California Water Service Group

Good day and welcome to the California Water Service Group Q1 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask the question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. I'd now like to welcome Mr. Tom Scanlon, corporate controller, to begin the conference. Tom, over to you.

Thank you, April. Good morning and welcome, everyone, to the 2023 first quarter results call for California Water Service Group. With me today is Martin Kropanecki, our president and CEO, and Thomas Smagle, our vice president and chief financial officer. Replay dial information for this call can be found in our quarterly results release. which was issued earlier today. The replay will be available until June 26, 2023. As a reminder, before we begin, the company has a slide deck to accompany the earnings call this quarter. The slide deck was furnished with an 8K yesterday afternoon. It is also available at the company's website at www.calwatergroup.com. Before looking at this quarter's results, we'd like to take a few moments to cover forward-looking statements. During the course of the call, the company may make certain forward-looking statements. Because these statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the company's current expectations. Because of this, the company strongly advises all current shareholders as well as interested parties to carefully read and understand the company's disclosures on risk and uncertainties found in our Form 10-K, Form 10Q, press releases, and other reports filed from time to time with the Securities and Exchange Commission. I'm going to pass it over to Tom to begin.

Thanks, Tom. Good morning, everyone, and thank you for joining us on our first quarter results call. I'm going to start on slide number five of the slide deck, which is just a table of our financial results for the first quarter. And what you'll see there is a large drop in revenue, which I'll get to in just a second. We had a decrease in operating revenue of $41.9 million, or 24.2%. That lines up with a decrease in operating expenses of $15.3 million, and that's a reduction of 9.3%. The effect of those, among the other things that went on during the quarter, was that we had a net loss quarter of 2023 of 22.2 million or 40 cents per share and that compares to net income of 1.1 million or 2 cents per share in the similar quarter last year. I do want to highlight and we'll talk a little bit more later about the increase in capital investments of 19.7 percent in the quarter and that is certainly good news for the company's business plans. Turning to slide number six, The big story for the quarter that we are describing in this document and in the press release is that we had a combination of severe weather in our main service areas in California, very wet and cold weather here in California, and really what I would call a gap in our regulatory mechanisms. This gap is temporary, and we'll talk a little bit, probably a lot, about where we go from here in terms of those mechanisms. So on slide six, the big impact to revenue, both build and unbuild revenue. Again, the extremely wet winter in California, we saw a 12% decrease in our sales. And remember that sales in California are usually quite low to begin with in the first quarter, in the wet months of January, February, and March. The weather pushed down our unbilled revenue accrual, $5.8 million as compared to last year. And here's where we get into the regulatory mechanisms. So in 2022, during a similar period, we had an offset of $12.1 million by our RAM and MCBA mechanisms. And you'll recall from our past presentations that the RAM and the MCBA are no longer active in 2023 for CalWaters. And that's the regulatory decision of the commission. Those mechanisms are being replaced somewhat by other mechanisms. However, those mechanisms are tied up in the delayed California general rate case. And so we have on the deck here, again, in the middle of slide six, an estimate of what would have been recorded had we had a rate case in two accounts that would have been The first is the DREMA account, which is the Drought Response Memorandum account. That is an account that tracks lost sales during a drought period, and we are still in a drought period in California. We estimate that were the rate case effective during the period, that balance would have been from $6.5 to $7 million of revenue recovery from the DREMA account. In addition to that, the Monterey-style account RAM mechanism, that's a price adjustment mechanism, not quite similar to our full decoupling RAM, but a mechanism that would be in place with the rate case, that would have generated $9.5 to $11 million of revenue. So not yet regarding the potential for a rate increase, you can see where the regulatory mechanisms that are not currently in place wanted to highlight here is revenue deferral so in accordance with GAAP when we are collecting our balancing account balances in California we have to evaluate how much of that is going to be recovered within 24 months and because of the large balances that we have in the RAM and in other balancing accounts some of the surcharges to customers exceed that length of time and so we've had to defer revenue That deferral of revenue is an increased deferral of $18.8 million for the quarter, and that was offset by cost deferral of $15.4 million in the quarter. And so, again, that doesn't have a lot of impact to net income, but you do see that on the top line on the revenue side. Flipping to slide seven, just a couple of other notes about the quarter. We did see a gain, increased gain on our non-qualified retirement plan assets as compared to 2022. In the same period, $4.6 million gain there. Our water production costs fell, as you'd expect, due to lower sales by $6.5 million. Couple of other financial highlights. I mentioned 82 million in capital improvements. We had heavy rains in a lot of the quarter in California. Despite that, we were able to get a lot of construction activity done. 19.7% increase from the same period in 2022. As you saw, as we filed right at the end of the quarter, we have a new revolving credit agreement increase the amount available to the company and to Cal Water from $550 million to $600 million, and that is a new five-year revolving credit agreement. And then just a reminder that beginning in Q2, in May here, Cal Water expects to increase most customer rates by 4% on an interim basis pending the resolution Moving very quickly to slide eight, which is our EPS bridge, and this just shows the factors that I discussed. The other two factors that I haven't mentioned, I'll mention here, is that A&G and other operation and maintenance expenses, apart from the deferral, that decreased our EPS by seven cents. That's your typical operating expense increases on an annual basis. About the fourth bar over is just what we would call property-related expenses, so interest, depreciation, and property tax as a result of having a higher invested capital base for the company. One thing that is not on this EPS bridge, and if you flip to slide nine, is any potential for actually a rate increase associated with the California general rate case. I do want to highlight that. And so the unrecorded regulatory mechanisms, we already talked about the last two, the MRAM and the DREMA accounts. We also have an interim rate memorandum account. Remember that the California general rate case is effective back to the 1st of January of 2023. We estimate that had the case been adopted, we would have seen an interim rate memorandum account balance between $8 and $15 million. And that represents, the eight represents the position of the rate for advocate. The 15 million represents the position of Cal Water in the case. And so there's a lot of caveats to that. Obviously, the judge is independent. The judge can choose to change rates in whatever manner that they feel the evidence warrants. But that gives you a guideline of where the advocate is and where Cal Water is with respect to the rate increase for the first quarter. we would not anticipate booking that amount until after a rate case is decided and that interim rate memorandum account is scheduled for recovery. Finally, the fourth mechanism is the incremental cost balancing account, and that is also tied up in the rate I will keep going with slide 10, the California regulatory update. Not a lot to report here. First bullet is that we did see the cost of capital case get a decision extending the statutory deadline. They now have a deadline of August of 2023 to complete that case. Commission could complete the case, but by that time, or they could issue another decision extending their statutory deadline. So we don't really have any information on that. As a reminder, that cost of capital case, one of the issues there is whether it would be effective at the date of the decision or retroactively. And so we've identified, as we have for the last several quarters, the potential impact to the company if that decision is retroactive back to January 1 of 2022 when it was originally expected to be effective. And there's So I'll stop for a moment and turn it over to Marty to talk about the drought.

