CWT - Earnings call transcript Q2 2020 | California Water Service Group

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Operator

Good morning. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the California Water Service Group Second Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator like the now Mr. over to would call turn to I Healey, Controller. Corporate President David and Vice Please sir. go ahead,

David Healey

Thank you, for XX, Replay will issued be earlier The With Lisa. and quarter Martin call replay found results Welcome our XXXX. Thomas everyone release, to in for Kropelnicki, Chief Financial President, this Water the results Smegal, California our Service and Group. President me was Officer. Vice our are call today available which September CEO; XXXX until be dial-in information can second quarter second today.

a company earnings deck As company’s reminder, slide an a before quarter. is this morning the we deck the the has also accompany this at furnished at with begin, X-K website to www.calwatergroup.com. This was slide call and available

the quarter take statements. would like at moments cover looking we second the to to results, forward-looking few a Before

interested call, read the disclosures in time-to-time course uncertainties of materially going statements. pass deal company’s Because these with and this statements of the begin. shareholders, risk certain to current all strongly Exchange I to well from and make company’s Commission. releases the found risks current parties During events, subject it forward-looking Form the am could to our to and reports advises understand uncertainties company XX-Q, XX-K, filed expectations. Tom differ from as on Because actual are results Form over various press as other carefully and future the the to with Securities the may company they and and

Thomas Smegal

quarter second earnings and Dave, Thanks, our to everyone, welcome, call.

quarter going that to on in about little major the or proposed that most same I is January we of Rate a is deck of -- then this go not a a factor results it and discussion from on really prior the call slide quarter preface, expected have basis year-to-date eight which that for Case, I are am the who you X, there. as bit to General first decision either company in the begin think California XXXX. are the was was a as received the decision talk on then and the quarter and the on the on the and aware our Just

related call, been been our expenses, would that situation, they and it been the $X.X company offset those $X had a our $X.X water offset second is the be $XX.X record second Commission the the increase quarter normally on that to in in the the as settlement for from represents in of regulatory October of in investments and those the California of decreased performance expense in revenue, $X.X rate factors sales mechanisms in that estimate advocate there had at resulting our would $XX.X and and in will the call. are quarter, And is that those two factors cost we other happened, the we talked million, And $XX.X regulatory For in maintenance quarter, would in we rebound up disputed rendered start -- quarter, case, the in XXXX saw million. $X later our favorable expenses, relief an had our a that quarter, the $XX.X been account first Commission increases many eight, in did healthcare benefit that tracked about And increased have we in, which from which all, mechanisms we things also million consumer of represents slide have big our so quarter in we decision if about then if mechanism XXXX. of and them relief had depreciation big back gain quite XXXX the to here very the and dispute of a quarter. in utility of for talk plan had plant remember recovery net have would up have unrealized of of that I no The $X.XX have that Those increased difference quarter, $X.X an would secondly, regulatory XXXX $XX.X an second a had for investment them a total $X.X was of our to believe to And we basis some million memorandum second the a balancing have income in from will about which which being with up here the decouple from of production filed first gain XXXX. second than that the million our pension and of same second we the factor two interim We mechanisms achieved costs $X.XX then mechanisms. quarter to bit an million is years, additional would we is typical recovery. the match revenue factors to Other estimate million income There delay that’s million to we pre-tax Because by went we additional the and accounts. on so been didn’t regulatory the that first it’s million. for come place. in pension quarter we million million we quarter rate future would versus the have company. by had mechanisms regulatory for more we rate have increased cost was benefit recorded by from pure income company has the that, in those higher of agreement a are the and million similar and that of a is

similar on nine, very is explanation similar basis, slide story different, the the to explanation, and very year-to-date a are same. numbers but the Turning

basis. of million on million $XX a net decreased a our to So year-to-date income by loss $XX.X

that In terms loss XXXX. case compared to been to we in discussing. a of year-to-date, to adopted case, related that and company again $X.XX a $X.XX factors $XX.X rate the have of on was per regulatory it the of representing The a favorable $XX balancing amounts delay share, matters. rate as and had the per settlement related believe these been the to we But agreement gain million million two have of accounts we our earnings the

than was similar, XXXX and of year-to-date really first quarter lower $X our again we strong a For half XXXX. benefit earnings due very similar slide increase in basis, what unrealized basis, depreciation the in increase see year-to-date investment the plan million a slide maintenance And conditions deck. comparatively impacts the you a $X.X that’s gave first first to expense we of expense other and the performance $X.X million quarter million. to on this is very in XX, market On

Our GRC the estimated benefit from on has of the basis opinion -- California changed. year a not full from

continue million company. that in an benefit chart, annual on we basis so to when be in that decision we the the expect $XX.X the a between is the table get $XX.X on that we at to case As the will that million believe and shown benefit

