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    Jonathan Reeder • Wells Fargo Securities

    Jonathan Reeder's questions to American Water Works Co Inc (AWK) leadership

    Jonathan Reeder's questions to American Water Works Co Inc (AWK) leadership • Q2 2025

    Question

    Jonathan Reeder of Wells Fargo Securities inquired about the M&A landscape in Pennsylvania, particularly regarding the resumption of fair market value deals, and asked for clarification on a California decoupling bill's legislative goals and current status.

    Answer

    EVP & COO Cheryl Norton explained that recent Pennsylvania deals are long-lead-time transactions and that the company expects more M&A activity, utilizing new commission guidelines for a smoother process. President & CEO John Griffith added that M&A momentum is broad-based across their entire platform. Regarding the California bill, EVP & CFO David Bowler clarified it has passed the Appropriations Committee and now moves to the full legislature.

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    Jonathan Reeder's questions to American Water Works Co Inc (AWK) leadership • Q2 2025

    Question

    Jonathan Reeder of Wells Fargo Securities, LLC asked for more detail on the M&A landscape in Pennsylvania, questioning if the recent fair market value deals are the 'tip of the iceberg.' He also requested clarification on a California decoupling bill, including its specific goals and current legislative status.

    Answer

    EVP & COO Cheryl Norton described the Pennsylvania deals as long-lead-time projects and confirmed the company expects more acquisition opportunities. President & CEO John Griffith added that this M&A momentum is broad-based across their entire footprint. Regarding California, management clarified the bill aims to mandate full decoupling and detailed its path from the Appropriations Committee to the full legislature and then the Governor's desk.

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    Jonathan Reeder's questions to American Water Works Co Inc (AWK) leadership • Q4 2024

    Question

    Jonathan Reeder asked if a settlement in the pending Missouri rate case is expected before hearings begin and whether the company is seeing a trickle-down effect from broader economic development, such as AI and data centers, leading to higher customer growth.

    Answer

    President John Griffith confirmed that based on past experience, the company's expectation is to reach a settlement in the Missouri rate case before hearings. On economic development, he characterized the impact as a 'trickle in,' noting that data centers are more power-hungry than water-hungry, but the company is seeing some opportunities for infrastructure build-out.

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    Jonathan Reeder's questions to California Water Service Group (CWT) leadership

    Jonathan Reeder's questions to California Water Service Group (CWT) leadership • Q2 2025

    Question

    Jonathan Reeder from Wells Fargo Securities asked about the drivers behind a shift in the capital expenditure forecast and whether the new Silverwood project investment is included. He also requested an update on the status and prospects of the water decoupling bill (SB 473) in the California legislature.

    Answer

    SVP, CFO & Treasurer James Lynch clarified that the CapEx forecast shift was due to general timing adjustments and that the Silverwood project spending is incremental to the current budget. Chairman, President, & CEO Martin Kropelnicki added that the board had just approved the Silverwood expenditures. Kropelnicki then provided a detailed update on SB 473, noting it has strong bipartisan support and has passed the Senate, with the only opposition citing a minor increase in commission operating costs. He expects it to be taken up again in the fall.

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    Jonathan Reeder's questions to California Water Service Group (CWT) leadership • Q1 2025

    Question

    Jonathan Reeder of Wells Fargo asked for more detail on the drivers behind the better-than-expected Q1 results, whether a global GRC settlement is still possible, and the status of renewing the company's At-The-Market (ATM) equity program.

    Answer

    Chairman and CEO Martin Kropelnicki and executive James Lynch attributed the strong Q1 to a combination of factors, including disciplined budget management, a more accurate water mix in the current rate case, and the significant positive impact of a $27.2 million step increase in rates. Regarding the GRC, Kropelnicki conceded a global settlement is now less likely but the process remains on schedule, while Lynch noted that significant disagreements on decoupling and capital spending were major hurdles. Lynch also confirmed the company intends to renew its ATM program soon, likely in early spring, with the size still under review.

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    Jonathan Reeder's questions to California Water Service Group (CWT) leadership • Q4 2024

    Question

    Jonathan Reeder from Wells Fargo Securities inquired about the potential for a settlement in the 2024 General Rate Case (GRC), future annual equity needs to support capital expenditures, plans for expanding into the water business in Texas, and clarification on the net income impact from the delayed 2021 GRC decision.

    Answer

    Greg Milleman, VP of Rates and Regulatory Affairs, expressed optimism about reaching a settlement in the GRC, noting discussions are scheduled for April. CEO Martin Kropelnicki added that their risk-based capital plan strengthens their position. Executive James Lynch clarified that future equity issuance will be opportunistic to maintain the capital structure and that the company is currently overequitized. Kropelnicki confirmed plans to enter the Texas water market by 2026 through a public-private pipeline partnership. Lynch also affirmed that a ~$1.10 per share retroactive benefit from the GRC is the more accurate figure to use for normalization.

