H2O America

Good day and thank you for standing by. Welcome to the SJW Group Q2 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. James Lynch. Please go ahead.

Thank you, Operator. Welcome to the second quarter 2021 Financial Results Conference Call for SJW Group. I will be presenting today with Eric Thornburg, Chairman of the Board, President and Chief Executive Officer. For those who would like to follow along, slides accompanying our remarks are available on our website at www.sjwgroup.com. Before we begin today's presentation, I would like to remind you that this presentation and related materials posted on our website may contain forward-looking statements. These statements are based on estimates and assumptions made by the company in light of its experience, historical trends, current conditions, and expected future developments, as well as other factors that the company believes are appropriate under the circumstances. Many factors could cause the company's actual results and performance to differ materially from those expressed or implied by the forward-looking statements. For a description of some of the factors that could cause actual results to be different from statements in this presentation, we refer you to the financial results press release in our most recent forms 10-K, 10-Q, and 8-K, filed with the Securities and Exchange Commission, copies of which may be obtained on our website. All forward-looking statements are made as of today, and SJW Group disclaims any duty to update or revise such statements. You will have the opportunity to ask questions at the end of the presentation. As a reminder, this webcast is being recorded, and an archive of the webcast will be available until October 25th, 2021. You can access the press release and the webcast at our corporate website. I will now turn the call over to Eric.

Thank you, Jim. Welcome, everyone, and thank you for joining us. I'm Eric Thornburg, and it is my honor to serve as Chairman, President, and CEO of SJW Group. Coast to coast, we're seeing extreme weather play out across our service area this summer, underscoring the importance of our environment and water resources. In California, we're seeing one of the driest summers in recent memory. State and regional water supply agencies are responding with urgent calls for conservation. It's an entirely different story across the country and Connecticut. After initial concerns of drought in Connecticut just a few months ago, we have since seen nearly four times the normal amount of precipitation just this month. More than 19 inches of rain has fallen in one of our communities. People there have experienced flash floods, waterlogged basements, and unusually cool temperatures. Christmas Day 2020 was warmer than July 3rd, 2021. And all of this on top of the severe decrease event we experienced earlier this year in our Texas operation. Great case cycles and regulatory environments are important to our business, but there's nothing more fundamental than the water cycle and the natural environment. Water utilities have long understood the importance of protecting water resources and the environment. At SJW Group, our vision calls for us to view our business initiatives through a lens that includes the impact of people, communities, and the environment. Our commitment to be a leader across the environmental, social, and governance ESG landscape is built on our longstanding sense of purpose and our determination to be a force for good in the communities we serve and beyond. We have employee teams working together across our organization, driving this vision forward. They're working with outside experts to create a comprehensive greenhouse gas inventory that for our companies so we can establish clear and measurable metrics and quantify our success going forward. Enterprise environmental, health, and safety programs and metrics are also being evaluated with the intent of setting national goals and adopting common compliance and reporting strategies. As we further our efforts to meet supplier diversity goals, we're also adopting ESG vendor compliance strategies to promote alignment with our company's ESG policies. We are also forming innovative partnerships with community organizations. In San Jose, we belong to a collaborative that created a plan to protect nearly 1,000 acres of forests in the Santa Cruz Mountains. The collaborative was awarded a $7.5 million CAL FIRE grant to fund the plan, which is designed to protect water sources, establish fire resilient ecosystems, and promote the long-term sequestration of carbon. In Connecticut, we're in discussions with six communities about the preservation of more than 100 acres of land as protected open space. Additionally, we're also evaluating and identifying opportunities to partner with local communities and land conservation organizations to establish passive recreation programs on company-owned land. Our commitment to the environment and communities has never been stronger. Water resources in California continue to be impacted by the lack of precipitation. On June 9, Valley Water, our wholesale water supplier, declared a water shortage emergency and asked its retailers, including San Jose Water, to reduce consumption by 15% compared to 2019 usage. On June 18, we asked the California Public Utilities Commission, or CPUC, to activate stage three of our water shortage contingency plan, which calls for 15% mandatory conservation. The approval for this filing is pending the completion of customer noticing. Our current conservation program is focused on outdoor water use. which typically accounts for half of our residential customers' consumption. In a related filing, we also requested the authorization to reestablish memorandum accounts to provide regulatory treatment to respond to the drought emergency. Last week, the CPUC approved our request to establish the Water Conservation Memorandum Account, WCMA, to track the revenue impact of authorized versus actual water consumption while we have requested customers to conserve. A water conservation expense memorandum account, or WCEMA, was also authorized to track the incremental expenses required to implement our mandatory water conservation plan. Importantly, both memorandum accounts allow for potential future recovery of the revenue and expense impacts. San Jose Water has actively promoted water conservation for decades and continues to encourage our customers to conserve and use water wisely at all times. From complimentary customer water efficiency visits, water-wise gardening information, conservation tips, as well as rebates and incentives, we offer a comprehensive program to assist customers with their efforts. We are also strongly committed to doing what we can to reduce water loss on our side through timely leak repairs and the deployment of innovative technology, such as acoustic sensors and our zero waste discharge flushing truck. While we hope for improving water supply conditions in 2022, we are evaluating ways to further encourage mandatory water conservation, which could include surcharges should the water shortage emergency persist. In Connecticut, we're pleased that the Public Utilities Regulatory Authority, or PURA, approved our request for conservation rate design. Connecticut Water will now be able to encourage conservation by charging a higher tariff for water when residential customers use more than an average of 200 gallons per day. Consumption above that amount is typically related to outdoor use. PIERA also approved a request for a water rate assistance program, or RAP, for income eligible customers. It still provides for a 15% reduction on the water bill for qualifying customers. We believe this to be the first program of its kind in Connecticut and is a great addition to the financial assistance tools already available to our customers. We are working locally and within the industry to engage with administering agencies on the low-income household water assistance program. More than $1.1 billion federal dollars will be available to states to pay water and wastewater bills on behalf of low-income residents. We are closely monitoring these efforts and are working to make sure that our customers in all four states can benefit from the program. I'll now turn the call over to Jim, who will review our second quarter and year-to-date financial results. After Jim's remarks, I will address other regulatory and business matters. Jim?