X% than lower we forecast, sales the in as sales. about quarter, last are XXXX adopted mentioned XXXX Our

we were the we WRAM are be with million been we the the to the of settlement adopted to we have revenue additional the with allowed I sales quarter expense. million $XX.X of $X.X range discussion reduction more end and record low in depreciation closer second of earlier, the if to in been million that XXXX. have And revenue adopted, likely linked So in MCBA, would as believe to $X.X much than in mentioned had

a have to two And GRC of are on narrative. the working, balancing current I we are again, the that in granular on an And described bit and disputed medical on Commission’s update other the don’t bridges am COVID-XX. General the items year-to-date factors second slide $XX.X results. going am those little would to and in that that those things those I getting the in that quarter WRAM pages regardless going pension the amounts believe in are for the the the decision major our are a confident we XX believe the Rate in on I either And to have Marty point recoverable have The accounts, in we it that’s highly been to MCBA, we case, So, go-forward are recorded been basis over second balancing Case. believe quarter wanted out the EPS more just that we stopped about would the have the skip because items, million. turn in accounts on -- rate the or $X.X disputed that are and recorded cost accounts past million that

Martin Kropelnicki

important. Good of morning, most employees, every an protecting protecting everyone. employees, our therefore, very those I considered that of in our our been pandemic, have certainly day. the people as workers very, It XX%-plus think Accordingly, know, workers, has COVID-XX interesting employees most second utility work essential quarter field Tommy. at customers the as and as makes well dealing Thanks been are with

all We an PPE as service of as and early all for were in our well with of are employees. mask complying we mandator local regulations areas, other our

and Kern well press, the probably hospitalizations of weeks, counties California and the have seen work. in a and few have past counties specifically also cases, employees of virus Southern in you have increasing a as contract As we have outside seen LA in handful the we California, seen caseloads and seen surge as

them order have that and type of and have So any to we getting we service. employee has successful we doing keep from in in so. in other isolate minimize cases been exposure Obviously, to of like any sick that, able disruption employees been any

will Our have further in until Customer remain states four closed closed and Centers remained notice. all

have people with in an effort we suspended collection So supplied activities keep water. to all

we grant addition, additional a through direct program. have offered In help

to As banks you and local local food the that million charitable for throughout in service may of recall, some went work areas. allocated $X.X contributions, their pantries food company

a that what for called we of customers their who direct Another part to bills. struggling or were grant grant aid pay direct to went

To-ate, track of addition to and who appreciate May of so the in our early saw I and that best, disruption we to in customers end California Southern the were for clean through we the and on do out. service is rioting impacts the have received lot water want pandemic? Tommy, letters them of helping had proven that COVID-XX, that’s customers. so beneficial, providing no be, have do And you at of to the business from stuff I a drinking more go and in we have despite some of continued think, we we fact doing what June, which importantly,

Thomas Smegal

Sure. Marty. Thanks,

in quarter, due the unemployment is to this telling have remember, and in can’t also aging, think, the and account us part customer increased Marty part regulatory company, we to may I activity. noted increased seen last have have collection suspended commissions as activity voluntarily collection before. we we So rate The that

regulatory us in and state activity, collection Our of required that. commissions April California, that goes this there to But mandate point, regulatory through to suspend nevertheless, XXXX. at are do now mandate,

it’s activity. So of going collection suspension be a to long-term

that a that are been bills the uncollectible. XX more only are in the bills million. $X.X to bills outstanding Our than days collection, those have would bills collection we when of are amounts those past, sent have increased typically those had those to to normally And portion sent and

accounts debt the estimate reserve the this So million bad second $X.X the raised million quarter. the from have to end of our we doubtful of balance on balance $X.X for sheet, as is

is bit, have and particular mentioned sales see was we drag side. residential school that memorandum account. think, business, from account the account, Memorandum Water, to costs That will closures, activated late We second Commission. I public sales seek an that that recorded incremental example, in with in authority quarter, a in filing first authorization not operating $XXX,XXX And to in catastrophic is later associated revenue. event the Those Cal offsetting in strong, industrial there. spring. in are COVID. you in we on we to typically are that water Hawaii in approximately observing allows there amounts sales. Our recall, California track the on to will sales that the last That the particularly something continued for book areas the revenue quarter, we expenses recover the until us memorandum The we a the in a utility, decline do recover resort as is as from of

as included end In $XXX,XXX of to those this that a to there. mechanism when addition to place. in the There similar incremental bad been request the in expenses, be the have we has will Utilities Commission period filing put Hawaii Commission of Hawaii our are for a debts operating do Public at do with has collection the to go we recovery. very and that working well

the our about more lines Our of than million cash liquidity all June, talk is capacity want on Marty, the strong. quarter, we at end had in end the current in At the and California? of us million. $XXX $XXX of stuff to credit you of fun additional to