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    Jonathan Reeder's questions to California Water Service Group (CWT) leadership • Q3 2024

    Question

    Jonathan Reeder inquired about the implications of the CPUC's recent decision to hold a peer's rate case on decoupling, the potential for a reduction in the water utilities' 2025 ROE, the reconciliation of the company's actual versus authorized capital structure, and the potential CapEx impact from the EPA's finalized lead and copper rule.

    Answer

    Greg Milleman, VP of Rates and Regulatory Affairs, stated it was too early to determine the outcome of the peer's rate case. Chairman and CEO Martin Kropelnicki added that Cal Water's proposal is unique, focusing on conservation and affordability for low-income customers. Kropelnicki and executive James Lynch expressed confidence that the 10.27% ROE for 2025 is secure, noting the water industry's circumstances differ from energy. Lynch clarified the presented capital structure is the current actual, which is being managed toward the authorized level, citing a recent $125 million debt issuance. Kropelnicki concluded the lead and copper rule is not a major financial issue for their service areas.

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    Jonathan Reeder's questions to SJW Group (HTO) leadership

    Jonathan Reeder's questions to SJW Group (HTO) leadership • Q2 2025

    Question

    Jonathan Reeder from Wells Fargo Securities asked for clarification on the new Connecticut PFAS recovery mechanism, specifically its effective date and approval process, and inquired about the new Texas hybrid/future test year law, questioning if its use could be a point of contention or if it's mandatory for the commission to adopt.

    Answer

    President & COO Bruce Hauk and CEO & Director Andrew Walters explained that the Connecticut PFAS mechanism allows for forward recovery of capital spent, not just in-service assets, with the first filing expected in early 2026. Regarding the Texas law, Bruce Hauk clarified that while the law allows for a future or hybrid test year, a rulemaking process will establish the specific procedures, and it will be the applicant's choice which path to file under.

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    Jonathan Reeder's questions to SJW Group (HTO) leadership • Q2 2025

    Question

    Jonathan Reeder from Wells Fargo Securities asked for clarification on the new Connecticut PFAS recovery mechanism, including its effective date for CapEx recovery and the expected approval timeline. He also questioned the new Texas hybrid/future test year law, asking if its adoption by the Public Utility Commission of Texas (PUCT) could be a point of contention in future rate cases.

    Answer

    President & COO Bruce Hauk and CEO & Director Andrew Walters explained that the Connecticut PFAS mechanism allows for forward-looking recovery of capital spent (not just for in-service projects) starting in early 2026, with a review process similar to the existing WICA mechanism. Regarding the Texas law, Bruce Hauk clarified that while the law allows the utility to choose its test year type, the specific procedures will be established through a PUCT rulemaking process starting in September.

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    Jonathan Reeder's questions to Hawaiian Electric Industries Inc (HE) leadership

    Jonathan Reeder's questions to Hawaiian Electric Industries Inc (HE) leadership • Q1 2025

    Question

    Jonathan Reeder of Wells Fargo questioned if the allowed ROE and equity ratio would be re-evaluated in the rate case, why the legislature deferred the liability cap decision to the PUC, and the Governor's position on the matter.

    Answer

    Hawaiian Electric President and CEO Shelee Kimura confirmed that the allowed ROE and equity ratio will be re-evaluated in their upcoming filing. HEI President and CEO Scott W. Seu explained the legislature deferred to the PUC to allow for a more robust and technical rulemaking process, not as a punt. He added that the process provides an opportunity for the Governor to weigh in after the PUC completes its work.

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    Jonathan Reeder's questions to Hawaiian Electric Industries Inc (HE) leadership • Q3 2024

    Question

    Jonathan Reeder of Wells Fargo asked if the definitive settlement agreement contained terms that were materially different from the prior agreement in principle and sought clarification on the drivers behind the substantial increase in utility O&M expenses.

    Answer

    President and CEO Scott W. Seu confirmed that the terms of the definitive settlement agreement were consistent with the agreement in principle. Hawaiian Electric CFO Paul Ito explained that the higher O&M was driven by both onetime items, such as a $2.6 million after-tax settlement administration fee and a $2.6 million state indemnification claim, as well as ongoing costs like accelerated wildfire mitigation inspections and higher insurance premiums.

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    Jonathan Reeder's questions to American States Water Co (AWR) leadership

    Jonathan Reeder's questions to American States Water Co (AWR) leadership • Q1 2025

    Question

    Jonathan Reeder of Wells Fargo Securities inquired about American States Water's full-year equity issuance plans and sought a detailed update on the ASUS segment's military base privatization pipeline, including the impact of the political environment and the nature of nontraditional contracts.