Okay. It actually seems kind of odd to talk about a drought given what we've just gone through with the winter. But certainly we want to get you up to date on kind of what's going on out on the West Coast. As Tom mentioned, it was a record winter for California especially as of April 24th. if you look at the percent of normal for the snowfall in Northern California, which is also the Northern Sierras or Trinity region, they're at 217% of normal snowfall. In the Central Sierras, which is around the Lake Tahoe area, they're at 251% of normal for snowfall. And in Southern California, as of April 24th, they're at 322% of normal snowfall. The significance of that I'll talk about a little bit later as we start talking about the potential flooding. Accordingly, given the winter results and the number of atmospheric rivers that have hit the West Coast, Governor Newsom in California basically issued an executive order. His emergency declaration was still in place, but he issued another order that basically eased some of the drought restrictions that were in place throughout the state. If you remember in 2022, we were in a fairly severe drought. And we were in stage two and moving into stage three of a five stage plan for the state, and he has eased some of those restrictions as we go into spring. The emergency regulation that was adopted by State Water Resources Control Board remains in effect, and that has an expiration date of 6-10, so June 10th, the emergency declaration from the State Water Resources control board, if they don't extend it, will end at that point. So we believe that the DREMA account, which is the Drought Response Emergency Memorandum account, will stay in effect until the State Water Resources Control Board rescinds that emergency drought declaration. So if you look at our Q1 drought expenditures, they were about $300,000 in total. It seems weird to have drought expenditures, but these were programs that were put in place throughout 2022, and the costs kind of trickle in as you move forward. And in total, in our memo account that we have with the California Public Utilities Commission, we have a balance of $2.2 million. Going on to page 11, I want to give you a quick ESG update. During 2022, we invested more than $6.1 million in water conservation that resulted in 180 million gallons saved of drinking water for our service areas. We completed our fleet study to identify ways to optimize, replace, and downsize our vehicles. We continue to clear fire breaks around key facilities to help minimize risk of wildfire. And we continue to install additional backup generators to enable us to operate during power interruptions, which, as you may recall, last year we had a few of those in the state of California that were fairly big as the grid in the state got a little taxed. We had all of our backup systems running. None of our customers went without water. And we developed and we refined our plans to operate our water systems as they are impacted by climate change, including heavy rains, which we just experienced, floods, droughts, fires, et cetera. In addition, on the personnel side, we provided unconscious bias training for over 95% of our employees, and we increased our discretionary spending with diverse suppliers to exceed 24% during 2022. Our new ESG report is scheduled to be published on May 16th, which, as you know, the ESG reports contain a lot of information. But this year, during 2022, what's included in the new report is information on our recently completed greenhouse gas inventory and our efforts to mitigate climate change. So I would encourage you to look at that report when it comes out on May 16th and all the work we're doing in terms of climate change mitigation. Moving on to page 13. on PFOS and PFOA. MCLs that were issued by the EPA, they were issued in March, and that was a draft set of standards that set the maximum contaminant levels for both compounds at four parts per trillion. Based on the current information, if it's adopted, we estimate it'd be about a $200 million capital cost to get our wells that have PFOA or PFOS trace elements into compliance. If the draft regulation is adopted as it is currently written, we would have to be in compliance by 2026, which is relatively quick. But this is something we've been working on for the last couple of years in our service areas, and I think we have a pretty good handle on it. Obviously, there's a big cost associated with it, but we have also seen over the last couple of years that there's a lot of government grant money that's out there that may be available to offset some of those costs for our customers, and certainly we would be looking to get as much of that as we can to offset our costs. Additionally, I just want to note that our regulars have a strong track record of allowing these costs and rates once the MCL has been set, and we look forward to working with them on the final resolution of PFOA and PFOS, what the standards are going to be, and then getting the treatment in place for our customers. Going to page 14, since we last met last month in March, just one kind of update on the business development side is that the Bethel Green Acres acquisition closed in 2023. That was in Washington. It was an adjacent service area that we were providing some maintenance services for that we acquired and now integrated into our service area. Can I hand it back to Tom to talk about capital investment and depreciation? Tom?