Martin Kropelnicki

later August considering lot the That off with, to in September is may means, there than extended the of Starting XXXX Boy, on a concluding Case a issue going in CPUC, Utilities on Commission must our Rate and its the seen that proposed no California. you Public XXth. have XXth. deadline for California some deadline, General Commission meet to decision order

that that and get we we hopes can to So monitor up. continue wrapped that

we out our feeling relief. pretty quarter to the pointed are each relief financial not and rate consequences with and gets of talk about Tom earlier, it rate confusing As without having results

an Affordability. to read proposal I Water Water Rate to we the case talk in back I me, Rate CPUC hope Xrd, full Commission’s Investor it. you that Utilities’ Class Achieving Action from and importantly, XXXX perspective come Objective wrapped to issued in OIR the the this Utilities, unexpected Assistance Low July A So Low of Customers Water third is name get Programs, unrelated Owned June, name about the an called, will and The Evaluating Perhaps, All Plan Assistance excuse to full Consistency up want of and on a Providing and of policy between quarter. more Income Income

So low the it OIR of looking and was income rate consistency assistance at an consistency the of programs. goals in achieving

CPUC decision General July Rate for other if Xrd and of of field, adopted this propose Water So a number mechanism of would in are that decoupling that decision the Case. troubling reasons. removing out utilities regulated require This proposed next it’s to Cal last kind water came by the is

First a evidence. and very and of very, foremost, data on it conclusions draws set limited

decoupling in And In the these workshops to know the we conservation Commission fact, tables two just decision by it’s aggressively the a think making conclusions. a gone what goes have of There goals conservation were on Plan. Action provided bad we against life. conjunction early don’t hours the used even construct draw used of with also state’s only prescribed and of after rule-making. And to way we and by data was as Water this

this are the the we week last So very much to involved about of support find week and the Commission and talking the in goals this policy conservation state. state’s in it of decision, direction the of conservation and proposed going and wrong

next million are the over Just population the that’s Ag to remind everyone, over we the almost decade. California $XX billion. business in state has It’s largest union and growing Ag in XX XX million from to

for just including policy are It’s most low it income against of current what effect decision the increases rates so we decision this waiting have So are in essentially on implementing the flat the getting proposed rid unclear we for. and of out we it. what’s idea customers, decoupling lobbying the against of are basically and could OIR that also of this customers,

legally into into now. and But cycle. So looking into rate that digging the push it we next case that right should are

was that issued on will PD August. here be to this there more early come So in

last believe get asking all more a for for the to evidence on a the We Commission if available all table. focused decoupling and to halt have data of have the had of that’s full and conclusion record on on the would that the different of a lot examination get XX efforts evidence they a years we basically the to

capital for the that program the news, that’s last going same see and to was quarter, it’s frankly compared negative highlight a of at kind with everything this investments Looking our on up period X.X% was been to the year. capital nice

The first XXXX. between million So would in capital company million of $XXX we half in $XXX.X the and invested XXXX. estimated it million previously $XXX had during spend

able project the program, company accelerate. seen slowdowns, things some While our replacement being experienced has like individual other to main have we

overall, now we And at as of right track remained so, XXXX. have mid-year on least

change could more things our any to with get there the depending that on if pending and overall invested the course, ability how is ground. go affect shutdowns that Of and put could virus capital into

which an in $X want our acquisition makes have Service development, our about business investor-owned Company we addition, to page, Washington. In if UTC closed second in View. includes Company Service which added utility incremental turn the quarter, investment now Rainier by largest Commission in Washington which million the and that in the that for is UTC, capital View rate-regulated I The acquisition talk on acquisition and the Washington the Water approved during Rainier the of and June, Washington closed we Washington, Water the state you

we closing with approval have our change of Hawaii the Kalaeloa system the O’ahu and hopefully for and by those the anticipate the addition, control In in we in XXXX. system in filed of Maui end Kapalua applications quarter our in regulators first for

see developments. will a the history just of Maui, Barbers redeveloped for and Point going & View commercial Kapalua will us our residential And system north Wastewater that properties. base of the in approximately and added customers the customers, to stack the which which on and golf slides into in that’s Kalaeloa XX,XXX of O’ahu the hotels, add be on of large Water Ka’anapali -- air You is couple System, has former see island courses about the XXX you Rainier system

of dealing else. XXXX with very all two given those for Hawaii, have out would X% which and connection pandemic total under been everything our we just the the we year add closing to you healthy, is that up, think add So the in count customer

to to development work. to team slides? Tom, good continue business continue do be go next the and So couple of busy you through has want our

Thomas Smegal

Sure. Thanks, Marty.

