Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the Cost of Service Adjustment (CSA) or formula rates and how it impacts regulatory lag? A: Christopher Krygier, Chief Operating Officer, explained that the CSA is based on a policy statement passed by the commission, modeled after FERC's successful approach. It allows for annual updates to the income statement and balance sheet, reflecting changes in expenses and new investments. This proposal increases transparency and enables more contemporaneous rate adjustments, benefiting both customers and the company. The CSA is proposed as a five-year program, after which a full rate case would be required.
Q: What does a notice to proceed from Procter & Gamble mean for your investments and potential revenue visibility? A: Ron Fleming, CEO, stated that a notice to proceed indicates Procter & Gamble's release of their full construction plans, allowing Global Water to design and permit the necessary utility infrastructure. This initiates a two- to three-year process to design, permit, and construct the utilities, marking the first step after contract execution.
Q: How does the recent acquisition of Tucson assets fit into your growth strategy? A: Christopher Krygier, COO, noted that the acquisition, approved by the Arizona Corporation Commission, is part of building economies of scale in the region. It will increase customer connections from 5,000 to 7,000, representing significant growth since starting with zero customers in 2020.
Q: Can you elaborate on the recent rate case settlement and its implications? A: Christopher Krygier, COO, mentioned that a unanimous settlement was reached for the Global Water Farmers' rate case, authorizing a $1.1 million revenue increase phased in over 2025 and 2026. This settlement reflects the company's successful track record of improving utilities and seeking appropriate rate relief.
Q: What are the main drivers behind the proposed rate increase for Santa Cruz and Palo Verde utilities? A: Christopher Krygier, COO, explained that the proposed $6.5 million rate increase is driven by inflation, capital investments to support organic growth in Maricopa, and rate base recognition of plant investments. The rate case includes a proposal for a Cost of Service Adjustment to address regulatory lag.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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