Q – Jonathan Reeder: Hi. Good morning, team. Thanks for squeezing me in. A lot of my questions have already been asked. But just kind of curious was the Q3 2023, weather was that below normal? Or was Q3 2022, just above normal making the Q over — quarter-over-quarter comps tougher on the water side?
Dan Schuller: I guess, I would think about it on a state-by-state basis. So, we certainly had in our northern states, a little bit certainly rainier weather. And so I would attribute less water usage to that. In our southern states though, we had higher consumption in both Texas and in North Carolina indicating that weather there was a little better, if you will than normal. So, it’s geographically specific.
Q – Jonathan Reeder: Okay. But overall, I mean with the North being a lot bigger it was…
Dan Schuller: Yes
Q – Jonathan Reeder: Normal weather in Q3.
Dan Schuller: Yes. That’s why you saw that consumption-related impact, if you will, in the revenue waterfall.
Q – Jonathan Reeder: Yes. Okay. Did you guys — I mean have to do more on the kind of the O&M expense mitigation side then in Q3 to kind of offset that weather headwind or just the measures you already had in place kind of put you in spot.
Dan Schuller: Well, I think as we’ve been talking about in these calls since the beginning of the year, we are really trying to have a laser focus on our operating expenses this year and it’s always been part of our culture, but ensuring that it’s a daily focus for our operating team. So I would say, we’ve just continued more of the same in that regard.
Q – Jonathan Reeder: Okay. And then in terms of the East Whiteland proceeding. Does the fact that the case has now appealed to the Supreme Court mean, that the lower court denied I guess the request for rehearing. And then, what happens at the Supreme Court doesn’t hear the case or uphold the lower courts order?
Chris Franklin: Yes. So, yes. Yes, to your first answer — the first question. So that’s why it’s going to Supreme Court and we’ve asked for an audience there. The Supreme Court were to not take it or rule against us, I think same effect the lower court ruling would stand.
Q – Jonathan Reeder: And then the DLS to get on round somehow but like who owns it if East Whiteland doesn’t want to own it.
Chris Franklin: Yes. So here’s — I think pragmatically, how to think about it we would probably need to just refile and we have to articulate the affirmative benefits if you will, what the office of the consumer advocate is really picking apart in the case is the fact that, in their mind the commission didn’t articulate those affirmative benefits in the case. They really referred to the fact that we’re a large capable utility, that we could handle this and that was the benefit. So the OCA just felt that they didn’t go far enough in articulating or didn’t articulate to the satisfaction of the OCA, the benefit. We — I believe we did in our filing articulate those well. Now, so it would probably be a refiling and whether there’d be a negotiation or some kind of a settlement discussion with the OCA.
I don’t want to put words in the OCA’s mouth, but when a township doesn’t want the utility back, we found plenty of opportunity to make improvements. We’ve obviously — if it had to go back it would have to be refinanced at higher rates bad for the township. An unwind is not a favorable thing for anybody. So I do think, there is opportunity for settlement. But I think some of that Jonathan could be tied up also in hopefully what’s a further discussion with the commission on how do we make fair market value a process that is feels fair to everybody, including the office of the consumer advocate, including to various customers who have strong feelings about this as well. So I see it as a sort of an intertwined effort here. Does that makes sense?
Jonathan Reeder: Yes. No, it does. But how long does it take for the Supreme Court to kind of let you know if you’re taking up the case and then ruling like would it be easier just to almost go down that re-filing or re-approval path instead? Or would that be more — ?
Chris Franklin: Well, it might be. But I think just letting the court decisions stand as it currently sits is not ideal for the industry. And so not to say we couldn’t figure — listen what it does it says, we got to be more sharply focused on impacts to customers, more sharply focused on facility and more sharply focused on the various issues that we articulate as affirmative public benefit of the transaction. And so that’s really what the net effect is. And so I would leave you with this Jonathan. We’re not going to just sit and let the court play out. We are going to actively work with the commission the OCA and other parties to see, if we can really come to some terms here that makes sense going forward because it has general effects on the industry and ability to do these transactions in an efficient way.
Jonathan Reeder: Yeah. That make sense. Okay. I appreciate your taking the time and looking forward to catching up next week.
Chris Franklin: Yeah, yes. Looking forward to it.
Operator: Thank you. And Ryan Corners from Northcoast Research. Please go ahead.
Chris Franklin: Hey, Ryan.
Ryan Connors: Thanks for fitting me in. Hey, guys. So yes just — most of my stuff has been answered as well but I did want to get your take on — I guess, there was a new DSIC ROE set in Pennsylvania with water set below gas and electric. And I guess there was a four to one vote in the scenting Commissioner, did have some pretty strong words about that being a negative for water utilities in terms of competing with other states capital and that sort of thing. Any take on that decision and both the tactical impact on earnings and the bigger picture thoughts there?
Chris Franklin: Yeah a couple of thoughts. Maybe Dan, may have some others as well. But number one, let’s remember that at least right now we’re still under our last rate case ROE. So it really that ROE does not impact Aqua at this point. So it will in the future, but it doesn’t at this point. Secondly, the — as you know the decision that was recently made on the DSIC is they let it flat. They did not increase it. And I think Commissioner Younora you thought it should be increased like electric, which is we share that thought as well. But the commission is looking at, there are various measures and they’ll make those decisions. I think we’re — we still feel good about the overall ROE that we could get in the case. But these are decisions that the commission weighs and looks at the numbers after each decision — or before each decision. So Dan, I don’t know if you have anything to add to that?