our which So an history include Rainier additional View slide million of capital is XXXX investment projection on $X XX, Water. did update to the slide, former we in investment

have So rate rate flip those as Rainier but those base, which numbers. we you just there. you will obviously a up XX, have well numbers in included of to it operations see little in and bit, investments and slide capital as the so doesn’t shape And smaller View if regulated gone a bump for much base a XXXX, is we our of the those increased change now that’s XXXX have than bit our California updated little curves, estimated

letter are be the see, letters and Marty to apologies the settlement, most XX begin that with is Reliability chart, and advice a But our Water I rate very for is in you not good make advice it’s Project. it’s $XX project now can Verdes million we an that you notice base As Commission million letter. just advice is anticipate point think the This numbers, settlement the of the $XXX that will the in are for anytime we XXXX for. will expectation approval third you been deck, has is the soon, called -- will I that advice if already of letter and Palos recovery its review we on the that to light you that did of -- that on targeting in don’t It the add letter are process continue a filings. to authorized but and that history we that news project included green Yesterday, area advice the company on looking -- the row advice still the approved letter slide California filed early of those as who we that’s track, filed adopted be largest process XX, on the that the the mentioned, for that Commission. is and subject large by assuming these at about company’s have gets settlement. a the for will

it Marty, wrap-up. over for will to you I turn So,

Martin Kropelnicki

three Great. Thanks, there’s probably are quarter. should we four the in or Tom. main on Well, get the focused sense, you third things

we well Affordability decades. on XXXX Case. the on focused I Low our First, at Assistance, the proposed decision This the delayed staying least is as had conclude our that, the Income cases to as in last think and efforts of rate probably Rate General one PD, on longest

up we to with bed. anxious So wrapped put to the get Commission get are that and

every day. Additionally, have show and we day seems around COVID and work CDC moving the response, keep every requirements up it to to to change

a are We not of sheltering in place. employees that company lot a has

produce We our have and to for customers. show to up water continue and provide

continue the into this go our customers sure the into to we COVID And to the step deal of season. with may our we into which protect important the every we So and fall includes items lastly, one as season, making employees we become third take and possible and move going as quarter. later flu more

may wildfire We season as and and real and people for but well downs. job team are challenges has ready done public any way. a come our of know, very possibility that wildfire so moving safety the to out, power PSPS are continued handle preparing we into and shut And go operations we season water power the the the need still good

the to sharing wrap looks our be for report very we at our we QX busy quarter the to end you us and as with of look and a quarter October. results results up forward So

will that, it we open Lisa, So, questions, with up please. for

Operator

comes first ISI. question with Your Durgesh the Chopra of Instructions] from Evercore [Operator line

Durgesh Chopra

morning guys. thank Hey, Good you taking my question. for and

Martin Kropelnicki

Durgesh. morning, Good

Thomas Smegal

Good morning.

Durgesh Chopra

Look, and second speed just before to sort clarification wanted transparency. that’s that. decoupling your of appreciate the clarification. ask just kept everything with wanted I slide quick to the costs? and the community here decision WRAM on want Look, all decoupling ask been sort on, on proposed to very of get the very, just I and to along you I all pension you go up so is a mechanism, just challenging to for medical doing I XX, If which but the decision, you you going WRAM/MCBA some times applicable back kudos to truly work guys, have I -- it I I the that. Clearly, for on MCBA to investment the that the proposed sort or of bullet is say is

Thomas Smegal

decision policy low impact as case way MCBA The next Sure. Marty company on WRAM the the the And income cycle. rate decision is is the the focused mechanisms. would proposed Commission, docket of written, said, in proposed only the this and it again, that

it So would things the so that period. without decision XXXX the be proposed if and wouldn’t changes it either those filing, any adopted in affect of interim were

know should obviously you rule litigated issue that Cal the and Water. comments rate ratepayer advocate this why that in WRAM wait, the to the However, suggests the with this case Commission issue have get making with here let’s supplied us they and for over that in

of. something certainly wary that go sure XXXX, it’s decoupled utility an a remind to continue that just flipping We adopt not design to back be place. need just to take that allowed understand fight not water and to to in it’s so, being What make we it to design. decoupled. is switch Commission from There the decoupling need against is changes being some rate the the a And incredibly everyone, severe has rate did risky company to that to

those that more of charges that had the our is of tier. quantity more the top are quantity rates years. seen fixed are design through such have rates being than the WRAM recovered rather You being in balances have we and recovered through rate But costs over that the

have who don’t those the who those MRAM customers that lot look And at decoupling, of you companies on companies So focuses it’s fixed have recovery. recovery adjustment using an a the are price mechanism. accelerating if cost cost water. It our

to play the the decision of that if -- fixed in and recover case at would changing that You be more will and rate sea that is they costs there of bad of to rate that’s there great but Durgesh. out get design. needs good a to we were WRAM they the WRAM of that really in change our helps, design factors the current so current and recognizes really mechanism us decision, the rid And is the so it thing deal have rate premature rate their that I is a least designs case. one thing other that proposed language the and effort of without a and revenues through good on take persuasive that much see to it take the in for the discouraging far Commission flatter one Commission hope place hope in proposed is

