SJW Group

Ladies and gentlemen, thank you for standing by, and welcome to the SJW Group Third Quarter 2023 Financial Results 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 would need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Andrew Walters, Chief Financial Officer and Treasurer. Please go ahead.

Thank you, Operator. Welcome to the third quarter 2023 Financial Results Conference Call for SJW Group. I will be presenting today with Eric Thornburg, Chair 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 sjwgroup.com. Before we begin today, 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 results, 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 and 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. An 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. And as a reminder, this webcast is being recorded, and an archive of the webcast will be available until January 22nd, 2024. You can access the press release and the webcast at our corporate website. I will now turn the call over to Eric Thornburg. Eric.

Welcome, everyone, and thank you for joining us. I'm Eric Thornburg, and it is my honor to serve as chair, president, and CEO of SJW Group. As we progress through the second half of 2023, I'm pleased to report that the strong momentum of the first half of the year continues. We remain focused on advancing our strategy, and in this quarter we were able to achieve important milestones towards this goal. These include securing constructive regulatory outcomes across our local operations, such as an increase in the water infrastructure and conservation adjustment in Connecticut and the approval of the reimplementation of the water conservation memorandum account in California, achieving 12% customer growth year over year in Texas. Since 2007, Texas Water has more than quadrupled its number of customers, serving more than 28,000 connections today. Investing $196 million in water and wastewater utility infrastructure year-to-date through the end of the third quarter, or 77% of our $255 million 2023 capital expenditure plan, which includes solar energy investments that lower operating costs and reduce greenhouse gas emissions, and delivering earnings per diluted share of $1.13 in the third quarter and $2.09 year-to-date. I'm pleased to share that our successful execution of our growth strategy, together with the implementation of initiatives to address anticipated challenges, as well as partial usage recovery in California and Texas, have allowed us to increase our 2023 guidance range to $2.65 to $2.70 of net income per diluted share. Before we go on, I would like to take a moment to comment on the reimplementation of the WCMA, which was approved earlier this month. The California Public Utilities Commission recognized the ongoing water supply challenges in the San Jose area when it authorized the reimplementation of the WCMA and WCEMA to include the voluntary water conservation request of our water wholesaler, Valley Water. Rainfall in 2023 has been plentiful by California standards, but challenges continue in Santa Clara County. Valley Water's largest reservoir is at less than 3% of its storage capacity and will be for 10 years as the dam is strengthened against earthquakes. Maintaining the momentum that our customers have made in water conservation during recent droughts will serve us all well in the future. As we move towards the end of 2023 and into the new year, we will continue to execute on the key elements of our growth strategy. We expect future earnings growth will be driven by our commitment to managing operating expenses continued investment in maintaining and improving our water supply and infrastructure, as well as constructive regulatory outcomes across our operations, including the California water cost of capital mechanism, system improvement charge in Texas, and general rate cases and infrastructure investment surcharges in Connecticut and Maine, all of which we will discuss during this call. For now, Andrew will review our financial results and regulatory updates in our state operations.