Agnieszka Storozynski: Okay. And then the DREMA line right you’re mentioning that that’s going to get – be decided in 2024, right? So I guess it all depends when in 2024. But is it fair to assume that we should just move that decision or that earnings stream from 2023 earnings to 2024? What if the decision is for instance made in I don’t know January or February? Would that still be allocated to 2023?
Greg Milleman: I think Dave you would need to answer that one.
David Healey: Yes. So the way that the advice letter filing process works is we’re going to get — if we get a proposed decision that’s going to be finalized at the end of the year and then we would prepare the advice letter filing in the first quarter of 2024 and it’s a Tier 3 filing which would take several months to get approval. So it’s going to be towards the end — the second half of 2024. So there’s — it will not be reported in 2023.
Agnieszka Storozynski: Okay. And then — sorry I’m jumping like that. But the filing with the — the permission to issue a mixture of equity and bonds is it fair to assume that basically equity component is equivalent to the allowed equity ratio? I mean, so basically roughly 53% of that would be equity.
David Healey: Yes that’s a good assumption.
Agnieszka Storozynski: Okay. And then lastly what’s — I should be able to infer it from the earnings lock. But what’s the drag year-to-date drag associated or if at all associated with the performance of your nonqualified pension funds? Maybe not the year-over-year maybe what’s the absolute number?
David Healey: I think we have the details in slide 15. Are you referring to the — you see that where we have the unrealized loss in 2022 versus the unrealized gain in 2023.
Agnieszka Storozynski: Okay. I see it. Okay. So those are not year-over-year numbers. Those are actually actual numbers. Okay. Very good. Good. And then maybe one more. So again, I know that, we’re still waiting for the GRC decision but you now have presumably the visibility into the high ROE. We — you guys raised the dividend this year relatively little right only 4%. Is there — I mean, I’m assuming that that was sort of a transitory issue. So, should we expect that the dividend increases will go back to the historical cadence, or I mean, are we in simply a different interest rate environment and that somehow will suppress the dividend growth going forward?
Marty Kropelnicki: No. Our overall strategy Angie is to have and keep our payout ratio between 50% to 60%. And we have stayed kind of well within that range. Obviously, with the growing capital program right there’s always the need to finance that program. And when you pay a dividend it takes away from your ability to help pay for that program. Nonetheless, I think we recognize that we are a total return type of stock and the company has had a long history of increasing its dividend every single year. So, I would look at two things. I think the financials right now and that’s why I use the fog of the delayed rate case. It’s very foggy. It’s hard to see because as you just pointed out we have estimates and we’re giving you kind of a goalpost of where we think the decision is going to come out but we ultimately don’t know.
But certainly, when we book everything and get everything kind of caught up from the delayed rate case, the fog starts to go away and you’ll see what the financial statements look like. And I do not expect the company to deviate from its policy of increasing the dividend every year. I think that will likely continue. The question is how much. And obviously we are in a rising interest rate environment your risk-free rate of return is now at 4% or above depending on what duration bonds you’re looking at and what type of bonds you’re looking at. I’m also acutely aware that that compound annual growth rate or the CAGR number associated with our dividend growth helps drive stock valuation. So it’s hard to say right now. But look, I would anticipate a dividend increase next year consistent with the history of the company for the last 70 years.
The question will be kind of how much and is the rate case concluded. And I don’t think we’re prepared to say more on that right now. But history will repeat itself I think with Cal Water. It’s just a question of what size increase will it be.
Agnieszka Storozynski: Okay. And I know that I promised that was the last question but now just one more. So you guys did numerous — well, numerous of a couple of acquisitions. That’s — so the question I basically have is that strategy going to continue in this higher financing environment? Is there more of refocusing on organic growth? Again, that’s a question I think we hear from investors across the utility space. Again, as you said PFAS would potentially give you this incremental organic growth. But again, like strategically speaking, is there a shift towards organic growth in a way of — from an M&A?
Marty Kropelnicki: Yes. I think I’ll kind of point our annual report that we have for this year steady at the helm, right? I mean certainly it’s been a turbulent market. I think the last 18 months to two years, your interest rates — two years ago we could borrow money at sub 0.5%. And now our borrowing rate today what 6.5% on the line. We’re a A+ stable issuer. So it means the cost of capital is going up. And I think it’s going to shake out buyers and sellers. Having said that, Angie, we’ve always been kind of value focused on our buys. And I think as deals may slow down a little bit, we’re always going to be out there looking for those systems that we can bring onto our platform, improve service and hopefully bring new capital into a system that may be underinvested.
So, I remain optimistic on the M&A side. I think it might slow down a little bit. And to the question Dave was asked earlier, we didn’t include that slide this quarter because we just had the one system closed the Stroh’s system in Washington. That was about 900 connections. It doesn’t mean our pipeline has spinned out any. It just means we haven’t had any new announcements come out in the last 90 days. And we have a very good business development team. Some of you may have seen we promoted Shilen Patel into that role as — leading that as our Chief Development Officer. And that’s his full-time job. And I think we will continue to look for strategic deals that will be accretive. And again, we have to get to the fog of the delayed rate case but we have a very strong balance sheet.
And sometimes when the market gets tough you find better opportunities. So we’re going to be out there looking and continue to look.
Operator: [Operator Instructions] We have no other questions in the queue at this time. I will now turn the call over to Marty Kropelnicki, Chairman and CEO for closing remarks.
Marty Kropelnicki: Great, Christa. Thanks everyone for calling in on the call today and thanks for staying with us as we go through this delayed rate case. Hopefully, we are getting to the end here as Greg mentioned and we get this thing kind of wrapped up, because certainly as we go into 2024 we have some big things we want to accomplish. That’s it for now. We’ll look forward to reporting our year-end results at the end of February. Until then please be safe, and we’ll look forward to talking to you really soon. Thank you.
Operator: This concludes today’s conference call. Thank you for your participation and you may now disconnect.