Durgesh Chopra

EPS Tom. then, helpful. on slide the Super Yes. Tom, bridge XX. just Understood, And

it? I this getting right correctly, -- of the the is million production up So it? impact way recovery production the the allowed sort bar sort am you not that think thinking the So to in those about the cost, than about is to that right of water are of cost about think $XX.X that shows way chart, water the essentially for higher

Thomas Smegal

Yeah.

the lower that So, because going on $XX.X production is see million, revenue chart, the $XX.X part the wasn’t achieved. of that bar you water the million costs. That isn’t to equal exactly

that to them mentioned we water where sales I So about wanted be. were

adopted. are they about of XX% think I

water So is a decoupling sales there not having loss $XX.X is which rather the smaller from actually than the million, of the component revenue component. just

Durgesh Chopra

have obviously, can color commentary with like Understood. finally, of us, Then just, of you seems any here with on that you Commission times from your That early in the past met couple two a makes sort sense. share weeks. that the

So think appreciated. Just it any of with or sort what rules is be your future proceeding? would color be expectation you into August actually you will Commission share that going this can the in addressed suspect that us do that you a Xth, on

Martin Kropelnicki

Sure.

couple up one going and meetings, the of divide I first is did meetings, have we or Tom, so -- I the to two them do as of So well. this week

fair saying go to we going ask pretty low from ratepayer decoupling. Having said big about communities. kind a of to to -- are question that, rid think get always saying, and we of we examine to low the programs it’s We consistency of underserved are it’s a income assistance think income reach

shrink of message of no increasing get kind number the I our commissioner. why we commissioner ablation, it varies and to one kind block and just And been by think that’s of the say, the So rates Commission. tier. had should have rid of commissioner I

So the of customers, almost increases trying the frankly, is water start right users and communities it’s the high equity all of they to income penalize that, users. and for what with problem are to classes rates reward kind of accomplish, among low which ratepayers. That do the underserved into water you you that, and goal smacks low when

for believe and So at narrow minimum, a our on and of policy allow really examination been data hold a it. that then put simple, a the all full It’s the let’s discussion have facts, this not proper shift. we big a point about Cal just has band really data very together limited put of it, advocates a

Resources And Water hand life. making one growing have done you economy, with dealing a making all to the and a we in do has of population all so, that. work now on conservation way conservation of the with Control grow and you this want to Board continue on the State business, saying, the undo life, coming a way growth Ag How dealing PD out

policy propose So is trying important a terms there CPUC implementing. to of state in the what there that’s is break really versus

are pointing So because out important. those we are inconsistencies, very think they we

ability it was we for money sales initially of you we to then, promote decision aggressively WRAM, were up, the went those because took of and and as we want for we it’s remember, -- the policy For company, make back chin state giving a conservation. said Street our the to water the right kind just when more a Wall it up perspective, from because we on implemented

and laying that around are are So to relying the of talk you we staff, tight lot the pretty commissioner’s the our lipped. pretty The on. When are are ask positions advisors they a policy tight questions about data good we They lipped. arguments. out

a minimum write could if hold, scheduled the a Commission Any decision. and kind an not And for commissioner of we it’s to on will a it be on happens. another asking alternate, Xth a proposed basically a are of stay. we wait of what -- or scrapping August an Likewise put So have discussed hold and see could to alternate. the

Durgesh Chopra

ready of where last this pretty event or And quickly, appreciate be sort for like you. say goes, X-K or you Will all just on at questions. a it’s August Xth I issuing Understood. answering Thank not you thing this that regardless that you a material given time? an to one of my one release and

Martin Kropelnicki

keep updated. will everyone We

that proposed just or indication I hold, think but actual not an going a in an result published, any decision official Xth may an on a being that’s if of hold August result there to in ultimate X-K, decision plain communication. is

I you if think, So, don’t see...

Durgesh Chopra

Thanks Understood. much. so

Thomas Smegal

I think yeah. if you don’t --

it I any something you it that means because think will if see other was in don’t you something case. see held

Durgesh Chopra

guys. Perfect. Thanks Okay.

Operator

Ryan & comes Your of with the next from question line Scattergood. Connors Boenning

Ryan Connors

Thanks. morning. Good Great.

Martin Kropelnicki

Ryan. Good morning,

Thomas Smegal

Good morning.

