsibility for growth. We supplement that with others, both inside the business and outside the business to help us accelerate growth. Those could be consultants or former political people that sort of thing that help us with these municipal acquisitions. Many of these acquisitions take a lot of time, as you know. I know there's frustration around how long it's taken with DELCORA, in particular. Given the amount of time they take to get to APA and sometimes ultimately getting to closing, there's time to fill in around the edges to keep a lot of them in the air. In addition to those state teams I described, you’ve all met Matt Rhodes, Matt and his team here at headquarters, which help facilitate that as well. We’ve plugged some people out in our Western area at Peoples, who are notable people in that region to help us with some of the water projects as well. I think we have deep capabilities to continue to build our municipal program.

Our next question comes from Ryan Connors with Boenning & Scattergood.

So a couple of big picture questions. First, I wanted to go back to the talk you had there with your first question regarding Ida. And Chris, you mentioned still sort of formulating your thoughts about whether to build back in kind or to build back with a more robust flood proofing. Obviously, a lot of that will be dictated by what the commission thinks about rate recovery and things like that. So is there any early read or color? Obviously, you probably had some discussions in formal and otherwise. Any idea how they're looking at things like that in terms of cost-benefit, would they rather you spend the rate base and build against that rare flood or would they just say, what you guys seem to handle it pretty quick, got it back up and running pretty quick, let's just let it ride? What's their thinking?

I briefly thought you might ask me about building back better, but you didn't. Yes, you raised an important question that we're spending a lot of time on. We've been evaluating the likelihood of a storm of this magnitude impacting our plant and considering various improvements we could implement. It's similar to reinforcing a submarine door on our plant’s entry points. We're exploring what measures we can adopt to prevent future flooding at the same level, along with assessing the probability of such storms and the necessary reinforcements to minimize damage. We're also considering moving some parts of the plant to higher ground, given the size of our property, and analyzing the associated costs and timing. Specifically, we want to know if these costs can be distributed over several years to lessen the financial burden on our customers. Your questions are valid and ones we are also wrestling with. I don't have definitive answers yet, but I assure you we will discuss our plans with regulators to ensure we’re aligned and to secure proper regulatory treatment for whatever actions we decide to take.

So still up in the air. Now I wanted to actually probe your initial comment I thought was interesting in your prepared remarks about your Investor Relations survey and the comments you made about gas and M&A. I mean what scenario, if any, could you envision yourself diverging from that intention not to pursue M&A in gas? For example, if the PUC in Pennsylvania, Kentucky, or West Virginia were to tap you on the shoulder and say, look, we have a troubled asset here. Can you help us out? Those types of situations. Is there any situation where you could envision yourself being receptive to something like that or is it just sort of real black and white on that?

Yes, I think it's real black and white, Ryan, at this point. I just think as a public company and looking at the current multiples, it's just difficult to see a path where you'd want to add additional natural gas. That's not to say that we in any way are thinking less of our gas utility contribution. This is a utility that the acquisition went well. It's exceeding all of our expectations and our targets we set for ourselves; safety, financial contribution, capital plan. It's exceeding all of our targets very, very nicely. It's a great addition to our company and operating extremely well, but hard to say that it would be good sense to add to that today. We are entirely focused on growing the water utility. Our keen focus of our management team in Pittsburgh and on the gas utility is focused on the things I talked about replacing that pipe, making it more secure, safe, reliable, and environmentally sound. I think it's a solid strategy at this point on the gas side, solely focused on the capital program and those aspects I just mentioned; we're not going to grow in gas through acquisition.

And then my last one quickly. You've been a good source of keeping us up to date on the Pennsylvania situation with the commission, the vacancies there, and some of the gamesmanship with the governor around appointments and things like that. Can you just give us the latest on where that stands with the commissioner’s situation in Pennsylvania?

Yes, and I guess the easiest way to say this is no change. The commission remains at three members: two Republicans and one Democrat despite the fact that the governor is a Democrat. The Chairman appointed by the governor is the only Democrat on the commission. We would not expect, given the governor's continued strong position on the regional greenhouse gas initiative, RGGI, and the State Senate’s opposition to his position, that he could enter that position without their approval or consent. The Senate is not going to move on his appointments. We don't see any change in that unless the governor were to change his policy; the Senate is going to hold firm. It could go through the whole year next year with the commission remaining in much of the status that it is today.

And our next question comes from Jonathan Reeder with Wells Fargo.

Most of my questions have been answered, I got two left for you though. Any word from the Pennsylvania Supreme Court regarding whether it's going to take up the appeal of the lower court's order by the CWA?

No word from the Supreme Court yet. It could take them a few months to give an answer on that, whether they decide to take it up or not.

So it still could be a few months before we even hear if you’re taking it up. And then if they do, is it nine months to a year for an order?

I mean, I think that's a fair estimate; hopefully not that long, but I think it would be fair to say it could be that long.

And then I know you mentioned Chester City Council voted to move forward and signed the APA and they add the receiver that gives his blessing to it. What's kind of the process and timeline for the receiver to act?

There is currently no public timeline for the receiver. One of the key points the city is emphasizing today is that the receiver has critical tasks to complete, particularly in terms of balancing the city's finances. However, the city is facing a cash shortage for pensions, and the situation is becoming urgent. There are pressing issues that require attention. While the city is urging the receiver to take action, it is likely that their next step will be to approach the Commonwealth Court that oversees the receiver and request a specific timeline. We understand that this might be their course of action, but ultimately, it is the city's decision on how to proceed.

And we have no further questions at this time. I'd like to turn the conference back to Chris Franklin for any additional or closing remarks.

Thank you, Lauren, and thank you all for joining us today. Obviously, Dan, Brian, myself, are all available for follow-up questions if you have them. Thanks for joining us, and have a great day.

And that does conclude today's conference. We thank you for your participation. You may now disconnect.