Great. Thanks, Marty. So on slide 15, just a quick update there. Two updates to the slide. First of all, the yellow bars still indicate the projected and estimated with the California rate case going on, $82 million year-to-date. And you'll note that this does not include any capital expenditure.

plus three minutes there's no changes on slide 16 that still represents the projection of the california general rate case but we'll keep showing you that and hope to give you an update when we get some more certainty on the rate case i'll turn it back to martin for a summary all right thanks tom well uh i i don't know what to say other than it's been an interesting journey going from a severe drought in 2022 to living through one of the wettest winters on record and record snowfalls on record in the state of California. The winter results, coupled with the temporary absence of certain regulatory mechanisms pending our 2021 general rate case, which is, as you know, is delayed, it has certainly made for an interesting and confusing quarter. We anticipate that the potential of future recognition of these mechanisms once our general rate case is finalized and a decision has been issued. And in the meantime, we'll continue to do our best to provide clarity and as much disclosure as possible so you can see how all these pieces fit together. I also want to point out that as long as the GRC is delayed, we anticipate that the quarterly results will remain volatile pending resolution of these regulatory mechanisms that we've discussed here today. And again, the team and I will do as much as we can to provide as much clarity as possible while we work with the California Public Toys Commission to successfully conclude our 2021 general rate case, and then quickly move on to our 2024 general rate case, which is a little over a year away. Additionally, as I mentioned, the ESG report will be available on May 16th. I highly recommend people take a look at that and all the work the company's done, especially on the greenhouse gas side, which was a focus for us in 2022. Certainly, as we wait to get these regulatory decisions out of the way, the work does not stop. As Tom mentioned, we had almost a 20% increase in capital investment during the quarter, which is pretty remarkable given the wet weather that we had on the West Coast. Additionally, as the snow levels are very, very high, and as some of you read maybe the periodicals in the state, they're talking about the quote-unquote big melt, which obviously with those record snow levels in the Sierras, which I shared earlier, coupled with the fact we rapidly moved into a warm spring, so for example, it was 82 yesterday in San Jose, there is a big concern of flooding in the central and southern part of the state as the snow starts to melt and the reservoirs are full. It just has to melt and it overflows and floods certain parts of the central plains in California. So our teams have been busy working on now our flooding contingency plans for the service areas that we support. And then once we get through this next few months on the flooding, and this risk will probably last six weeks, we'll rapidly move into fire season. And as many of you know, we do a lot of work on fire mitigation plans to make sure we're ready to go into the warm summer months to be ready for what might come our way. So a bit of a confusing quarter. Again, we're at the mercy of the California Public Utilities Commission. We're encouraging them to work as quickly as possible to resolve our general rate case and our cost of capital. And until then, we'll continue to provide the disclosure. And we appreciate everyone kind of hanging strong with us as we kind of work through these issues, because it does get a little bit confusing.