Ryan Connors

is devil’s on want your view advocate that I that new -- policy. the this on a and decoupling So, play is bad continue maybe to this from proposal discussion

You mentioned street. taking it on the chin from the

in they comments, the that have I are that think about probably of to close California those that argued we threw country they pushing mechanism of one structure, ROEs jabs. business in the reason seems inherent of it and And we in few have successful Tom, that, decoupling the is reduces believed the been low riskiness your the down. have like why of that in and kind risk the notwithstanding a reasons the the ROEs is rate

a let’s guess, lining there and does ability imagine So, your is, second ahead, been extent years a actually we in least relief and make just that, they the that along thing they the if argument, for that, side could wish were at making to in have takes can’t don’t silver that to it see away question ROE argue the all move I happen? might to on get be some next their the few my you opposite this

Thomas Smegal

good Ryan, those are points. very

fact have the that, mind have -- companies, allowed Jose three four those San there. if companies all to you the Water go riskiness and the between And mechanism the any of capital of recognition WRAM cost back fourth three they never Jose to WRAM keep though, been there’s I is is group in a cost that with of proceedings, the difference Water. being effort of the remember and and capital respect San in the ROE think whom our is a that pattern to

can to in would idea removing be an of put faith increase that so, cause a a And the our WRAM there sure not ROE. am I we that lot to mechanism

of effective will Commission. who I right, those anything of the obviously, Marty, that And see, new be and to am have theoretically would little you we filing you cost so, be bit but a March you to don’t that’s do X, time, actually XXXX, hopeful and process recall, next will I for and are add capital on at January same am with there? the I take leave standard a that And that place. for the that might will doubtful wait we have that just there,

Martin Kropelnicki

No.

I that’s right. think

reduce been we that be and think, certainly the ROE risk XX I decoupling last every the hasn’t for hitting the years. if case certainly, our the year, would

quantitatively. in if that the would our back the that I gets remove write and water. I no it to new the the does is, But decision me massive a quote-unquote, But is promote your locks policy of no, think, that certainly, state think it qualitatively goes there point helps sources the capital. California evaluate margin. we massive, other the allows And become an the Ryan, cost to it testimony simple us and sales, I state still goes back help will that in to way at disincentive just because we and for it it is look with right, to math economists argument -- of and think and water

is You can a Desal, expensive. and to very go carbon which footprint large

that be of study has conservation in And case XX side is decoupling so gas alternative years there cost lease works. and electric to California your on and continue

this. decision a I from very narrow with within commission So really that’s to shortsighted trying a it’s the do think band

know a pretty potentially cost if bad. Yeah, hard potentially try. will if fair argument, But your any it, certainly on argument don’t I gain I attraction, their if capital, is it’s capital? think, that are we could of know they with point, and of you I it we would but cost on probably they just argue -- think use to logic reverse to

Ryan Connors

Got it.

Okay.

or have me well. issues lot picture tactical of pretty Now, the the I think, excuse big a covered you

very question last picture nature. my So was a just big more in a big picture,

standpoint. If to give have deemed one what the regulated federal are the though cost money. just you have customers situation, coming really policy the even away and saying check. need, government on if of I stimulus your which are of in we that been benefits mean the terms for it to at that’s like they then But and unemployment product surface, from stimulus have are on household well you required got massive keep out essential COVID stimulus operating you you got not hand, a look utilities treated and a the seems

forward So any of of this next water, are discretionary are question do efforts see level, guess we to are and to if spot any these utilities audit is make they can just move we stimulus that in playing lobby that? cetera, out, doing more checks of how terms kind say, are hey, of some is, basics, here some round out, people some sure seems I their taking thoughts things. a bad caught to my how care of as kind kind for electric, going It we in et the under there of to we before on like get there these into treatment require, industry-wide way are better of at

Martin Kropelnicki

into kind input think, first, I government Powelson. think, been and then has tracking, on let -- NAWC, as will team, you jump very trying affairs you monitoring can we to Rob it me he of Tom, I and The get Tom. recruited I bills. it the take know, busy

been what’s today bill are people saw of of survival contraction any talking now kind kind of with points think and challenging right right we GDP I think, mere haven’t now is, for with who the working. stimulus we I

to think a harder it’s that. kind I push So of little

incremental as are a of we costs costs allows all them have pandemic us result under collect incur and them memo fortunate, review. that those recoverability account the is we pretty future We a catastrophic potential we file that for and for go there us, of COVID the and for to once track they

for, I I met, received a what grant me people, is I the use I that of I the from help. for half but for letters that we paying know program. I this So majority said, think a thanking company on have week grant customers, on is, and you, program plan letters who the more plan appreciate direct the basically customers a have back. never And behind, dozen interesting really the I fell are am thank payment

has back you who smile for what’s the I a in hell to so of more use and please happening way are letters, And community, auditors with there this the there that’s thing. are quarter, that and I needs it world, in care despite it give and -- When here, stuff do who our kind got Board all right Tom -- the credit want I actually else been and someplace got I with and we said, out the really meetings. those people the