    Answer

    Executive Eva Tang clarified that while ~$60 million in equity issuance for 2025 is a target, the final amount will be reassessed, with a total of ~$85 million planned over the next two years to complete the current cycle's funding. Executive Robert Sprowls provided a comprehensive overview of the military privatization landscape, noting no 50-year awards are expected in 2025. He detailed that the Army may release new privatizations later in the year, the Air Force is lagging, and the Navy remains the most active. Sprowls also highlighted the company's experience with newer, shorter-term 15-year contracts as a potential competitive advantage.

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    Jonathan Reeder's questions to American States Water Co (AWR) leadership • Q4 2024

    Question

    Jonathan Reeder of Wells Fargo Securities inquired about the allocation of the Q4 retroactive electric GRC earnings benefit between 2023 and 2024, whether 2024's strong operating cash flow is a sustainable proxy for 2025, and the company's 2025 issuance plans for its at-the-market (ATM) equity program.

    Answer

    Executive Robert Sprowls and CFO Eva Tang explained that the majority of the retroactive EPS benefit was attributable to 2024, a result of structuring the GRC settlement to mitigate a large first-year rate impact on customers. Eva Tang confirmed that 2024's operating cash flow of nearly $200 million is a reasonable proxy for 2025. She also stated the company plans to issue approximately $60 million in equity under its ATM program in 2025.

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    Jonathan Reeder's questions to American States Water Co (AWR) leadership • Q3 2024

    Question

    Jonathan Reeder inquired about the pro forma 2024 earnings power of the Bear Valley electric segment under its proposed GRC settlement, the timing for recognizing retroactive gains, the drivers behind the record increase in ASUS capital awards, and the reasons for the updated 2024 ASUS guidance.

    Answer

    Executive Robert Sprowls explained the combined 2023-2024 EPS impact from the Bear Valley GRC is estimated at $0.05-$0.07. He noted the record $54 million in ASUS capital awards was due to government funding and strong relationships, but it's too early to call it a new normal. He also detailed that the 2024 ASUS guidance was raised due to favorable construction conditions and strong performance from new bases. Executive Eva Tang added that the long runway for ASUS projects allows for better planning and that a final GRC decision before the 10-K filing would allow for booking the impact in 2024.

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    Jonathan Reeder's questions to NorthWestern Energy Group Inc (NWE) leadership

    Jonathan Reeder's questions to NorthWestern Energy Group Inc (NWE) leadership • Q4 2024

    Question

    Jonathan Reeder asked for details on the Montana rate case settlement process, the prospects for key utility-related legislation, and the specific drivers of the increased 5-year capital expenditure plan.

    Answer

    CFO Crystal Lail outlined the rate case timeline, with settlement negotiations occurring in March ahead of a March 24 deadline. CEO Brian Bird identified bills to reduce strict liability and ensure timely recovery for transmission investments as top legislative priorities. CFO Crystal Lail clarified the $2.7 billion CapEx plan increase is driven by foundational electric and gas system renewal and refresh projects, and does not yet include spending for the prospective data centers, which is considered incremental.

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    Jonathan Reeder's questions to Essential Utilities Inc (WTRG) leadership

    Jonathan Reeder's questions to Essential Utilities Inc (WTRG) leadership • Q3 2024

    Question

    Jonathan Reeder asked if the $73 million water rate increase would be implemented all at once, questioned why the 2025 EPS guidance wasn't higher given new rates, requested a CapEx breakdown between water and gas, and inquired about the impact of a recent drought watch in Pennsylvania.

    Answer

    CFO Daniel Schuller and CEO Christopher Franklin responded. Schuller confirmed the rate increase is effective all at once in February and detailed several O&M headwinds for 2025, including higher purchased power costs, new PFAS-related chemical expenses, and rising insurance costs. He described the $7.8B 5-year CapEx as 'close to 50-50' but slightly biased toward water. Franklin stated the drought watch is not a major concern for water supply or company revenue.

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    Jonathan Reeder's questions to Essential Utilities Inc (WTRG) leadership • Q2 2024

    Question

    Jonathan Reeder from Wells Fargo questioned the Board's decision to increase the dividend by 6%, a break from the recent 7% trend. He also sought clarification on whether the year-to-date weather headwind included lower water volumes and the reasons behind those lower volumes.

    Answer

    CFO Daniel Schuller explained the 6% dividend increase was a strategic move to moderate the dividend payout ratio and keep it below the company's 65% target. He clarified the $0.08 weather headwind was exclusive to the gas business and attributed lower Q2 water volumes partly to a meter-read cycle timing issue that is expected to reverse in Q3, as well as a difficult comparison to unusually high volumes in the prior year.

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