So April, with that, we are going to open it up for questions, please.

Thank you, speakers. At this time, I would like to remind everyone that in order to ask a question, please press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Again, if you would like to ask a question, please press star then the number one on your telephone keypad. Our first question comes from the line of Jonathan Reeder from Wells Fargo. Jonathan, please go ahead.

Hey, good morning, Marty and Tom.

How are you guys doing? Hi, Jonathan. Hey, just a little bit of clarity on one thing. So I know in the release you said, you know, cumulatively it's $24 to $34 million is kind of your estimated adverse revenue impact in Q1 from the delayed GRC. Does that include... I guess the deferred revenue component that you talked about, the $18.8 million that was offset by, I think it was like $15.4 million of deferred costs?

No, that's unrelated. So what we're talking about there, Jonathan, are the DREMA account of 6.5 to 7, the MRAM account of 9.5 to 11, and then the interim rate account, which is 8 to 15. So just those three accounts is what we're summarizing there.

Okay. That's what I thought.

I just wanted to make sure. I know this went a little... Sorry, Jonathan.

And with respect to the deferred revenue, obviously, as time goes by, that becomes undeferred because those surcharges are in place. And so we would expect that that would start to accumulate back to the company in future quarters. Obviously, it's not a permanent disallowance or anything like that.

Right. Right. Okay. I know... You might not have a whole lot you can say on this matter, but any sense of what a reasonable timeframe might be for getting a proposed decision in the general rate case? I think the ALJ at least got the PD out in Golden State's water, and that's the same ALJ that you have for this case. Do you think it's something we're going to get, you know, by year end or certainly by year end earnings where, you know, we can get the true up recorded in 2023?

Jonathan, I think we're certainly hopeful of that. If you look back to our last case, we had the same judge in our 2018 general rate case, and we did have about a year delay there. But as far as the time that he took was about a year that from the time that we filed in October to a proposed decision that came out in October and so you know with the clearance of the of the case for Golden State I certainly hope that that timeline is reasonable but you never can tell and obviously just a reminder that the Golden State case was really three issues and unrelated to revenue requirement whereas our case And so there's a little bit more for him to decide in our case. And so that's the guidance that I can give you is we're hopeful, but we're not sure. Let's put it that way.

Okay. Did you say it took about one year from the point you filed the settlement in the last case to get a PD? That's correct. Okay. Gotcha. Okay. And then... the black hole that is the cost of capital, um, any sense, you know, what's going on there? Like, are we going to get, uh, are we going to get a decision or, you know, is the commission just going to let it ride until the next filing?

Yeah, we're going to hopefully get a decision before we have to file again for cost of capital. But, um, you know, I, I think that, uh, They gave themselves essentially the full extension that they could out to August. And I think we're hopeful that we get a PD well before then and a decision by August. But it all comes down, as you know, to what it says. And we have several issues in there, not just the normal issue of cost of equity, but the question of retroactivity and the capital structure issue is an issue for CalWater. So it's both the timing and what comes out that will matter to us.

Sure. I mean, has there been signs that it's actively being worked on? Are there any discussions that you've been aware of and stuff like that? Or is everyone just sitting around and waiting for the proposed decision?

The only thing that I'll say, and we haven't heard anything There's nothing to discuss there, but I will say that 30 days before every commission meeting, which is when they typically publish all of their documents for the meeting, our blood pressure goes up just a little bit. And I know Greg Milliman, who you've talked to on these calls before, and I usually share a text message at the end of that day saying, no PD. And so I think we're as in the dark as anyone. But you can always look to those meetings, those meeting dates, and calculate back 30 days and say when could news possibly come out of the commission. And certainly they do issue off-cycle proposed decisions, but generally they're aggregating all of those on the last possible day that they can get on the agenda.