I so And it’s think determined. all be to

to tried the are I think this break. be consequences down open, hotels aren’t my continue going massive. on aren’t Coast, shut restaurants on economic West Things are lunch to a I of take walk still opened, downturn the to tightly

as interested improvement am a program they and while making at allocated very with packages. considering on federally, or hard it’s utilities a be more and are treatment that utility think are a little any capital they now, I that capital I would spending if water to looking that. Rob on been a they for program So kind now the Michael do right point equitable of you Tom agenda push aid that. sure involved fair Powelson get and might and projects what that very, anything dollars add has capital

Thomas Smegal

No.

think that’s I Marty. great,

Ryan Connors

this Great. hey, thanks Well, for your morning. time

Martin Kropelnicki

Thanks, Ryan.

Thomas Smegal

Thanks.

Martin Kropelnicki

Appreciate it.

Operator

of comes the question Reeder Wells next Fargo. Jonathan Your from line with

Thomas Smegal

Good Jonathan morning,

Martin Kropelnicki

Jonathan. morning, Good

Jonathan Reeder

Do proposed get the a low income in be you you decision been there’s some given resolution need WRAM GRC morning. uncertainty? think the PD ratepayer docket to Good before

Thomas Smegal

to answer the Jonathan. know don’t that, I

think isn’t. is it I in be know I GRC. issue that it -- could an we or don’t that that that know -- the I don’t it

written, working income That’s is but way affect the the of current the a our it GRC think and low PD doesn’t mind into I that get the on GRC, that case. are -- that the folks our certainly possibility. can’t I

Jonathan Reeder

seem issue, like entirely WRAM it I to into perspective, the mean, does then separate the this I investigation defer to unless seems the CPUC guess, open proposed it the GRC just issue outcome -- decision MCBA like docket? a removes needs my from the and in the

Martin Kropelnicki

a is XX/XX/XXXX. GRC be And case law October. since was been the Jonathan, to two I a But there the separate perspective, from settlement proposed whereas supposed Yeah. think they that’s by has difference, concluded think been the proceedings, are on I table ours

all of So I Have going Tom your was perspective can’t the I one, it making a favor. But retroactive look think seen about haven’t is think and and the type mind, kind back seen ever from ruling data and thinking Electric. PD I called worked this a kind set where what Water really also limited head. in my I Gas And of at and coming at up PUC. so of it have Cal you our speak ended to fact scratch from as I was very rate very, hard, I very, at Pacific case years the it’s said, you and laws the merits of and do a

it. on what out And is so the with going trying we free are to heck

would in because I just is never know. you arguments never the So say, say but favor. case favor I are But never think, say would think say never never, law I and our the our in I

Thomas Smegal

Yeah.

give data points you this. Jonathan, more on more thing, one two me Let

Rate cannot policy Case have First of Aceves state is about commissioners talk about It’s decision. and her to remember can’t the one General Randolph. law, understanding with all, that Commissioner cases talked to our Guzman she under our another Commissioner that these

in is legal so a And decision a good our theoretical as until she had nothing believes delay goes. meaning is good on lawyer, with rate the that at government. government involved who to was Commissioner was working in up Aceves least Randolph policy whatever case at Guzman the that Xrd lawyer do And standpoint least July

I don’t that been believe breached. So has wall that

point issues I mechanisms. follow. does know proposal. their their our it’s coordinate also proposed I in says was came have continue the have Utilities in and decision probably rate this delay week, of decision California decision. a of Xrd that didn’t some these up same you balancing whatever The of it Apple of with and pension the accounts. last that the company July is It WRAM proposed and out at Park do the WRAM that addresses least Water that balancing I to should a should will continue through week out case doing They Friday But are most So Water not that decision of the Monday anything Liberty that WRAM think with not great accounts. other and maybe policy just Valley policy on

to And But, so again, there. wait efforts coordination and of it like there’s we will out. have doesn’t seem see eventually a what comes

Jonathan Reeder

there think have WRAM/MCBA. this policy one. Right. income get discussion different pulled adopted make I current broader to I doesn’t I current I is one says, docket rate so while ratepayer and and low its in docket, form is, trying now that proposed it low any going scenario seem come the am mean, guess, where in you proposed the the sense the the to the but then can with That it decision case rid PD gets no, if in if says, of just then rate what guess next going has this away your okay, the investigation, case, docket, not out on still conversely, is it income still in decision, ratepayer of in to or and it’s

continuation in include -- Public it I a the it You away. your of but decision way. then proposed land it rid This decision would that appear. mean General should intertwined, would position the next, Advocates’ are of I being Case, on guess, think versus, proposed Rate under current I this by now get fact in influence GRC intertwined right that so see the decision an or other one have and shouldn’t get different I it

