Jonathan Reeder: Hey, so you kind of touched on one of my questions there, in response to Gregg, but at this point, with the filing of the written comments and the other parties jumping in the mix and everything, like, have all the pushes by the parties been made in terms of these filings and ex parte meetings such that the case is just like truly in the commission’s hands at this point.
Marty Kropelnicki: The Ex Parte Communications have all been filed. I think there are some more comment letters coming in from some of the firefighters association and firefighters chiefs — fire chiefs. But again, those are all things that, that we’re not involved in the drafting of their letters or their comments. Those are things that are all done by third-parties. So my sense is there’s still some more coming in. But yes, ultimately when those are done, it’s really up to the commission. And the commission did have an open meeting Greg, remember the date on that?
Greg Milleman: February 15.
Marty Kropelnicki: February 15. And they had how many people speak?
Greg Milleman: 20.
Marty Kropelnicki: 20 people speak, raising concerns about the APD versus the PD. And they were all saying they believe the PD is best and let’s continue on adapting to climate change, wildfire harming and building resiliency and sustainability in the State of California. So I think we’re close, Jonathan. I think the commission ultimately has to take all that data in and then decide what they’re going to do.
Jonathan Reeder: Okay. You kind of indicated that 2024 plan CapEx, it was $365 million, but it depends on the outcome of the GRC. I’m assuming that number reflects an outcome more consistent with the PD and your request. Can you discuss how I guess the capital budget might change if the APD were to be adopted?
Marty Kropelnicki: Yes and no. I mean, in concept you’re absolutely right. The decision could affect, because it’s late, could affect the capital program for 2024. But if you’re read — if you are lucky enough to read the 600 pages of either decision, you’ll see in the APD, they say you can still do the capital and you have to do it via advice letter. And part of our pushback is a lot of that capital was previously approved in the last rate case. So that’s why I think you saw the other utilities become very interested in what’s going on here, because again, it’s a forecasted capital state and they’re changing the rules after the fact. So I don’t know how they’re going to rule on that. Obviously, when Greg and I met with the commission that was one of our big pushback points is that you’re changing the rules that have been a long set standard in the regulatory process in the State of California.
So it just depends which way they go. Now, having said that, obviously they’re saying, hey, you can still do your capital, you can do advice letters and look, it’s incumbent upon the company on an annual basis and on a continual basis to do a risk assessment where that capital is most efficient and most needed. So — and to the extent we do put capital to work outside of a rate case, we can either file an advice letter or if it’s picked up in the next rate case filing. So there’s nothing in the process that prohibits the company from doing what they think they need to do to run a good water utility and to continue on our path to hit our goals and objectives. What it does mean, it’s just how is that going to be covered? Is it going to be pre-approved capital, that you get in the ground and you have an earnings test, which is the way it historically works, or do you got to do it via advice letter means you got to do the investment, get the plant service, and then start depreciating and apply for an advice letter, or do you pick it up in the next general rate case?
Greg, anything that you’d add on that?
Greg Milleman: Yes. Well, yes, I would just add that there were a handful of projects that they didn’t think were appropriate, but the rest of the projects were — that we disallowed were more along the lines of build it and then seek recovery, which, as you mentioned, Marty, goes away from the forward-looking rate making state philosophy. But my point being is that they didn’t say these were bad projects. They recognized the need for them. But just how do you get the rate recovery?
Jonathan Reeder: Yes, so I mean, I guess with that in mind, it sounds like, right, the higher levels of CapEx you’ve been deploying, we should kind of anticipate that moves forward or if not, kind of increases given PFAS and just kind of, I guess, rising expenditure needs, where if we’re looking even beyond 2024, I mean should we be keeping in the levels more consistent with either the kind of the 265 or the 283 — sorry, the 365 and the 383 from this year?