Okay. And then last question, I guess, or just point of clarity. So regarding... the whole, uh, drought emergency, you know, regulations that, um, the state water resource control board, you know, has issued. I think you said they expire at the end of June, or at least is it that the board just has to come out with a decision whether to extend or, or let them expire? How exactly does that work?

So the regulation expires on June 10th. So they, they issued the, um, 10th the year before, so it's for 12 months. So it expires on June 10th unless they do something else. They could always come back here in May and order it to be expired earlier. They could extend it. I think the issues are, as you know and as we've talked about in past quarters, that there are still certain areas of the state that are impacted by water shortage, particularly Southern California with respect to the Colorado River situation. So I understand we don't address it directly California and so I think there's a little bit of hesitation regionally I'm just sort of wiping our hands of the drought because there's still potential major impact in Los Angeles and Imperial County etc and so we'll just wait and see on that I think that we're awash in water in Northern California for sure and so when we look at our wholesalers and those are the ones that really drive whether whether we have voluntary or mandatory conservation we see them making their orders contingent on the state board's order. So, for instance, the San Francisco Public Utilities Commission, which is a major wholesaler for us in the San Francisco Bay Area, has made their waiving of drought restrictions contingent on what happens with the state water board. And so they're awaiting that as well.

Okay. And that's what I kind of wanted to get at, was just like, I mean, obviously... water has been plentiful uh as of recent but yeah from a long-term perspective i mean you know is it your view that the you know the groundwater um you know has been like fully recharged i know that always takes longer than just you know just just the rain and everything so like right i mean depending on the long-term view do you still want to keep kind of these restrictions in place to set the state up, you know, to be in the best position longer term.

Yeah, John, that's Marty. Like, I think that some hydrologists have estimated you need 10 winters like we had back to back to really recharge the basins that have been over pumped. So, and even with all this excess water that we've had, it still takes a long time to recharge those basins. So, you know, I think My impression is because the governor eased the drought restrictions, he didn't step it all the way back and cancel it. And the State Water Resources Control Board has been kind of silent. And we kind of follow the State Water Resources Control Board because they are in charge of managing the water. in the state, I think they're evaluating that. And my sense is we'll roll back to probably a stage one or maybe stage two drought, which is kind of voluntary conservation. But your point about long-term, this is a long-term situation. And if you look at the point I was trying to make on going from an extreme drought in the fourth quarter of 2022 to one of the wettest winters on record, I mean, that's what people say climate changes, right? It's these extremes and the intensity of the rain and the rain that we had early on in January and February filled up the reservoirs in Northern California And then they had to start releasing water because these other storms were coming in because we didn't have enough storage or our capacity. So we're a long way from where we need to be as a state in terms of adequacy of supply, sustainability, the ability to move water, you know, transmission wise and store water. So I think, you know, there's a reason why those two declarations are still there. They haven't been fully canceled out yet. And we'll just have to see how the politics of it play out here. over the next six weeks with the State Water Resources Control Board, but I'm hoping to keep them in place.

Okay, so you said maybe roll it back to stage one or stage two. What stage are you currently at, remind me?

We're in stage two now, so the talk would be to remove it, move it back to stage one. Right. And that would include restrictions on the use of water for washing your car. Right. Wasting water. Wasting water restrictions, that sort of thing. I think Governor Newsom particularly called out that he'd still like to see non-functional turf not be irrigated. That's in line with a potential long-term regulation in California to try to avoid ornamental plantings of lawn everywhere. You want your lawn to be used by soccer players and Frisbee dogs or whatever, but not to put it everywhere all around. That's a long-term effort that they've had.

Okay. And in stage one, like, would you still have the availability of the DREMA?

I don't think so at that point because it's really not a voluntary restriction that we're calling our customers on. It's really stage two that's the one that would be qualifying for the DREMA.

Okay. All right. Thanks for answering my questions. I appreciate it. And, yeah, good luck. Good luck with the weather and with the regulatory front.

Thanks, John. Thanks, John.

Our next question comes from the line of Greg Orrell from UBS. Please go ahead.

Yeah, thanks for taking my question. Morning, Greg. Hey, so... I know you kind of touched on this, but can you kind of recast how you thought about the quarter with adding back those items, the DREMA and the Monterey account, and if the rate case would have come in on time? How would you have come out, really?