Thomas Smegal

see Yeah. you Jonathan. are No. saying, what I

a mechanisms very it as say, difficult a low the with Ratepayer think case get out of of you Advocate I case this that’s to they was There I the so come point out be the Commission totally their over from the PD filed and will in the comments. rid I income for get that with did WRAM let’s concurrently agree I if guess and would and Water in it were earlier the kind be -- there written. should comments, Cal XXXX. potential lining. that obviously adopted silver originally

So the in that gate. in a change that could result decision to proposed potentially policy

that not We they from is I you the case, think, standpoint, decisions are in very two that want that but wouldn’t one right conflict are another. hopeful with have to

Jonathan Reeder

the handicap too. That’s wasn’t I I for that chances August No. aware for agenda the ratepayer meeting? how the I you consent Yeah. Utilities. on saw, income CPUC mentioning Last approval? was with Xth mind, docket interesting Liberty I this guess, that of at think, this would I low mean, the all about it decides in that. Thanks of

Thomas Smegal

it Jonathan. typically starts, That’s where

announce very the made change items. an So typical educate meritorious enough is minute decision, has deciding really kind until are hold potentially it to not or PD typical that starts and or somebody them to puts have on write and is from These it an their to off specific people starts that out, pulls as we commissioner to and decision agenda consent. now kinds that’s making are of delay then thing. the this It dependent the offer any usually of issue response upon we it alternate or a the that be comments out all it pattern to on a of may decision. consent commissioners effort off been offices been the as the hold to to proposed not last PD for the that There have

not potential meetings I don’t I a -- case Thursday’s hold Water, as about that go a Cal waiting close So and or parties to to to alternate meeting. to on hear we but very next other other the continue the think continuing next even meet. be just going to are unfortunately, going of think are until and parties to you interested

Jonathan Reeder

good the these all Really your way luck color additional complications. through Okay. appreciate and

Thomas Smegal

Yeah. Thanks, Jonathan.

Martin Kropelnicki

Thanks, Jonathan.

Operator

Storozynski Seaport. line Your of next question comes from Angie with the

Thomas Smegal

Angie. Hi,

Angie Storozynski

when are because wanted so means for knows. them adjusted you, you sure related that the How catastrophic earnings you report to how this any other question WRAM, not just is that to is, that that those mean, P&L, Hi. however, COVID you? expenses going are actually the correct? -- nobody that account, the for make costs is I earnings, accounts ask memorandum deferring we through clearly about to and am memorandum I are like I flowing my not But questions because,

Thomas Smegal

that’s actually So not correct.

So policy check account end accounting recognize memorandum a our assets a memorandum is we the will A accounts. is filing from event has and that catastrophic account at regulatory reasonableness process. is of account liabilities and and balancing the that the

memorandum So, the the account. able would file would That’s we we future by book we with and period be in book so -- as recovery in I do quarter associated that for the the are we Commission And to expense. the approved in mentioned, from a once $XXX,XXX that P&L to the to revenue Commission.

Angie Storozynski

P&L. and Because the only water, that still are Okay. that pretty think and I electric, cover California the gas those utility you through much flows can I expenses of

Thomas Smegal

Okay.

Angie Storozynski

of recovery is those an assumption such, there that assumes as else everybody are think and expense. I not

Thomas Smegal

will time. working company’s you Well, them been touch company’s the That’s our Okay. some been get and I get the revenue we that. will that’s auditors on policy for in with just recognition --

And reg between we feel as a and us book with So and and asset trigger we then as distinction Commission our giving go comfortable it again memorandum that revenue. balancing recover and accounts. ahead the book will something accounts that order an is, to

Angie Storozynski

So P&L? expenses the for be PSPS similarly through of any flowing power events also will types backup that

Thomas Smegal

we recall, and year me. that will But did different in do our have that a P&L But of flow me don’t you last give we PSPS for last I number. we file on believe recovery recovery have It’s have you amount is statements I the memorandum have that expense. if filing. that, from to the And for Correct. once an and we of I that. expect in through front account to in financial future front make year. that did expected don’t of

Angie Storozynski

Thank Okay. you.

Thomas Smegal

Thanks.

Operator

are there time. this further And no questions at

Thomas Smegal

Great.

Martin Kropelnicki

Well… Great.

Thomas Smegal

Marty?

Martin Kropelnicki

get case through Obviously, major on on during things you. Tom as we as and be the doing is rate are filing there if we happening quarter, affordability, would the decision working COVID. the and thank be any proposed will getting third a we said, that there lot through there a …everyone

talk we for we to at QX. Thanks of and hope you will everybody. So, being the and to forward everyone for your end here questions soon. today will everyone is Thank and we look you to talking safe

Operator

This concludes today’s conference.

You disconnect. may now

California Water Service (CWT) 1 Aug 202020 Q2 Earnings call transcript