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    Davis Sunderland • Baird

    Davis Sunderland's questions to Essential Utilities Inc (WTRG) leadership

    Davis Sunderland's questions to Essential Utilities Inc (WTRG) leadership • Q2 2025

    Question

    Davis Sunderland from Baird questioned the opportunity from hyperscalers in Pennsylvania, asking about the timeline and financial structure (regulated vs. unregulated). He also asked how a potential EPA delay on the PFAS rule might affect the company's strategy and the municipal acquisition pipeline.

    Answer

    Chairman & CEO Christopher Franklin indicated that hyperscaler opportunities involve a quick turnaround and could include both regulated rate base and unregulated projects, but could not provide specifics due to NDAs. On PFAS, President of Aqua Colleen Arnold stated there is no change to their own remediation program. She believes municipalities will still face compliance deadlines, creating acquisition opportunities, and Franklin added that Essential's proprietary PFASGuard solution could even accelerate conversations with potential sellers.

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    Davis Sunderland's questions to Essential Utilities Inc (WTRG) leadership • Q3 2024

    Question

    Davis Sunderland asked about how the Pennsylvania Public Utility Commission (PUC) is handling the separated estimated costs for PFAS remediation and what the expected mechanism for cost recovery would be.

    Answer

    CEO Christopher Franklin and CFO Daniel Schuller addressed the question. Franklin affirmed they are assured of recovery for PFAS investments, with the main uncertainty being how proceeds from lawsuits against polluters will be applied (e.g., as an offset to rate base or O&M). Schuller added that the company's typical approach is to seek deferred accounting treatment, placing the investments on the balance sheet as a regulatory asset for future recovery through rates.

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    Davis Sunderland's questions to Essential Utilities Inc (WTRG) leadership • Q2 2024

    Question

    Davis Sunderland of Baird asked if the PUC's C-motion had spurred an increase in M&A activity and inquired about current trends in seller valuation expectations for water systems, particularly in light of rising PFAS compliance costs.

    Answer

    Chairman and CEO Christopher Franklin responded that while it is too soon to see a direct impact on the M&A pipeline from the C-motion, it has prompted more discussions with municipalities. He also noted that conversations about the significant costs of PFAS mitigation are increasing, which he expects will lead more systems to explore a sale.

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    Davis Sunderland's questions to California Water Service Group (CWT) leadership

    Davis Sunderland's questions to California Water Service Group (CWT) leadership • Q2 2025

    Question

    Davis Sunderland of Baird inquired about the expected timeline for the California General Rate Case (GRC) decision and the financial implications of the EPA's potential delay of PFAS regulations, including the impact on capital spending and M&A strategy.

    Answer

    Chairman, President, & CEO Martin Kropelnicki expressed guarded optimism for an on-time GRC decision by year-end, noting the assigned commissioner has made it a top priority. SVP, CFO & Treasurer James Lynch stated that PFAS capital investments will largely proceed on the original schedule despite the EPA's timeline shift, as some well replacements were already planned. Kropelnicki added that customer safety is paramount. Lynch also clarified that M&A initiatives are independent of PFAS spending due to the company's strong balance sheet.

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    Davis Sunderland's questions to California Water Service Group (CWT) leadership • Q1 2025

    Question

    Davis Sunderland from Baird asked for a comparison of the current GRC's progress against the delayed 2021 GRC, seeking to understand if similar warning signs are present. He also questioned how potential tariffs and supply chain issues are being factored into the company's outlook and cost management strategy.

    Answer

    Chairman and CEO Martin Kropelnicki contrasted the current GRC with the 2021 case, highlighting that communication is much better and all parties are publicly committed to an on-time decision, unlike the prior cycle which was immediately contentious and complicated by COVID. Regarding tariffs, he stated it's too early to predict specific impacts but expressed confidence in the team's proven ability to manage supply constraints and inflation. Executive James Lynch added that the company is monitoring financial market volatility for future financings but currently has a strong liquidity position.

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    Davis Sunderland's questions to California Water Service Group (CWT) leadership • Q4 2024

    Question

    Davis Sunderland from Robert W. Baird & Co. asked about California Water Service Group's M&A strategy for 2025 and inquired why capital expenditures for PFAS remediation are excluded from the primary investment plan and what the spending cadence might be.

    Answer

    CEO Martin Kropelnicki and executive James Lynch stated that the company's primary focus is its strong organic rate base growth of nearly 12% CAGR. They explained that while they have the capacity for M&A, any deals will be highly strategic and targeted, noting the Texas greenfield development already provides M&A-like growth. Regarding PFAS, Kropelnicki and VP Greg Milleman clarified that these costs are excluded from the main CapEx plan due to uncertainty in timing and scope at the time of the GRC filing, for which the CPUC has granted a memo account.

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    Davis Sunderland's questions to Bloom Energy Corp (BE) leadership

    Davis Sunderland's questions to Bloom Energy Corp (BE) leadership • Q3 2024

    Question

    Davis Sunderland from Baird asked for an update on the traction of the new sales process targeting C-suite executives for large deals and whether sales cycles might accelerate.

    Answer

    CEO K.R. Sridhar acknowledged that the first deals in a new market are the hardest and longest to close. He clarified that current delays are not about technology qualification but about the commercial complexity of coordinating multiple parties on large, first-of-their-kind deals, stating "it does take a minute."

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