Yeah, I think that's a really good question. I would anticipate that we would have had a profitable quarter with those three there and obviously the rate case is the biggest variable because we have a wide gap between what Cal Waters presentation of the of the facts of the case are and what the rate fair advocates proposal was and so you know our estimate would be somewhere between breaking even and maybe maybe a single single two I'd say nine or ten cent profit for the quarter just get to a number. But, you know, it's all things that we'll be booking in the future once we get a rate case. So it's really timing, unfortunately, at this point.

Yeah, I would just add to that, to what Tom said, Greg, that we always tell the street, don't get too excited about Q1, because from a demand perspective, it's always the softest quarter. And then having such a hard winter this year clearly had an effect on consumption and overall customer demand. So Q1 is just historically a soft quarter. Q1 tends to be an ugly quarter when you have a delayed general rate case because you can't book stuff. And I think, you know, again, Tom and the team would try to put the variables in there so you can see what they look like. But it's really hard for us to speculate too much farther than that until we get the decision and clarification from the commission.

Okay, thanks. That's great.

Next question comes from the line of Davis Sunderland from Barrick. Please go ahead.

Hey, good morning, guys. Thanks for taking my question. Morning.

I just wanted to ask, I think last time on the call you guys had mentioned in the BD pipeline there was some strength you were seeing or some potential opportunities in wastewater with Texas and a few other opportunities, but that it was contingent on just kind of where things were going to go this year with inflation and the macro environment and Just wanted to ask what the current status is there and what you're thinking with the development pipeline.

Sure. So, in Texas, you know, we have partnered with a company called BVRT, and they have continued to grow. And, you know, you've had pretty explosive growth in Texas where we have seen a number of companies and, frankly, a number of of friends and family that live around us in Silicon Valley. You know, they've kind of followed the companies as they've migrated to Texas because it's a pretty positive business environment to operate in. So, BBRT continues to do very, very well for us. And, you know, these are long, it's early, kind of early seed capital for us is the way to think about it. These are developments that are currently kind of getting underway and being planned. and where we go in and become their wastewater supplier. In addition, as we announced last year, we did the Guadalupe Basin River Authority Project, which is allowing us to partner with a water wholesaler to build a pipeline into that South Austin area, which we think will be rapidly developed as well. So generally still very good. I mean, clearly the overall market has slowed down a little bit as inflation has kind of creeped up, But so far, the business environment in Texas has kind of maintained. It has slowed down a little bit. Certainly, it's still maintained kind of forward momentum as you see a lot of people and businesses move to that state and relocate to that state.

Thank you. That's helpful. And I guess just a quick follow-up to that. Have any of the delays in general rate case or any impacts from other parts of the business slowed down the pipeline?

Too early to tell. I mean, you know, the hardest thing about VD is kind of seller's expectations and what we're willing to pay. And we tend to be kind of a value slanted acquirer. So certainly, you know, inflation starts changing those calculations. And when you run, you know, net present value calculations or future value calculations, you know, change in interest rate can potentially have an effect. I think the thing that's going to be more interesting to watch, frankly, is as the stricter regulations come out about PFOA and PFOS and water quality changes, and these small systems don't have the adequate operating capital to make the investments to meet those standards, what do they do? And that may be a large catalyst to get some of these smaller systems to break off and ultimately get acquired. So, I think I would say that it's slowed down a little bit, but certainly we're still seeing things come through the pipeline, and we've got a number of deals that we're closing and integrating, and as those come to fruition, we'll continue to disclose those on page 14. We've been putting in the deck every quarter just to share where we are with everything. We'll continue to update those as we move forward throughout 2023.

Davis, let me add one more thing about the nexus between business development and in the queue that we're preparing to file or I think have just filed a Washington Water Company general rate case. That is tied into the acquisition that we made a couple of years ago of the Rainier View Water Company. And so, you know, a lot of when you initially buy these systems, they need help in terms of second leg of that is being is being able to go into the rate making process and we've been treated very fairly by those Commission's as far as the the rate increases go most of those are outside of California and so we don't see the regulatory lag that we have but I know we have a number of new systems to us in Hawaii that we've acquired over the last three

process, we've seen fairly favorable results from those commissions.

That's very helpful. Thanks, guys. I'll pass it on. Thank you.

There are no further questions at this time.

I turn to call back over to our presenters.

Okay, April, thank you. Everyone, thank you for taking time to be here today. As I mentioned, there are a lot of moving parts here. If you have any questions, please feel free to reach out to us, and then Tom and I will be available to answer any questions anyone has. So until then, be safe, and we'll look forward to seeing everyone at the end of July on our second quarter conference call.

Thank you very much.

For today's conference call, you may now disconnect.