American States Water Company (NYSE:AWR) Q1 2024 Earnings Call Transcript

Eva Tang: And Jonathan most of the costs right now we track in the memo account which we have already for the OEM are testing related costs. We have to test all the wells to determine how many wells are over the MCO level. So we’re tracking those incremental costs in our minor account right now.

Jonathan Reeder: Right. Okay. And then just kind of curious how the final PFAS rule might impact ASUS construction work going forward? Is that something that’s going to drive more work than what we’ve seen over the past five years?

Bob Sprowls: Yes. So right now I think we have PFAS-related issues at only one military base. Yes. So I wouldn’t think it’s a needle mover at this point.

Jonathan Reeder: Okay. That’s a misunderstand my part. For some reason I was thinking that military basis was somewhere where this was kind of common. So last question more of a clerical, the Joint Base Cape Cod contract, did that get up to the $75 million level? I was seeing the initial announcement only indicated it was $45 million.

Bob Sprowls: Your memory is very good, Jonathan. Yes. It got moved up. Yes, I’m glad to see it.

Jonathan Reeder: Okay. Now it’s just one of those not the economic price adjustment but sorry, the equitable adjustment or something like that?

Bob Sprowls: I think there was a sort of better understanding of the work that will need to be done.

Jonathan Reeder: Okay. All right. Great. Thank you so much for taking the time to answer my questions.

Eva Tang: I want to get back to you Jonathan on your first question about three-year rate increases.

Jonathan Reeder: Okay.

Eva Tang: So if you look at our explanation in the press release, the first quarter rate increases while the revenue increased by about $5.2 million mostly due to the third year rate increases. So on an annual basis I think that top number revenue number is about $24 million increase compared to 2023 but that including the higher ROE recall that we have 10.06 ROE this year compared to 9.36. So overall, the revenue increase for both third year rate increases and the higher ROE is about $24 million. But we also have higher supply costs to associated with this. So…

Jonathan Reeder: Okay. That’s helpful. Yes. I mean I can back into the difference between the ROE one and to get to that 24. Thank you. Thank you for that, Eva.

Bob Sprowls: I think Eva was referring to the 10-Q, not the press release.

Jonathan Reeder: Got you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Bob Sprowls for any closing remarks. Please go ahead sir.

Bob Sprowls: Thank you, Chuck. I just want to say to everyone thank you all for your participation today and we look forward to speaking with you next quarter. Thank you all.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.